a.
To compute: The net operating working capital for 2014 and 2015.
Income Statement: A part of financial statements that lists the income and expenses of business for an accounting year is called income statement. It is prepared at the end of accounting period to know the profitability of the` business.
b.
To compute: The
Free Cash Flow: The cash generated over and above required by business operations and capital expenditure is called free cash flow. Statement of cash flow reports the cash flow generated or consumed by the business.
c.
To explain: The large increase in dividends in 2015.
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Chapter 3 Solutions
Study Guide For Brigham/houston's Fundamentals Of Financial Management, 14th
- Cash flow identity. Use the data from the following financial statements in the popup window,. The company paid interest expense of $17,100 for 2017 and had an overall tax rate of 40% for 2017. Verify the cash flow identity: cash flow from assets = cash flow to creditors + cash flow to owners The cash flow from assets is $ (Round to the nearest dollar.)arrow_forwardSelect 2017 Year From The Given Data In Image And Find The Following thing:1) Balance Sheet Growth - (TOTAL ASSETS CURRENT YEAR- TOTAL ASSETS CURRENT YEAR) / TOTAL ASSETS PREVIOUS YEAR.2) Sales.3) Financial Exp as a % of Sales4) EBIT5) Financial Cost / Interest Expensearrow_forwardWhat is the 2015 cash flow to stockholders? If net fixed assets increased by $28,400 during the year, what was the addition to net working capital (NWC)?arrow_forward
- Cash flow identity. Use the data from the following financial statements in the popup window, . The company paid interest expense of $17,100 for 2017 and had an overall tax rate of 40% for 2017. Verify the cash flow identity: cash flow from assets = cash flow to creditors + cash flow to owners The cash flow from assets is $ 24,380. (Round to the nearest dollar.) The cash flow to creditors is $ (Round to the nearest dollar.)arrow_forwardCash flow to owners. Use the data from the following financial statements in the popup window,. The company paid interest expense of $18,900 for 2017 and had an overall tax rate of 40% for 2017. Find the cash flow to owners for 2017 by parts and total, with the parts being dividends paid and increases in borrowing from owners (change in common stock and paid-in-surplus). The distributed earnings is $ Net new borrowing from owners is $ The cash flow to owners is $ (Round to the nearest dollar.) (Round to the nearest dollar.) (Round to the nearest dollar.)arrow_forwardYou are a financial Manager of Chevron Corp. You need to assess the effectiveness of working capital management of the company for 2018 using the following data. What is the 2018 Receivable turnover? 2017 Account Receivable = 15,353 000 2018 Account Receivable = 15.050,00O 2017 Inventory = 5,585.000 2018 Inventory = 5 704.00O 2017 Accounts Payable= 14 565 00I 2018 Accounts Payable = 13 953 000 2017 Sales 134,674 000 2018 Sales 158.902 000. 2017 Cost of Sales = 95 114.000 2018 Cost of Sales = 113 997 000 2017 Purchases= 95 114 000 2018 PurchaSes = 123 435 000arrow_forward
- Use the image shown attached 1 (As balance sheet) and 2 (income statement) financial statements for Silk Airways LTD. a. Calculation for Free Cash flow using Method 1 and Method 2 for 2018 and 2019. b. Provide first and second level breakdown of the company's return on common equity (ROCE) for 2017, 2018 and 2019 c. Discuss the drivers of profitability for 2017, 2018 and 2019.arrow_forwardYou are given the financial statements of a company for over the 6-year periods (2016 –2021). Considering 2016 as the base year, compute the trend index for the following items:a. Revenue, cost of goods sold, total expenses and net earnings. Comment on the trends of each of the items.b. Total assets, total liabilities and shareholders’ equity. Comment on the trends of each of the items.c. Cash flow from operation, cash flow from investing, cash flow from financing and closing cash balances. Comment on the trends of each of the items.arrow_forwardUsing the Balance Sheets and Income Statement below, please calculate the following ratios for Smolira Golf Corp. (use year-end figures rather than average values where appropriate): Profitability ratios: Profit Margin Return on Assets Return on Equity We will follow up and discuss your calculations during this week's live session. SMOLIRA GOLD CORP.2014 and 2015 Balance Sheets Assets ($) Liabilities and Owners' Equity ($) 2014 2015 2014 2015 Current Assets Current Liabilities Cash 26,450 29,106 Accounts Payable 30,602 35,485 Accounts Receivable 13,693 18,282 Notes Payable 15,840 13,500 Inventory 27,931 32,586 Other 15,280 20,441 Total 68,074 79,974 Total 61,722 69,426 Long-term debt 95,000 110,000 Fixed Assets Owner's equity Net Plant and Equipment 357,165 398,346 Common stock and paid-in surplus 45,000 45,000…arrow_forward
- Using the Balance Sheets and Income Statement below, please calculate the following ratios for Smolira Golf Corp. (use year-end figures rather than average values where appropriate): Times interest earned ratio Cash coverage ratio SMOLIRA GOLD CORP.2014 and 2015 Balance Sheets Assets ($) Liabilities and Owners' Equity ($) 2014 2015 2014 2015 Current Assets Current Liabilities Cash 26,450 29,106 Accounts Payable 30,602 35,485 Accounts Receivable 13,693 18,282 Notes Payable 15,840 13,500 Inventory 27,931 32,586 Other 15,280 20,441 Total 68,074 79,974 Total 61,722 69,426 Long-term debt 95,000 110,000 Fixed Assets Owner's equity Net Plant and Equipment 357,165 398,346 Common stock and paid-in surplus 45,000 45,000 Accumulated retained earnings 223,517 253,893 Total 268,517 298,893 Total Assets…arrow_forwardFinancial information for Powell Panther Corporation is shown here. a. What was net operating working capital for 2018 and 2019? Assume the firm has no excess cash.b. What was the 2019 free cash flow?c. How would you explain the large increase in 2019 dividends?arrow_forwardCalculation and interpretation of ratios. Data for White Star Limited: Net operating profit after tax is $25 million (2018: $38 million). 1. Use the information above to calculate for 2019 and 2018: a working capital b current ratio c quick ratio d debt-to-equity ratio e return on equity ratio f earnings per share ratio. 2. Identify two warning signals that could have negative implications with respect to the company ’ s ability to generate cash flows to meet its future needs. In each case, explain why the signal you have identified could reflect a cash flow problem. 3. At the annual general meeting of White Star, the managing director, Ms Rose Dawson, made the following statement: ‘ Recently a number of articles in the financial press have questioned the financial position of our company. This criticism is totally unjustified. Net profit was $25 million and total assets have increased by $160 million. These results show that 2019 was a very successful year for White Star. ’ Comment on…arrow_forward
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