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Analisis De Etados Financieros


Enviado por   •  6 de Mayo de 2014  •  247 Palabras (1 Páginas)  •  205 Visitas

WYATT CORPORATION

Statement of Cash Flows

For the Year Ended December 31, Year 10

Cash flows from operating activities

Net income * $186,000

Add (deduct) adjustments to cash basis

Depreciation expense 246,000

Gain on sale of equipment ** (4,000)

Increase in accounts receivable (111,000)

Increase in inventories (218,000)

Increase in accounts payable 103,000

Decrease in income taxes payable (25,000)

Increase in other payables 92,000

Net cash flow from operating activities $269,000

Cash flows from investing activities

Proceeds from sale of equipment 34,000

Additions to plant and equipment (212,000)

Net cash used by investing activities (178,000)

Cash flows from financing activities

Issuance of stock 17,000

Dividends (74,000)

Reduction of debt (17,000)

Net cash provided by financing activities (74,000)

Net increase in cash $ 17,000

Cash balance, December 31, Year 9 175,000

Cash balance, December 31, Year 10 $192,000

• Notes:

* Determination of Year 10 net income:

Retained earnings, 12/31/Year 10 $1,638,000

Retained earnings, 12/31/Year 9 (1,526,000)

112,000

Plus: Dividends paid 74,000

Year 10 net income $ 186,000

**Derivation of gain on sale of equipment:

Accumulated depreciation, 12/31/Year 9 $ 916,000

Depreciation expense 246,000

$1,162,000

Accumulated depreciation, 12/31/Year 10 (1,131,000)

Accumulated depreciation on equipment sold $ 31,000

Original Cost $ 61,000

Accumulated depreciation on equipment sold (31,000)

Basis of equipment $ 30,000

Proceeds from sale 34,000

Gain on sale $ 4,000

• b. In Year 10, Wyatt Corporation generated cash from operations of $269,000 after considering operating working capital needs. Subtracting projected debt service of $300,000 per year and estimated capital spending of $325,000 per year from that figure leaves a decidedly negative number. That is, there is not sufficient cash to fund both the debt service and the expansion project for any extended period of time. Therefore, the leveraged buyout and the capital spending plan are mutually not compatible goals—at least not as currently proposed. Wyatt cannot do both. Moreover, it probably should not do either one if it wishes to maintain a reasonable margin of safety.

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