Question

Green Co. paid $28,400 in dividends and $29,571 in interest over the past year. During the year, net working capital increased from $13,986 to $18,719. The company purchased $44,200 in fixed assets and had a depreciation expense of $17,705. During the year, the company issued $25,500 in new equity and paid off $21,700 in long-term debt. What was the company's cash flow from assets

Answer 1

If Green Co. paid $28,400 in dividends and $29,571 in interest over the past year. During the year, net working capital increased from $13,986 to $18,719.  During the year, the company issued $25,500 in new equity and paid off $21,700 in long-term debt. What the company's cash flow from assets will be is: $48,371

First step is to calculate the cash flow to creditor  

Cash flow to creditors   = $21,700 + $29,571  

Cash flow to creditors   = $51,271

 

Second step is to calculate the cash flow to Stockholders

Cash flow to Stockholders =$28,400 - $25,500  

Cash flow to Stockholders =$2,900

Now let determine the cash flow from assets using this formula

Cash flow from assets = Cash flow to creditors + Cash flow to stockholders

Let plug in the formula  

Cash flow from assets = $51,271 + $2,900  

Cash flow from assets = $48,371

Inconclusion if Green Co. paid $28,400 in dividends and $29,571 in interest over the past year. During the year, net working capital increased from $13,986 to $18,719.  During the year, the company issued $25,500 in new equity and paid off $21,700 in long-term debt. What the company's cash flow from assets will be is: $48,371

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