how do you calculate capital spending off a firm's 10-K financial statements? Is it the capital spending amount on the cash flow statement or net fixed assets end - net fixed assets (or PP&E) beginning + depreciation? Also, which depreciation figure do you use? should you subtract end depreciation from beginning depreciation, or just use the end depreciation figure? Thank you!
how do you calculate capital spending off a firm's 10-K financial statements? Is it the capital spending amount on the cash flow statement or net fixed assets end - net fixed assets (or PP&E) beginning + depreciation? Also, which depreciation figure do you use? should you subtract end depreciation from beginning depreciation, or just use the end depreciation figure? Thank you!
Related questions
| 1. Bowyer Driving Schoolâs 2014 balance sheet showed net fixed assets of $4.4 million, and the 2015 balance sheet showed net fixed assets of $5.1 million. The companyâs 2015 income statement showed a depreciation expense of $240,000.What was net capital spending for 2015?
| |||||||||||||||||
Graffiti Advertising, Inc., reported the following financialstatements for the last two years.
| 2016 Income Statement | |||
| Sales | $ | 567,200 | |
| Costs of goods sold | 274,005 | ||
| Selling and administrative | 124,729 | ||
| Depreciation | 54,572 | ||
| EBIT | $ | 113,894 | |
| Interest | 19,384 | ||
| EBT | $ | 94,510 | |
| Taxes | 37,804 | ||
| Net income | $ | 56,706 | |
| Dividends | $ | 10,000 | |
| Addition to retained earnings | $ | 46,706 | |
| GRAFFITI ADVERTISING, INC. Balance Sheet as of December 31, 2015 | |||||||
| Cash | $ | 13,360 | Accounts payable | $ | 9,500 | ||
| Accounts receivable | 18,990 | Notes payable | 14,504 | ||||
| Inventory | 13,798 | Current liabilities | $ | 24,004 | |||
| Current assets | $ | 46,148 | |||||
| Long-term debt | $ | 136,480 | |||||
| Net fixed assets | $ | 344,546 | Owner's equity | $ | 230,210 | ||
| Total assets | $ | 390,694 | Total liabilities and ownersâ equity | $ | 390,694 | ||
| GRAFFITI ADVERTISING, INC. Balance Sheet as of December 31, 2016 | |||||||
| Cash | $ | 14,346 | Accounts payable | $ | 10,516 | ||
| Accounts receivable | 21,095 | Notes payable | 16,470 | ||||
| Inventory | 22,758 | Current liabilities | $ | 26,986 | |||
| Current assets | $ | 58,199 | |||||
| Long-term debt | $ | 152,400 | |||||
| Net fixed assets | $ | 406,307 | Owner's equity | $ | 285,120 | ||
| Total assets | $ | 464,506 | Total liabilities and ownersâ equity | $ | 464,506 | ||
a. Calculate the operating cash flow.(Do not round intermediate calculations and round youranswer to the nearest whole number, e.g., 32.)
Operating cash flow $
b. Calculate the change in net working capital.(Do not round intermediate calculations and round youranswer to the nearest whole number, e.g., 32.)
Change in net working capital $
c. Calculate the net capital spending. (Donot round intermediate calculations and round your answer to thenearest whole number, e.g., 32.)
Net capital spending $
d. Calculate the cash flow from assets. (Anegative answer should be indicated by a minus sign. Do not roundintermediate calculations and round your answer to the nearestwhole number, e.g., 32.)
Cash flow from assets $
e. Calculate the cash flow to creditors.(Do not round intermediate calculations and round youranswer to the nearest whole number, e.g., 32.)
Cash flow to creditors $
f. Calculate the cash flow to stockholders.(A negative answer should be indicated by a minus sign. Donot round intermediate calculations and round your answer to thenearest whole number, e.g., 32.)
Cash flow to stockholders $
Excel Online Structured Activity: Statement of cash flows
You have just been hired as a financial analyst for BarringtonIndustries. Unfortunately, company headquarters (where all of thefirm's records are kept) has been destroyed by fire. So, your firstjob will be to recreate the firm's cash flow statement for the yearjust ended. The firm had $100,000 in the bank at the end of theprior year, and its working capital accounts except cash remainedconstant during the year. It earned $5 million in net income duringthe year but paid $700,000 in dividends to common shareholders.Throughout the year, the firm purchased $5.4 million of machinerythat was needed for a new project. You have just spoken to thefirm's accountants and learned that annual depreciation expense forthe year is $450,000; however, the purchase price for the machineryrepresents additions to property, plant, and equipment beforedepreciation. Finally, you have determined that the only financingdone by the firm was to issue long-term debt of $1 million at a 7%interest rate. The data has been collected in the Microsoft ExcelOnline file below. Open the spreadsheet and perform the requiredanalysis to answer the question below.
| Statement of cash flows | |||
| Cash at the Beginning of Year | $100,000.00 | ||
| Change in Net Operating Working Capital Except Cash | $0.00 | ||
| Net Income | $5,000,000.00 | ||
| Common Dividends | $700,000.00 | ||
| Machinery Equipment Purchases | $5,400,000.00 | ||
| Depreciation Expense | $450,000.00 | ||
| Long-Term Debt | $1,000,000.00 | ||
| Interest Rate on Long-Term Debt | 7.00% | ||
| Statement of Cash Flows | |||
| I. Operating Activities | Formulas | ||
| Net income | #N/A | ||
| Depreciation expense | #N/A | ||
| Change in net operating working capital exceptcash | $0.00 | ||
| Net cash provided by (used in) operations | #N/A | ||
| II. Long-Term Investing Activities | |||
| Additions to property, plant and equipment | #N/A | ||
| Net cash used in investing activities | #N/A | ||
| III. Financing Activities | |||
| Increase in long-term debt | #N/A | ||
| Payment of common dividends | #N/A | ||
| Net cash provided by financing activities | #N/A | ||
| IV. Summary | |||
| Net increase (decrease) in cash | #N/A | ||
| Cash at beginning of year | $100,000.00 | ||
| Cash at end of year | #N/A |
What was the firm's end-of-year cash balance? Recreate thefirm's cash flow statement to arrive at your answer. Write out youranswer completely. For example, 5 million should be entered as5,000,000. Round your answer to the nearest dollar, ifnecessary.
