Question

For this question, use the Grove Analytics Financials. Calculate 2018 cash from financing activities for Grove Analytics. Hint: Remember to capture dividends. Also, remember that stock based compensation expense is a credit to common stock & APIC.
Below is income statement and balance sheet data for Grove Analytics. ($ in millions) Income statement 12/31/2018 Revenue 230 Operating expenses 68 Depreciation 20 Stock based compensation 13 Operating profit 129 Interest expense 5 Taxes 31 Net income 93 Balance sheet 12/31/2017 12/31/2018 Cash 50 Not provided Accounts receivable 20 25 Inventory 15 18 PP&E 30 40 Total assets 115 83 Accounts payable 8 11 Short term debt 20 22 Long term debt 48 60 Treasury stock (30) (40) Common stock & APIC 25 40 Retained earnings 44 95 Total liabilities & equity 115 188

Answer 1

Answer: -36

Explanation:

The 2018 cash from financing activities for Grove Analytics will be calculated as:

Issued short term debt = 22 - 20 = 2

Add: Issued long term debt = 60 - 48 = 12

Less: Purchase of treasury stock = 10

Add: Issue of common stock = (40 - 13 - 25) = 2

Less: Dividend paid = (44 + 93 - 95) = 42

Net cash used by financing activities = -36