上海对外贸易学院财管中加财务报表分析课后练习答案cha3 cha4.docx

1、上海对外贸易学院财管中加财务报表分析课后练习答案cha3 cha4Cha 3 5.La. (i) Statement of Cash Flows - Indirect Method Cash from operations: Net income $1,080 Add noncash expense: depreciation 600 Add/Subtract changes in working capital:Accounts receivable (150) Inventory (200) Accruals 80 Accounts payable 120 (150) $1,530 Cas

2、h from investing: Capital expenditures 1,150 Cash from financing: Short term borrowing 550 Long-term repayment (398) Dividends (432) $(280) Net change in cash $ 100 Worksheet for (Indirect Method) Cash Flow Statement IncomeBalance SheetCashStatement12/31/0012/31/01ChangeEffectNet income$1,080 $1,080

3、Depreciation 600 600Accounts receivable $1,500 $1,650 $150 (150)Inventory 2,000 2,200 200 (200)Accruals 800 880 80 80Accounts payable 1,200 1,320 120 120Depreciation (600) (600)Net fixed assets 6,500 7,050 550 (550) Capital expenditures$(1,150)Note payable 5,500 6,050 550 550 Short-term borrowing $

4、550Long-term debt 2,000 1,602 (398) (398) Long-term debt repayment $ (398)Net income (1,080) (1,080)Retained earnings 500 1,148 648 648 Dividends paid $ (432)_ 0 $ 100The worksheet to create the cash flow statement is presented above. Each balance sheet change (other than cash) is accounted for and

5、matched with its corresponding activity. As a last check, the net income and the add-backs of non-cash items are balanced and “closed” to their respective accounts (PP&E and retained earnings) providing the amounts of capital expenditures and dividends.a. (ii) Statement of Cash Flows - Direct Method

6、Cash from Operations: Cash collections $9,850 Cash payments for merchandise (6,080) Cash paid for SG&A (920) Cash paid for interest (600) Cash paid for taxes (720) $1,530Cash for Investing Activities:Capital expenditures (1,150) Cash for Financing Activities: Short-term borrowing 550Long-term debt r

7、epayment ( 398)Dividends ( 432) $( 280)Net Change in Cash $ 100The worksheet to create the cash flow statement is presented below. Each balance sheet change (other than cash) is accounted for and matched with its corresponding activity. Furthermore the operating account changes are matched to their

8、corresponding income statement item. As a last check, the net income is balanced and “closed” to retained earnings providing the amount of dividends.Note that there is no difference between the indirect and direct methods in the cash flow statement and in the worksheet for cash for investing and fin

9、ancing activities, Worksheet for (Direct Method) Cash Flow StatementIncomeBalance SheetCashStatement12/31/0012/31/01ChangeEffectSales$10,000$10,000Accounts receivable$ 1,500$ 1,650$ 150 (150) Cash Collections$ 9,850COGS (6,000) (6,000)Inventory 2,000 2,200 200 (200)Accounts payable 1,200 1,320 120 1

10、20Cash Paid for Merchandise$(6,080)SG&A expense (1,000) (1,000)Accruals 800 880 80 80 Cash Paid for SG&A$ (920)Interest expense (600) (600) Cash Paid for Interest$ (600)Taxes (720) (720) Cash Paid for Taxes$ (720)Depreciation (600) (600)Net fixed assets 6,500 7,050 550 (550)Capital Expenditures$(1,1

11、50)Note payable 5,500 6,050 550 550Short-term Borrowing$ 550Long-term debt 2,000 1,602 (398) (398) Long-term Debt Repaid$ (398)Net income (1,080) (1,080)Retained earnings 500 1,148 648 648 Dividends $ (432)_ _$ 0 $ 1006.La. Exhibit 3P-3 does not provide the (changes in the) individual components tha

12、t make up the changes in working capital. As such, to create the direct method cash flow statement, we must obtain the information directly from the balance sheet. This procedure does not necessarily yield the same cash flow components using the direct method as those provided by the company in its

13、indirect method calculations. Differences may arise when1. there are acquisitions/divestments2. there are foreign exchange adjustments3. the firm aggregates or classifies investing accruals together with operating ones.In this case, the differences are minimal as indicated below. (The calculations required for the direct method cash flow statement are presented in Exhibit 3S-1 along with the assumptions used to generate the statement)Direct Method Cash Flow Stat