The 2020 balance sheet of Osaka's Tennis Shop, Incorporated, showed long-term debt of $5.2 million, and the 2021 balance sheet showed long-term debt of $5.4 million. The 2021 income statement showed an interest expense of $125,000. What was the firm's cash flow to creditors during 2021? (A negative answer should be indicated by a minus sign. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.) Cash flow to creditors

The 2020 balance sheet of Osaka's Tennis Shop, Incorporated, showed long-term debt of $5.2 million, and the 2021 balance sheet showed long-term debt of $5.4 million. The 2021 income statement showed an interest expense of $125,000. What was the firm's cash flow to creditors during 2021? (A negative answer should be indicated by a minus sign. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.) Cash flow to creditors

Fundamentals Of Financial Management, Concise Edition (mindtap Course List)

10th Edition

ISBN:9781337902571

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter16: Financial Planning And Forecasting

Section: Chapter Questions

Problem 3P: AFN EQUATION Refer to Problem 16-1 and assume that the company had 3 million in assets at the end of...

See similar textbooks

Similar questions

Stevens Textile Corporations 2019 financial statements are shown here. Stevens grew rapidly in 2019 and financed the growth with notes payable and long-term bonds. Stevens expects sales to grow by 15% in the next year but will finance the growth with a line of credit, not notes payable or long-term bonds. Use the forecasted financial statement method to forecast a balance sheet and income statement for December 31, 2020. The interest rate on all debt is 10%, and cash earns no interest income. The line of credit is added at the end of the year, which means that you should base the forecasted interest expense on the balance of debt at the beginning of the year. Use the forecasted income statement to determine the addition to retained earnings. Assume that the company was operating at full capacity in 2019, that it cannot sell off any of its fixed assets, and that assets, spontaneous liabilities, and operating costs are expected to increase by the same percentage as sales. a. What is the projected value for earnings before interest and taxes? b. What is the projected value for pre-tax earnings? c. What is the projected net income? d. What is the projected addition to retained earnings? e. What is the projected value of total current assets? f. What is the projected value of total assets? g. What is the projected sum of accounts payable, accruals, and notes payable? h. What is the forecasted line of credit? Balance Sheet as of December 31, 2019 (Thousands of Dollars) Income Statement for December 31, 2019 (Thousands of Dollars)
AFN EQUATION Refer to Problem 16-1 and assume that the company had 3 million in assets at the end of 2019. However, now assume that the company pays no dividends. Under these assumptions, what additional funds would be needed for the coming year? Why is this AFN different from the one you found in Problem 16-1?
LONG-TERM FINANCING NEEDED At year-end 2019, total assets for Arrington Inc. were 1.8 million and accounts payable were 450,000. Sales, which in 2019 were 3.0 million, are expected to increase by 25% in 2020. Total assets and accounts payable are proportional to sales, and that relationship will be maintained; that is, they will grow at the same rate as sales. Arrington typically uses no current liabilities other than accounts payable. Common stock amounted to 500,000 in 2019, and retained earnings were 475,000. Arrington plans to sell new common stock in the amount of 130,000. The firms profit margin on sates is 5%; 35% of earnings will be retained. a. What were Arringtons total liabilities in 2019? b. How much new long-term debt financing will be needed in 2020? (Hint: AFN - New stock = New long-term debt.)
The 2020 balance sheet of Osaka’s tennis shop, incorporated, showed long-term debt of $3.5 million, and the 2021 balance sheet showed long-term debt of $3.75 million. The 2021 income statement showed an interest expense of $160,000. The 2020 balance sheet showed $500,000 in the common stock account and $3.3 million in the additional paid-in surplus account. The 2021 balance sheet showed $540,000 and $3.5 million in the same two accounts, respectively. The company paid out $405,000 in cash dividends during 2021. Suppose you also know that the firm’s net capital spending for 2021 was $1,360,000, and that the firm reduced its net working capital investment by $67,000. Operating cash flow?
The 2020 balance sheet of Osaka's Tennis Shop, Incorporated, showed long-term debt of $2.5 million, and the 2021 balance sheet showed long-term debt of $2.65 million. The 2021 income statement showed an interest expense of $100,000. During 2021, the company had a cash flow to creditors of –$50,000 and the cash flow to stockholders for the year was $60,000. Suppose you also know that the firm’s net capital spending for 2021 was $1.31 million and that the firm reduced its net working capital investment by $57,000. What was the firm’s 2021 operating cash flow, or OCF? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)
The 2020 balance sheet of Osaka’s Tennis Shop, Incorporated, showed long-term debt of $2.25 million, and the 2021 balance sheet showed long-term debt of $2.66 million. The 2021 income statement showed an interest expense of $305,000. During 2021, Osaka’s Tennis Shop, Incorporated, realized the following: Cash flow to creditors –$ 105,000 Cash flow to stockholders $ 209,000 Suppose you also know that the firm’s net capital spending for 2021 was $1.5 million and that the firm reduced its net working capital investment by $55,000. What was the firm’s 2021 operating cash flow, or OCF?
The 2020 balance sheet of Osaka’s Tennis Shop, Incorporated, showed long-term debt of $5.2 million, and the 2021 balance sheet showed long-term debt of $5.45 million. The 2021 income statement showed an interest expense of $170,000. The 2020 balance sheet showed $520,000 in the common stock account and $5.5 million in the additional paid-in surplus account. The 2021 balance sheet showed $560,000 and $5.7 million in the same two accounts, respectively. The company paid out $415,000 in cash dividends during 2021. Suppose you also know that the firm’s net capital spending for 2021 was $1,380,000, and that the firm reduced its net working capital investment by $71,000. What was the firm’s 2021 operating cash flow, or OCF?
The 2020 balance sheet of Osaka’s Tennis Shop, Incorporated, showed long-term debt of $2.25 million, and the 2021 balance sheet showed long-term debt of $2.66 million. The 2021 income statement showed and interest expense of $305,000. The 2020 balance sheet showed $780,000 in the common stock account and $4.78 million in the additional paid-in surplus account. The 2021 balance sheet showed $965,000 and $5.04 million in the same two accounts, respectively. The company paid out $654,000 in cash dividends during 2021. Suppose you also know that the firm’s net capital spending for 2021 was $1.5 million and that the firm reduced its net working capital investment by $55,000. What was the firm’s 2021 operating cash flow, or OCF?
The 2020 balance sheet of Osaka’s Tennis Shop, Incorporated, showed $590,000 in the common stock account and $4.8 million in the additional paid-in surplus account. The 2021 balance sheet showed $630,000 and $5.3 million in the same two accounts, respectively. If the company paid out $600,000 in cash dividends during 2021, what was the cash flow to stockholders for the year? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)
The 2019 balance sheet of Dyrdek’s Skate Shop, Inc., showed long-term debt of $5.2 million, and the 2020 balance sheet showed long-term debt of $5.4 million. The 2020 income statement showed an interest expense of $125,000. What was the firm’s cash flow to creditors during 2020
The 2018 balance sheet of Spieth’s Golf Shop, Inc., showed long-term debt of $1.565 million, and the 2019 balance sheet showed long-term debt of $1.645 million. The 2019 income statement showed an interest expense of $170,000. What was the firm’s cash flow to creditors during 2019? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)
The 2018 balance sheet of Dido Daffodil Depot, Inc., showed long-term debt of $2.9 million, and the 2019 balance sheet showed long-term debt of $3.1 million. The 2019 income statement showed an interest expense of $145,000. During 2019, the company had a cash flow to creditors of –$55,000, and the cash flow to stockholders for the year was $80,000. Suppose you also know that the firm’s net capital spending for 2019 was $1,330,000, and its change in net working capital was -$61,000. What was the firm’s 2019 operating cash flow (OCF)? Group of answer choices $1,430,000 $1,263,000 $1,365,000 $1,294,000 $1,520,000