Reference no: EM131107629

Galaxy Interiors 2011 Income Statement (5 in millions)
Net sales	Suits
Cost of goods sold	16,408
Deprecation	1,611
Earnings before interest and taxes	3,396
Interest paid	1,282
Taxable Income	$2,114
Less: Taxes	740
Net income	$1,374

Galaxy Interiors 2010 and 2011 Balance Sheets ($ in millions)
	2010	2011		2010	2011
Cash	$668	$297	Accounts payable	$1,694	1,572
Accounts receivable	1,611	1,527	Notes payable	2,500	0
Inventory	3,848	2,947	Total	$4,194	$1,532
Total	$6,127	$4,771.00	Long-term debt	9,800	10,650
Net fixed asses	17,489	17,107	Common stock	7,500	7,000
			Retained earnings	2,122	2,696
Total assets	$23,616	$21,878	Total liab. & equity	$23,616	$21,878

1. What is the operating cash flow for 2011? OCF in 2011 = EBIT + DEPRECIATION - TAX

2. What is the amount of net capital spending for 2011? Net capital spending = Fixed asset in 2011 - Fixed asset in 2010 + Depreciation in 2011

3. What is the net investment on working capital in 2011 (Change in net working capital)?

Change in NWC = NWC in 2011 - NWC in 2010 = (CA in 2011 - CL in 2011) - ( CA in 2010 - CL in 2010)

4. What is the cash flow from assets for 2011?

Cash flow from assets = OCF - Net capital spending - Change in NWC

5. What is the cash flow to creditors in 2011?

Cash flow to creditors = interest expense in 2011 - (long term debt in 2011 - long term debt in 2010)

6. What is the cash flow to stockholders in 2011? cash flow to stockholders = cash flow from asset - cash flows to creditors