Prescott Football Manufacturing had the following operating results for 2019: sales = $29,874; cost of goods sold
Question:
Prescott Football Manufacturing had the following operating results for 2019: sales = $29,874; cost of goods sold = $21,632; depreciation expense = $3,470; interest expense = $514; dividends paid = $825. At the beginning of the year, net fixed assets were $19,872, current assets were $3,557, and current liabilities were $3,110. At the end of the year, net fixed assets were $22,987, current assets were $4,381, and current liabilities were $2,981. The tax rate for 2019 was 24 percent.
a. What is net income for 2019?
b. What is the operating cash flow for 2019?
c. What is the cash flow from assets for 2019? Is this possible? Explain.
d. If no new debt was issued during the year, what is the cash flow to creditors? What is the cash flow to stockholders? Explain and interpret the positive and negative signs of your answers in parts (a) through (d).
Cash Flow From AssetsCash flow from assets is the aggregate total of all cash flows related to the assets of a business. This information is used to determine the net amount of cash being spun off by or used in the operations of a business. The concept is comprised of...
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Essentials of Corporate Finance
ISBN: 978-1260013955
10th edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan