
B-14 SOLUTIONS
2008 Income Statement 2009 Income Statement
Sales $7,233.00 Sales $8,085.00
COGS 2,487.00 COGS 2,942.00
Other expenses 591.00 Other expenses 515.00
Depreciation 1,038.00 Depreciation 1,085.00
EBIT $3,117.00 EBIT $3,543.00
Interest 485.00 Interest 579.00
EBT $2,632.00 EBT $2,964.00
Taxes (34%) 894.88 Taxes (34%) 1,007.76
et income $1,737.12 Net income $1,956.24
Dividends $882.00 Dividends $1,011.00
Additions to RE 855.12 Additions to RE 945.24
26. OCF = EBIT + Depreciation – Taxes = $3,543 + 1,085 – 1,007.76 = $3,620.24
Change in NWC = NWCend – NWCbeg = (CA – CL) end – (CA – CL) beg
= ($19,488 – 4,742) – ($17,740 – 4,716)
= $1,722
Net capital spending = NFAend – NFAbeg + Depreciation
= $33,921 – 31,805 + 1,085 = $3,201
Cash flow from assets = OCF – Change in NWC – Net capital spending
= $3,620.24 – 1,722 – 3,201 = –$1,302.76
Cash flow to creditors = Interest – Net new LTD
Net new LTD = LTDend – LTDbeg
Cash flow to creditors = $579 – ($15,435 – 12,700) = –$2,156
Net new equity = Common stockend – Common stockbeg
Common stock + Retained earnings = Total owners’ equity
Net new equity = (OE – RE) end – (OE – RE) beg
= OEend – OEbeg + REbeg – REend
REend = REbeg + Additions to RE08
Net new equity = OEend – OEbeg + REbeg – (REbeg + Additions to RE08)
= OEend – OEbeg – Additions to RE
Net new equity = $33,232 – 32,129 – 945.24 = $157.76
CFS = Dividends – Net new equity
CFS = $1,011 – 157.76 = $853.24
As a check, cash flow from assets is –$1,302.76.
CFA = Cash flow from creditors + Cash flow to stockholders
CFA = –$2,156 + 853.24 = –$1,302.76