Case: Awaking Clothing is a fashion brand that specializes in selling high-end clothing. The founder, Jane...

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Case: Awaking Clothing is a fashion brand that specializes in selling high-end clothing. The founder, Jane Smith, is responsible for designing and marketing the products but has limited experience in managing business operations. Consequently, the financial records are not well maintained. Despite this, the brand has gained popularity through positive word of mouth from satisfied customers. Jane plans to expand the business by opening a new store in New York and supplying other retailers. She intends to finance this by borrowing money from banks and additional investors. A financial analyst was hired to evaluate the company's performance over the past year. After carefully reviewing the records, she has gathered all the necessary information. COGS Cash Depreciation Interest expense Selling and administrative expenses Accounts payable Net fixed assets Sales Accounts receivable Notes payable Long-term debt Inventory New equity 2022 2021 $323,077 $339,937 46,615 41.273 91,201 85,901 19,848 18,936 53,534 82,397 5- Cash flow to creditors for 2022. 6- Cash flow to stockholders for 2022. 402,364 633,775 69,103 76,175 438,210 643,780 35,706 33,032 37,554 34,169 203,098 190,042 69,511 79,493 0 0 14,511 Awaking Clothing currently retains back 75 percent of its net income and has a corporation tax rate of 25% You are the financial analyst's assistant, and he has asked you to prepare the following: 1. An income statement for 2021 and 2022. 2- A balance sheet for 2021 and 2022. 3- Operating cash flow for each year. 4- Cash flow from assets for 2022. Questions 1- How would you describe Awaking Clothing's cash flows for 2022? Write a brief discussion. 2- In light of your discussion in the previous question, what do you think about company's expansion plans? Case: Awaking Clothing is a fashion brand that specializes in selling high-end clothing. The founder, Jane Smith, is responsible for designing and marketing the products but has limited experience in managing business operations. Consequently, the financial records are not well maintained. Despite this, the brand has gained popularity through positive word of mouth from satisfied customers. Jane plans to expand the business by opening a new store in New York and supplying other retailers. She intends to finance this by borrowing money from banks and additional investors. A financial analyst was hired to evaluate the company's performance over the past year. After carefully reviewing the records, she has gathered all the necessary information. COGS Cash Depreciation Interest expense Selling and administrative expenses Accounts payable Net fixed assets Sales Accounts receivable Notes payable Long-term debt Inventory New equity 2022 2021 $323,077 $339,937 46,615 41.273 91,201 85,901 19,848 18,936 53,534 82,397 5- Cash flow to creditors for 2022. 6- Cash flow to stockholders for 2022. 402,364 633,775 69,103 76,175 438,210 643,780 35,706 33,032 37,554 34,169 203,098 190,042 69,511 79,493 0 0 14,511 Awaking Clothing currently retains back 75 percent of its net income and has a corporation tax rate of 25% You are the financial analyst's assistant, and he has asked you to prepare the following: 1. An income statement for 2021 and 2022. 2- A balance sheet for 2021 and 2022. 3- Operating cash flow for each year. 4- Cash flow from assets for 2022. Questions 1- How would you describe Awaking Clothing's cash flows for 2022? Write a brief discussion. 2- In light of your discussion in the previous question, what do you think about company's expansion plans?

Answer rating: 100% (QA)

1 Income Statement for 2021 and 2022 2021 Net Income2021643780339937912011893669103 Net Income2021124603 2022 Revenue 633775 COGS 323077 Depreciation 41273 Interest Expense 19848 Selling and Administr... View the full answer