SOLVED

Cardinal Industries had the following operating results for2018: Sales = $34,116; Cost of goods sold = $24,114; Depreciationexpense = $5,977; Interest expense = $2,700; Dividends paid =$1,978. At the beginning of the year, net fixed assets were$19,920, current assets were $7,040, and current liabilities were$3,980. At the end of the year, net fixed assets were $24,484,current assets were $8,672, and current liabilities were $4,655.The tax rate for 2018 was 25 percent. a. What is net income for2018? (Do not round intermediate calculations.) b. What is theoperating cash flow for 2018? (Do not round intermediatecalculations.) c. What is the cash flow from assets for 2018? (Donot round intermediate calculations. A negative answer should beindicated by a minus sign.) d-1. If no new debt was issued duringthe year, what is the cash flow to creditors? (Do not roundintermediate calculations.) d-2. If no new debt was issued duringthe year, what is the cash flow to stockholders? (Do not roundintermediate calculations. A negative answer should be indicated bya minus sign.

ANSWERED -

Ebit 4025

Ebt 1325

Tax 1325*.25 331.25

a. Net inc 993.75

Ebit 1325 + depr 5977 - tax 331.25

b. 9670.75 ocf

Change nwc = End nwc (end current assets 8672 - end currentliabilities 4655) - beg nwc (beg assets 7040 - beg liabilities3980)

Change Nwc= 957

Net cap spend = end fixed asset 24484 + depr 5977 - beg fixedasset 19920

Net cap spend = 10541

Cash flow assets = ocf 9670.75 - change nwc 957 - net cap spend10541

C. -1827.25

Cash flow cred = interest exp 2700 - 0 net new debt

D1 2700

Cash flow stockh = cash flow assets -1827.25 - cash flow cred2700

D2 -4527.25