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Strike441 [17]
3 years ago
6

Rousey, Inc., had a cash flow to creditors of $16,965 and a cash flow to stockholders of $7,559 over the past year. The company

also had net fixed assets of $49,705 at the beginning of the year and $57,130 at the end of the year. Additionally, the company had a depreciation expense of $12,252 and an operating cash flow of $51,136.
What was the change in net working capital during the year?
Business
1 answer:
PIT_PIT [208]3 years ago
7 0

Answer:

$6,935

Explanation:

Cash flow from assets:

= Cash flow to creditors + Cash flow to shareholders

= $16,965 + $7,559

= $24,524

Cash flow from financial assets = Operating cash flow - Net capital spending - Change in working capital

$24,524 = $51,136 - ($57,130 - $49,705 + $12,252) - Change in working capital

$24,524 = $51,136 - $19,677 - Change in working capital

$24,524 = $31,459 - Change in working capital

Change in working capital = $31,459 - $24,524

                                            = $6,935

Note:

Net capital spending = Net fixed assets at the end - Net fixed assets at the beginning + Depreciation expense

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