1. Building a Balance Sheet. Kroeger, Inc., has current assets of $1,970, net fixed assets of $9,650, current liabilities of $1,520, and long-term debt of $4,370. What is the value of the shareholders' equity account for this firm? How much is net working capital?
2. Building an Income Statement. Draiman, Inc., has sales of $795,000, costs of $345,000, depreciation expense of $76,000, interest expense of $41,000, and a tax rate of 35 percent. What is the net income for this firm?
3. Dividends and Retained Earnings. Suppose the firm in Problem 2 paid out $56,000 in cash dividends. What is the addition to retained earnings?
4. Per-Share Earnings and Dividends. Suppose the firm in Problem 3 had 60,000 shares of common stock outstanding. What is the earnings per share, or EPS, figure? What is the dividends per share figure?
5. Market Values and Book Values. Klingon Widgets, Inc., purchased new cloaking machinery three years ago for $8 million. The machinery can be sold to the Romulans today for $6.7 million. Klingon's current balance sheet shows net fixed assets of $3.1 million, current liabilities of $790,000, and net working capital of $145,000. If all the current assets were liquidated today, the company would receive $865,000 cash. What is the book value of Klingon's total assets today? What is the market value?
6. Calculating Taxes. The SGS Co. had $215,000 in taxable income. Using the rates from Table 2.3 in the chapter, calculate the company's income taxes.
7. Tax Rates. In Problem 6, what is the average tax rate? What is the marginal tax rate?
8. Calculating OCF. Hammett, Inc., has sales of $34,630, costs of $10,340, depreciation expense of $2,520, and interest expense of $1,750. If the tax rate is 35 percent, what is the operating cash flow, or OCF?
9. Calculating Net Capital Spending. Rotweiler Obedience School's December 31, 2013, balance sheet showed net fixed assets of $1,635,000, and the December 31, 2014, balance sheet showed net fixed assets of $1,976,000. The company's 2014 income statement showed a depreciation expense of $305,000. What was Rotweiler's net capital spending for 2014?
10. Calculating Additions to NWC. The December 31, 2013, balance sheet of Maria's Tennis Shop, Inc., showed current assets of $1,045 and current liabilities of $960. The December 31, 2014, balance sheet showed current assets of $1,310 and current liabilities of $1,090. What was the company's 2014 change in net working capital, or NWC?
11. Cash Flow to Creditors. The December 31, 2013, balance sheet of Schism, Inc., showed long-term debt of $1,280,000, and the December 31, 2014, balance sheet showed long-term debt of $1,410,000. The 2014 income statement showed an interest expense of $93,400. What was the firm's cash flow to creditors during 2014?
12. Cash Flow to Stockholders. The December 31, 2013, balance sheet of Schism, Inc., showed $120,000 in the common stock account and $2,120,000 in the additional paid-in surplus account. The December 31, 2014, balance sheet showed $135,000 and $2,380,000 in the same two accounts, respectively. If the company paid out $135,000 in cash dividends during 2014, what was the cash flow to stockholders for the year?
13. Calculating Cash Flows. Given the information for Schism, Inc., in Problems 11 and 12, suppose you also know that the firm's net capital spending for 2014 was $640,000, and that the firm reduced its net working capital investment by $105,000. What was the firm's 2014 operating cash flow, or OCF?
14. Calculating Cash Flows. Weiland Co. shows the following information on its 2014 income statement: sales = $167,000; costs = $88,600; other expenses = $4,900; depreciation expense = $11,600; interest expense = $8,700; taxes = $18,620; dividends = $9,700. In addition, you're told that the firm issued $2,900 in new equity during 2014, and redeemed $4,000 in outstanding long-term debt.
a) What is the 2014 operating cash flow?
b) What is the 2014 cash flow to creditors?
c) What is the 2014 cash flow to stockholders?
d) If net fixed assets increased by $23,140 during the year, what was the addition to NWC?