ALTE DOCUMENTE
|
||||||||||
Course: Corporate Finance
Year of Study: II
Cash Flow Statement Analysis.
1. Prepare the cash flow statements using the following data of the "WxL" Company
|
Balance Sheet: |
December 31st 2004 |
December 31st 2005 |
A source of cash |
A use of Cash |
|
Cash |
|
|
|
|
|
Accounts receivable |
|
|
|
|
|
Inventory |
|
|
|
|
|
Buildings&equipment (Gross Value) |
|
|
|
|
|
Minus Fixed assets depreciation |
|
|
|
|
|
Buildings&equipment (Net Value) |
|
|
|
|
|
Land |
|
|
|
|
|
|
|
|
|
|
|
Taxes payables |
|
|
|
|
|
Notes Payable |
|
|
|
|
|
Accounts Payable |
|
|
|
|
|
Bonds Payable |
|
|
|
|
|
Accumulated Retained Earnings |
|
|
|
|
|
Common Stock |
|
|
|
|
|
|
|
|
|
|
Rules:
Any increase in assents and any decrease in liabilities and equity means we use cash
Any decrease in assets and any increase in liabilities and equity means we generate cash
CF from operating activities:
Net Income = 30.000 RON
+ Increase in Depreciation = 9.000 RON
+ Decrease of Accounts Receivables = 20.000 RON
- Increase in inventories = 70.000 RON
+ Increase in Notes Payable = 7.000 RON
+ Increase in Accounts Payable = 5.000 RON
= Operating CF = 1.000 RON
CF from investment activities
- Increase in gross Building & Equipment = 24.000 RON
- Increase in lande = 4.000 RON
= Investment CF = -28.000 RON
CF from financing activities
+ Increase in Bonds Payable = 17.000 RON
- Paid dividends = 5.000 RON
= Financing Cash-Flow = 12.000 RON
Total CF = 1.000 - 28.000 + 12.000 = -15.000 RON
CF Statement:
Cash on December 31st 2004: 30.000 RON
CF during 2005: (15.000) RON
Cash on December 31st 2005: 15.000 RON
|
Balance sheet |
|
|
|
Income statement |
|
|
Cash |
|
|
|
Sales |
|
|
Marketable securities |
|
|
|
Cost of good sold |
|
|
Accounts Receivables |
|
|
|
Rent expenses |
|
|
Inventories |
|
|
|
Salaries expense |
|
|
Prepaid expenses |
|
|
|
Advertising expense |
|
|
Total Current Assets |
|
|
|
EBITDA |
|
|
Gross Fixed Assets |
|
|
|
Depreciation |
|
|
less: accumulated depreciation |
|
|
|
EBIT |
|
|
Net Fixed Assets |
|
|
|
Interest expense |
|
|
Total Assets |
|
|
|
EBT |
|
|
Accounts Payable |
|
|
|
tax expense (40%) |
|
|
Notes Payable |
|
|
|
Net Income |
|
|
Dividend payable |
|
|
|
|
|
|
Accruals |
|
|
|
Statement of Retained Earnings |
|
|
Total Current Liabilities |
|
|
|
Beginning balance, January 1, 2003 |
|
|
Long-term debt |
|
|
|
Net income |
|
|
Common stock |
|
|
|
Dividend declared |
|
|
Retained Earnings |
|
|
|
Ending balance, December 31, 1993 |
|
|
Total Equity |
|
|
|
|
|
|
Total liabilities and Equity |
|
|
|
|
|
& Questions an Problems - Financial Cash Flow (pg 31,32 - Ross, Westerfield, Jaffe - Corporate finance, fourth edition, Irwin, 1996)
& Quiz 8/pg127 (R.A. Brealey, S.C. Myres, A.J. Marcus - Fundamentals of Corporate Finance, Mc Graw Hill, 2001);
& Practice Problems 13,14,17,18/pg128,129 (R.A. Brealey, S.C. Myres, A.J. Marcus - Fundamentals of Corporate Finance, Mc Graw Hill, 2001);
|
