Chapter 2
Cash Flows at Warf Computer, Inc.
Input area:
Balance Sheet (in $ thousand
2015 2014
Current assets
Cash and equivalents $ 452 $ 391
Accounts receivable 716 668
Inventories 641 663
Other 92 78
Total current assets $ 1,901 $ 1,800
Fixed assets
Property, plant, and equipment $ 4,148 $ 3,179
Less accumulated depreciation 1,340 1,092
Net property, plant, and equipment $ 2,808 $ 2,087
Intangible assets and others 793 709
Total fixed assets $ 3,601 $ 2,796
Total assets $ 5,502 $ 4,596
Acquisition of fixed assets $ 1,482
Sale of fixed assets $ 429
New debt issued $ 228
Debt retired $ 197
New stock issued $ 15
Stock repurchased $ 66
Income Statement (in $ thousands)
Sales $ 7,557
Cost of goods sold 4,456
Selling, general, and administrative 848
Depreciation 248
Operating income $ 2,005
Other income 75
EBIT $ 2,080
Interest expense 137
Pretax income $ 1,943
Taxes 776
Current $ 605
Deferred $ 171
Net income $ 1,167
Dividends $ 292
Retained earnings $ 875
Output area:
Operating cash flow
Earnings before interest and taxes $ 2,080
Depreciation 248
-Current taxes 605
Operating cash flow $ 1,723
Net capital spending
Acquisition of fixed assets $ 1,482
Sale of fixed assets (429)
Capital spending $ 1,053
Alternatively,
Ending fixed assets $ 3,601
-Beginning fixed assets 2,796
Depreciation 248
Capital spending $ 1,053
Net working capital cash flow
Ending NWC $ 1,135
Beginning NWC 914
NWC cash flow $ 221
Cash flow from assets
OCF $ 1,723
-Net capital spending 1,053
-Change in NWC 221
Cash flow from assets $ 449
Cash flow to creditors
Interest $ 137
Retirement of debt 197
Debt service $ 334
Proceeds from sale of long-term debt (228)
Total $ 106
Alternatively
Beginning long-term debt $ 1,148
Ending long-term debt (1,179)
Interest 137
Total $ 106
Cash flow to stockholders
Dividends $ 292
Repurchase of stock 66
Cash to stockholders $ 358
Proceeds from new stock issue (15)
Total $ 343
Alternatively
Beginning total equity $ 2,403
Ending total equity (3,227)
Dividends 292
Retained earnings 875
$ 343
Statement of cash flows
Operations
Net income $ 1,167
Depreciation 248
Deferred taxes 171
Changes in assets and liabilities
Accounts receivable (48)
Inventories 22
Accounts payable 34
Accrued expenses (154)
Other (14)
Total cash flow from operations $ 1,426
Investing activties
Acquisition of fixed assets $ (1,482)
Sale of fixed assets 429
Total cash flow from investing activities $ (1,053)
Financing activties
Retirement of debt $ (197)
Proceeds of long-term debt 228
Dividends (292)
Repurchase of stock (66)
Proceeds from new stock issues 15
Total cash flow from financing activities $ (312)
Change in cash (on balance sheet) $ 61
Sheet (in $ thousands)
2015 2014
Current liabilities
Accounts payable $ 519 $ 485
Accrued expenses 247 401
Total current liabilities $ 766 $ 886
Long-term liabilities
Deferred taxes $ 330 $ 159
Long-term debt 1,179 1,148
Total long-term liabilities $ 1,509 $ 1,307
Stockholders equity
Preferred stock $ 21 $ 21
Common stock 126 126
Capital surplus 794 779
Accumulated retained earnings 2,478 1,603
Less treasury stock 192 126
Total equity $ 3,227 $ 2,403
Total liabilities and
shareholders equity $ 5,502 $ 4,596
