For Questions 1 through 6 please use the following informati

For Questions 1 through 6, please use the following information:

Princess Tools Inc (2009) [2010]

Sales (5800) [6500] Cogs (3670) [4038] Current liabilities (703) [1055] Depreciation (125) [122] Cash (270) [300] Accounts Receivable (1045) [1234] Net fixed Assets (3008) [3342] Inventory (1474) [1533] Interest (290) [200] Taxes (600) [680] Common stock (2400) [2600] Long term debt (2500) [1200] Dividends (100) [100]

1. What is the Cash Flow to Creditors for 2010?

2. What is the Cash Flow to Stock Holders for 2010?

3. What is the Cash flow From Assets for 2010?

4. What is the Operating Cash Flow for 2010?

5. What is the Net Capital Spending for 2010?

6. What is the Change in Net Working Capital for 2010?

Solution

1. Cash Flow to Creditors for 2010 Cash Flow to Creditors = Interest Expenses - Ending Long term Debts + Beginning Long term Debts                                                = 200-1200+2500                                                = 1500 2. Cash flow to Stock holders for 2010 Cash Flow to Stock Holders = Dividend paid - Ending Common Stock + Beginning Capital Stock                                                         = 100-2600+2400                                                         =-100 3. Cash Flow from Assets for 2010 Cash flow from Assets = Operating Cash flow - Capital Spending - Change in NWC                                               = 1782-456+74                                               = 1400 Cash flow from Assets = Cash flow to Creditors+Cash Flow to Stockholders                                               = 1500-100                                              = 1400 4. Operating Cash Flow for 2010 Operating Cash Flow = EBIT + Depreciation - Taxes EBIT = Sales - COGS - Depreciation = 6500-4038-122=2340 Operating Cash Flow = 2340+122-680                                            = 1782 5. Net Capital Spending for 2010 Capital Spending = Ending Net fixed assets - Beginning Net Fixed Assets +Depreciation                                    = 3342-3008+122                                     = 456 6. Change in Net Working Capital for 2010 Additions to NWC = Ending NWC - Beginning NWC Ending NWC = Ending Current Assets - Ending Current Liabilities                            = (300+1234+1533)-1055                            = 3067-1055                            = 2012 Beginning NWC = Beginning Current Assets - Beginning Current Liabilities                                  = (270+1045+1474)-703                                  = 2789-703                                  = 2086 Change in NWC = 2012-2086                                   = -74