Question

Weiland Co. shows the following information on its 2016 income statement: sales = $158,000; costs = $80,900; other expenses = $4,200; depreciation expense = $9,900; interest expense = $7,400; taxes = $19,460; dividends = $7,700. In addition, you're told that the firm issued $3,600 in new equity during 2016 and redeemed $5,900 in outstanding long-term debt.
  
a. What is the 2016 operating cash flow? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
  
Operating cash flow            $
  
b. What is the 2016 cash flow to creditors? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
  
Cash flow to creditors            $
  
c. What is the 2016 cash flow to stockholders? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
  
Cash flow to stockholders            $
  
d. If net fixed assets increased by $20,750 during the year, what was the addition to NWC? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
  
Addition to net working capital            $

Answer 1

Operating cashflows:
Sales			158000
Cost			80900
Gross margin			77100
other expenses			4200
taxes			19460
Operating cashflows:			53440
Cashflows to creditors
Interest paid			7400
redemption of LTD			5900
Cashflows to creditors			13300
Cashflows to stockholders:
Dividend paid			7700
Issue of equity			-3600
Cashflows to stockholders:			4100
Free cash flows= Cashflows to credittors+ Cashflows to stockholder
			13300+4100= 17400
Free cashflows = Operating cashflows- Capital expenditures- Net increase in WC
17400 = 53440 - (20750+9900) - Net increase in NWC
Net Increase in NWC = 5390