ITTIHAD UNIVERSITY, COLLEGE OF MANAGEMENT AND INFORMATION SYSTEMS

Student Name: Zubaidah Abdul Rehman Al Din, 20042080Course: Business Finance

Answer Question 5):

Section 1):

Taco Swell Inc.Balance sheet as of 2006

Assets Amount Liabilities AmountCash 2528 Accounts payable 2656Accounts receivables 3347 Short-term notes payable 488Inventory 5951 Long-term debt 8467Net fixed assets 21203 Equity (TA – TL) 21418Total Assets 33029 33029

Taco Swell Inc.Balance sheet as of 2007

Assets Amount Liabilities AmountCash 2694 Accounts payable 2683Accounts receivables 3928 Short-term notes payable 478Inventory 6370 Long-term debt 10290Net fixed assets 22614 Equity (TA – TL) 22155Total Assets 35606 35606

Income Statement 2007

1) Sales 5390

2) Cost of goods 1961

3) Depreciation 723

4) Other expenses 343

5) Interest 386

6) Earnings before interest and taxes 2363 (Item 1 to 5 minus)

7) Taxable Income 1977

8) Taxes 672.18 (Item 7 * 34%)

9) Net income 1304.82 (Item 7-8)

10) Dividends 674

11) Addition to retained earnings 630.82 (Item 9-10)

Taco Sawell Inc. Finance Exercise Page 1 of 2

ITTIHAD UNIVERSITY, COLLEGE OF MANAGEMENT AND INFORMATION SYSTEMS

Student Name: Zubaidah Abdul Rehman Al Din, 20042080Course: Business Finance

Section 2):

Cash flow from assets

1) Operating cash flow= 2363 + 723 – 672.18= 2412.82

2) Capital spending= 22614 – 21203 + 723= 2134

3) Change in net working capital= 12992 – 3161 = 9831

Cash 2694 Accounts payable 2683Accounts receivables 3928 Short-term notes payable 478Inventory 6370 3161

12992

= 11826 – 3144 = 8682Cash 2528 Accounts payable 2656Accounts receivables 3347 Short-term notes payable 488Inventory 5951

11826 3144

= 9831 - 8682= 1149

FINAL Cash flow from assets= 2412.82 – 2134 - 1149= -870.18

Cash flow from creditors= 386 - 1823= -1437

Cash flow from stockholders= 674 - 737= -63

Cash flow from assets Cash flow from creditors Cash flow from stockholders

Taco Sawell Inc. Finance Exercise Page 2 of 2