Problem 1: [15 points]
ABC Inc. has released the following information on their income statement for year 2006:
Cost of Goods Sold
$0.15 per share
Furthermore, it was also reported that at the start of beginning of the year, ABC had $8,000 in net fixed
assets, current assets were $2,000, and current liabilities were $1,500. At the end of the year, net fixed
assets were $8,400, current assets were $3,100, and current liabilities were $1,800. During the year, the
firm redeemed $100 in outstanding long-term debt. The total number of shares outstanding in the year
was 2,000 shares.
Find the net income and the operating cash flows in 2006.
Find ABC’s cash flow from assets.
Find the Net New Equity Raised by ABC in 2006.
We need the income statement to to estimate Tax, NI, EBIT, and Dividends paid :
Income statement for 2006
Cost of good sold
Total Dividends paid = 0.15 x 2,000 = $300