The Big Apple, Inc., has compiled the following information on its 2008 income statement: sales = $961,800; costs = $328,400; other expenses = $72,800; depreciation = $50,200; interest paid = $82,500; taxes = $51,900; dividends = $117,000. The firm also redeemed $64,600 in outstanding long-term debt and issued $87,700 in new equity. Compute the following:
a. Operating cash flow
b. Cash flow to creditors
c. Cash flow to stockholders
d. Cash flow from assets
e. Can a company have a negative net income and a positive operating cash flow? Whatcould cause that?
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SOLUTION
PREVIEW
To find the OCF, we first calculate net income.
Income Statement
Sales $961,800
Costs 328,400
Depreciation 50,200
Other expenses 72,800
