CHAPTER_2-CASE-Solution - Chapter 10: Making Capital...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
CHAPTER 2 CASH FLOWS AT WARF COMPUTERS The operating cash flow for the company is: (NOTE: All numbers are in thousands of dollars) OCF = EBIT + Depreciation – Current taxes OCF = $1,066 + 127 – 286 OCF = $907 To calculate the cash flow from assets, we need to find the capital spending and change in net working capital. The capital spending for the year was: Capital spending Ending net fixed assets $1,824 – Beginning net fixed assets 1,433 + Depreciation 127 Net capital spending $ 518 And the change in net working capital was: Change in net working capital Ending NWC $518 – Beginning NWC 468 Change in NWC $ 50 So, the cash flow from assets was: Cash flow from assets Operating cash flow $907 – Net capital spending 518 – Change in NWC 50 Cash flow from assets $339 The cash flow to creditors was: Cash flow to creditors Interest paid $76 – Net New Borrowing 40 Cash flow to Creditors $36
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
The cash flow to stockholders was: Cash flow to stockholders Dividends paid $318 – Net new equity raised
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 12/10/2009 for the course BUS 311 taught by Professor Fas during the Spring '09 term at American University in Bulgaria.

Page1 / 3

CHAPTER_2-CASE-Solution - Chapter 10: Making Capital...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online