Graffiti Advertising, Inc., reported the following financial statements for the last two years. Construct the cash flow
Question:
Graffiti Advertising, Inc., reported the following financial statements for the last two years. Construct the cash flow identity for the company. Explain what each number means.?
Financial StatementsFinancial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
2019 Income Štatement $750,727 Sales 430,821 Cost of goods sold Selling and administrative Depreciation 165,676 72,489 $ 81,741 EBIT Interest 25,630 $ 56,111 EBT Taxes 14,028 $ 42,083 Net income $ 14,200 Dividends Addition to retained earnings 27,883 GRAFFITI ADVERTISING, INC. Balance Sheet as of December 31, 2018 $ 12,721 $ 17,691 Accounts payable Notes payable Cash 25,228 19,149 $ 31,870 $181,000 $305,824 Accounts receivable 18,321 Current liabilities Inventory Long-term debt Owners' equity $ 61,240 $457,454 Current assets Net fixed assets Total liabilities and $518,964 owners' equity $518,694 Total assets GRAFFITI ADVERTISING, INC. Balance Sheet as of December 31, 2019 Cash $ 19,003 Accounts payable $ 13,962 21,872 $ 35,834 Accounts receivable 28,025 Notes payable Current liabilities Inventory Current assets 30,222 $ 77,250 Long-term debt Owners' equity Total liabilities and $201,900 $379,195 Net fixed assets $539,679 Total assets $616,929 owners' equity $616,929
Step by Step Answer:
To construct the cash flow identity we will begin with cash flow from assets Cash flow from assets is Cash flow from assets OCF Change in NWC Net capi...View the full answer
Essentials of Corporate Finance
ISBN: 978-1260013955
10th edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
Related Video
Depreciation of non-current assets is the process of allocating the cost of the asset over its useful life. The cost of the asset includes the purchase price, any additional costs incurred to bring the asset to its current condition and location, and any other costs that are directly attributable to the asset. The useful life of the asset is the period over which the asset is expected to be used by the company. To calculate the depreciation, companies use different methods such as straight-line, declining-balance, sum-of-the-years\'-digits, units-of-production, and group depreciation. The chosen method will depend on the type of asset, the company\'s accounting policies, and the accounting standards that are applicable. The straight-line method allocates an equal amount of the asset\'s cost over its useful life, while the declining-balance method calculates depreciation at a fixed rate, typically double the straight-line rate, but the amount of depreciation decreases over time. The sum-of-the-years\'-digits method is similar to the declining-balance method, but the rate of depreciation is calculated using a fraction that is based on the useful life of the asset. It\'s important to note that the depreciation expense will be recorded on the company\'s income statement and the accumulated depreciation will be recorded on the company\'s balance sheet. This will decrease the value of the asset on the balance sheet over time.
Students also viewed these Business questions
-
Find Your Way Back, Inc., reported the following financial statements for the last two years. Construct the cash flow identity for the company. Explain what each number means. 2008 Income Statement...
-
Freeman, Inc., reported the following financial statements for the last two years. Construct the cash flow identity for the company. Explain what each number means. FREEMAN, INC. 2017 Income...
-
Motorsports of Miami, Inc., reported the following financial statements for 2010: Motorsports of Miami, Inc. Income Statement Year Ended December 31, 2010 (In thousands) Service...
-
Night By Elie Wiesel The Holocaust - Why did the members of Sighets Jewish community refuse to believe their horrible situation? (Moshe the Beadle and Madame Schachter portending the horrors that...
-
With regard to the analysis of chromosome structure, explain the experimental advantage that polytene chromosomes offer. Discuss why changes in chromosome structure are more easily detected in...
-
Describe why it is important to have guests assess the quality of their cruise experience. How would you respond to critics suggesting that guests do not always have the necessary expertise to...
-
Mr. Jenkins, this is typical question: Do you feel that I have treated you fairly in this interview?
-
A tabular analysis of the transactions made during August 2014 by Colaw Company during its first month of operations is shown below. Each increase and decrease in stock- holders equity is explained....
-
Why is it important to learn SQL? In which jobs you need to know SQL? 2A- What is the definition of DML and DDL? Give examples in each case. 2B- Consider the following two tables below: VENDOR and...
-
Which 3 statements are correct regarding reconciling a bank account in QuickBooks Online? To begin the reconcile process, you need to enter the statement ending date and ending balance from the...
-
Consider the following abbreviated financial statements for Cabo Wabo, Inc.:? a. What is owners? equity for 2018 and 2019?? b. What is the change in net working capital for 2019?? c. In 2019, the...
-
SDJ, Inc., has net working capital of $2,135, current liabilities of $5,320, and inventory of $2,470. What is the current ratio? What is the quick ratio?
-
Show that the F statistic in Figure 13.12 is equal to the t statistic calculated from the data, squared. Regression Analysis: Median home value versus Median household income Analysis of Variance...
-
An extract of account balances for Enid Fisher as at 30 June 2022 showed accounts receivable $22 803, rent received $3016, interest received $1042, salaries $14 624, insurance $6573, rent $7060, bad...
-
The leave provision accounts of Steven Keith at 30 June 2021 were annual leave $83 228, sick and carers leave $50 667 and long service leave $29 608. No adjustments were made to the leave provision...
-
At 30 June 2021, the leave provision general ledger balances for the employees of Joan Patricia were annual leave $7382, sick and carers leave $3395 and long service leave $2569. No adjustments were...
-
Jacob receives an allowance of $5 per week. He spends all his allowance on ice cream cones and bottles of smartwater. a. If the price of ice cream cones is $0.50 per cone and the price of bottles of...
-
From the following transactions prepare the abbreviated general journals that apply where a business uses either the periodic inventory system or the perpetual inventory system. a The business...
-
The transactions of Spade Company appear below. a. Kacy Spade, owner, invested $13,500 cash in the company in exchange for common stock. b. The company purchased office supplies for $392 cash. c. The...
-
7 A 29-year-old, previously healthy man suddenly collapses at a party where legal and illicit drugs are being used. Enroute to the hospital, he requires resuscitation with defibrillation to establish...
-
Calculating Sustainable Growth for the company in the previous problem, what is the sustainable growth rate?
-
Internal Growth Rates Calculate the internal growth rate for the company in the previous problem. Now calculate the internal growth rate using ROA X b for both beginning of period and end of period...
-
Internal Growth Rates Calculate the internal growth rate for the company in the previous problem. Now calculate the internal growth rate using ROA X b for both beginning of period and end of period...
-
Clearly explain what this algorithm does. feel free to convert this pseudocode into an actual java code if possible. Myst (ACo., n-1]); if n = 1; return ifn==2 if A[o]> A[i]: swap them return a What...
-
Maurice used to work in IT but decided it was time for a career change. He opened a restaurant called MessiJoes. You will be creating a program to help manage the restaurant operations. Your program...
-
build a circuit with the following expressions L1 = A+B L2= AB + (D+C) +B' L3=A'CD + AB (C+D) + A(BC+BD+B'C'D') L4= D'(A'C + AC') + ACD L5= C(D'+A')+ B(A'D+AD')
Study smarter with the SolutionInn App