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Concept explainers
A.
Statement of cash flows:
Statement of cash flow is a financial statement that shows the cash and cash equivalents of a company for a particular period of time. It shows the net changes in cash, by reporting the sources and uses of cash as a result of operating, investing, and financing activities of a company.
Free cash flow describes the net cash provided from operating activities after making required adjustments for dividends and capital expenditures. In other words, it is the cash flow arrived after making payment for capital expenditures and dividend payments.
The net change in cash for each year.
B.
The free cash flow.
C.
The free cash flow being used based on the data provided.
D.
The better method for measuring the cash flow available for investment, dividends, debt repayment, and stock repurchases. Also explain the change in cash for the period or the free cash flow.
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Chapter 13 Solutions
Bundle: Managerial Accounting, Loose-leaf Version, 14th - Book Only
- Ratio of cash to monthly cash expenses Pacira Pharmaceuticals Inc. (PCRX) Develops, produces, and sells products used in hospitals and surgery centers. The following data (in thousands) were adapted from recent financial statements. Including short-term investments as part of cash and cash equivalents, compute the ratio of cash to monthly cash expenses for Years 1 and 2. Round to one decimal place.arrow_forwardes Aim Limited has the following selected data ($ in millions): Cash balance, January 1 Financing cash flows Capital expenditures Investing cash flows Operating cash flows $ 180 1,090 (400) (500) (440) Required: 1. Calculate the balance of cash at the end of the fiscal year, December 31. 2. Calculate free cash flows. 3. Based on the pattern in cash flows, determine Aim's life cycle stage. Note: Amounts to be deducted should be indicated by a minus sign. 1. Cash balance, December 31 2. Free cash flows 3. Aim's probable life cycle stagearrow_forwardRatio of Cash to Monthly Cash Expenses Financial data for Bonita Company follows: For Year EndedDecember 31 Cash on December 31 $187,180 Cash flow from operations (458,400) a. Compute the ratio of cash to monthly cash expenses. Round your answer to one decimal place.fill in the blank 1 months b. Interpret the results computed in (a).arrow_forward
- Free cash flow Dillin Inc. reported the following on the company's statement of cash flows in 20Y2 and 20Y1: 20Y2 20Y1 Net cash flow from operating activities $476,200 $456,200 Net cash flow used for investing activities (429,000) (379,000) Net cash flow used for financing activities (41,000) (57,000) Eighty percent of the net cash flow used for investing activities was used for the purchase of property, plant, and equipment. a. Determine Dillin's free cash flow for both years. 20Y2 20Y1 Free cash flow $ b. Has Dillin's free cash flow improved or declined from 20Y1 to 20Y2?arrow_forwardThe following data is given for DGR Company: Net cash flows from operating activities $6,000,000 Cash and cash equivalents at end of year $2,700,000 DGR Company's ratio of cash to monthly cash expenses is ____. a.3.2 months b.4.5 months c.5.4 months d.8.1 monthsarrow_forwardFor each separate case, compute the required cash flow information for BioClean. Case A: Compute cash interest received Interest revenue $5,000 Interest receivable, beginning of year 600 Interest receivable, end of year . 1,700 Case B: Compute cash paid for wages Wages expense $9,000 Wages payable, beginning of year . . . . . . . 2,200 Wages payable, end of year . . . . . . . 1,000arrow_forward
- Free cash flow Dillin Inc. reported the following on the company’s statement of cash flows in 20Y2 and 20Y1: 20Y2 20Y1 Net cash flow from operating activities $476,200 $452,000 Net cash flow used for investing activities (429,000) (375,000) Net cash flow used for financing activities (45,000) (59,000) Eighty percent of the net cash flow used for investing activities was used for the purchase of property, plant, and equipment. a. Determine Dillin’s free cash flow for both years. 20Y2 20Y1 Free cash flow $fill in the blank 1 $fill in the blank 2arrow_forwardPreparation of SCF for a Single Proprietorship Instructions: Prepare a Statement of Cash Flows for the year ended December 31,2020 the using the following account titles listed. Use the Direct Method. You may use any desired business name. Use the space provided for your answer. Cash from Clients – 450,000 Cash Payment for merchandise – 410,500 Cash receipt from additional investment of owner – 114,450 Cash receipt from sale of equipment - 15,000 Cash withdrawal by the owner – 80,000 Cash, January 1, 2020 - 120,000 Credit sales – 35,000 Depreciation expense – 15,410 Paid loan from a bank - 111,000 Payment to interest expense – 10,000 Payment to suppliers – 20,000 Payment to utilities – 30,000 Payments to Employees – 14,800arrow_forwardcourses/ The cash balance of Saadah Company is 32700 OMR at the beginning of the year. The cash flows during the year are given as follows; Operating cash inflow: 37800 Financing cash inflow: 22300 Investing outflow: 29000 Which of the following is the cash balance at the end of the year. Select one: O a. 64000 Ob. 121800 Oc. 68300 O d. 63800 Clear my choicearrow_forward
- Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College PubFinancial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
- Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
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