Case Solutions for Corporate Finance Ross, Westerfield, and Jaffe 9th Edition

25033 Words Jan 4th, 2012 101 Pages
Case Solutions

Corporate Finance

Ross, Westerfield, and Jaffe
9th edition


The operating cash flow for the company is: (NOTE: All numbers are in thousands of dollars)

OCF = EBIT + Depreciation – Current taxes OCF = $1,332 + 159 – 386 OCF = $1,105

To calculate the cash flow from assets, we need to find the capital spending and change in net working capital. The capital spending for the year was:

| |Capital spending | |
| |Ending net fixed assets |$2,280 |
| |– Beginning net fixed assets |1,792 |
| |+ Depreciation
…show more content…
The firm had positive earnings in an accounting sense (NI > 0) and had positive cash flow from operations and a positive cash flow from assets. The firm invested $142 in new net working capital and $647 in new fixed assets. The firm was able to return $241 to its stockholders and $75 to creditors.

2. The financial cash flows present a more accurate picture of the company since it accurately
Open Document