Analisis De Etados Financieros
Enviado por marindeliza • 6 de Mayo de 2014 • 247 Palabras (1 Páginas) • 207 Visitas
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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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