What was the addition to net working capital

Assignment Help Financial Management
Reference no: EM131872514

Gorman Distributors shows the following information on its 2014 income statement:

sales = $300,000;

costs = $200,000;

other expenses = $40,000;

depreciation expense = $30,000;

interest expense = $2,000;

taxes = $20,000;

dividends = $10,000.

In addition, you're told that:

-the firm issued $4,500 in new equity during 2014,

-redeemed $6,500 in outstanding long-term debt.

If net fixed assets increased by $7,000 during the year, what was the addition to net working capital?

OCF = EBIT + Depr - Tax

NCS = Change in Net fixed asset + Depr

CFCR = Interest - (Net new borrowing) = ??

CFSH = = Dividend - (Net new equity) = ??

From Cash flow identity:

CFFA = OCF - NCS - Change in NWC = CFCR + CFSH

Change in NWC = 

Reference no: EM131872514

Questions Cloud

Explain the concept and purpose of the professional sports : Explain the concept and purpose of the professional sports team salary cap. Also explain the difference between a franchise
How many different types of trna molecules exist in the cell : How many different types of tRNA molecules exist in the cell? For what purpose (hint: why are there 20 different tRNA molecules)?
Analyze each reason listed above as a reason for a diversity : Analyze each reason listed above as a reason for a diversity of approaches to software construction and modeling, and give your opinion.
Evaluate how consultants can be good or bad for labor : Evaluate how consultants can be good or bad for labor relations. Analyze the types of tactics are described on their sites.
What was the addition to net working capital : If net fixed assets increased by $7,000 during the year, what was the addition to net working capital?
Determine variable cost per unit and total fixed cost : determine (a) the variable cost per unit and (b) the total fixed cost. Round all answers to the nearest whole dollar.
Account food chains when repopulating native species : If you were going to reclaim an area in a city near you, what plant species would you use for ground cover, and what animal species would be able to live?
What did the authors accomplish with this research effort : Explain/describe the artifact that is the subject of this article. If there isn't an artifact, briefly explain why you think that is.
What are the cost and profitability implications : What are the cost and profitability implications to a company with substantial production investment when the results of development are used

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd