Finman

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1) Assets = Liability + Shareholders’ equity
Shareholders’ equity= Assets – Liabilities
= ( 5,100 + 23,800 ) – ( 4,300 + 7,400 )
= 17,200

Net working capital = Current assets – Current liabilities
= 5,100 – 4,300
= 800

2) Net sales586,000
COGS247,000
Depreciation 43,000
Earnings before interest and taxes 296,000
Interest paid 32,000
Taxable Income264,000
Taxes ( 35% ) 92,400
Net income171,600

3) Net income171,600
Dividends 73,000
Addition to retained earnings 98,600

8) Net sales 27,500
COGS 13,280
Depreciation 2,300
Earnings before interest and taxes 11,920
Interest paid 1,105
Taxable Income 10,815
Taxes ( 35% ) 3,785
Net income 7,030

Earnings before interest and taxes 11,920
+ Depreciation 2,300
* Taxes 3,785
Operating cash flow 10,435

9) Ending net fixed assets 4,200,000
* Beginning net fixed assets 3,400,000
+ Depreciation 385,000
Net capital spending 1,185,000

10) Net working capital 2010 = Current assets – Current liabilities
= 2,100 – 1,380
= 720

Net working capital 2011= Current assets – Current liabilities
= 2,250 – 1,710
= 540

Ending NWC 540
* Beginning NWC 720
Change in NWC (180)

11) Net new borrowing = 2,900,000 – 2,600,000
= 300,000

Interest paid 170,000
* Net new borrowing 300,000
Cash flow to creditors (130,000)

12) Net new equity raised = ( 815,000 + 5,500,000 ) – ( 740,000 + 5,200,000 )
= 6,315,000 – 5,940,000
= 375,000
Dividends paid 490,000
* Net new equity raised 375,000
Cash flow to stockholders 115,000

13) Cash flow from assets = Cash flow to creditors + Cash flow to stockholders
= (-130,000) + 115,000
= -15,000

Cash flow from assets = Operating cash flow – Net capital spending – Change in NWC -15,000= Operating cash flow – 940,000 – 85,000 Operating cash flow = (-15,000) + 940,000 + 85,000
= 1,010,000

14) a)Net sales196,000
COGS104,000
Depreciation 9,100
Other expenses 6,800
Earnings before interest and taxes 76,100
Interest paid 14,800
Taxable Income 61,300
Taxes 21,455
Net income 39,845

Earnings before interest and taxes 76,100
+ Depreciation 9,100
* Taxes 21,455
Operating cash flow 63,745

b)Interest paid 14,800
* Net new borrowing (7,300)
Cash flow to creditors 22,100

c)Dividends paid 10,400
* Net new equity raised 5,700
Cash flow to stockholders 4,700

d)Cash flow from assets = Cash flow to creditors + Cash flow to stockholders
= 22,100 + 4,700
= 26,800

Net capital spending = Change in net fixed asset + Depreciation
= 27,000 + 9,100
= 36,100

Cash flow from assets = Operating cash flow – Net capital spending – Change in NWC 26,800= 63,745 – 36,100 – Change in NWC Change in NWC = 63,745 – 36,100 – 26,800
= 845
* X – ( 35100 X ) = 6,600
65100 X = 6,600
X= 10,154

15) Net sales 41,000
COGS 19,500
Depreciation 6,846
Earnings before interest and taxes 14,654
Interest paid 4,500
Taxable Income 10,154 *
Taxes ( 35% ) 3,554
Net income 6,600

Net income 6,600
Dividends 1,500
Addition to retained earnings 5,100

16) Bertinelli Corporation
Balance Sheet
For the year ended 2011

ASSETS
Current Assets
Cash195,000
Accounts receivable 137,000
Inventory 264,000
Total596,000

Fixed Assets...
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