FNAN 300 Chapter 2 connect
The balance sheet of a firm shows beginning net fixed assets of $348,200 and ending net fixed assets of $371,920. The depreciation expense for the year is $46,080 and the interest expense is $11,460. What is the amount of the net capital spending?
$69,800
Which of the following are components of cash flow from assets?
operating cash flow, capital spending, change in net working capital
Physical assets are termed ____________ assets.
tangible
A positive operating cash flow indicates that the firm is generating enough cash to:
pay operating costs.
On a balance sheet, total assets must always equal total liabilities plus:
shareholders' equity
Suzette's Market had long-term debt of $638,100 at the beginning of the year compared to $574,600 at year-end. If the interest expense was $42,300, what was the firm's cash flow to creditors?
$105,800
Wes Motors has total assets of $98,300, net working capital of $11,300, owners' equity of $41,600, and long-term debt of $38,600. What is the value of the current assets?
$29,400
Andersen's Nursery has sales of $318,400, costs of $199,400, depreciation expense of $28,600, interest expense of $1,100, and a tax rate of 35 percent. The firm paid out $23,400 in dividends. What is the addition to retained earnings?
$34,645
Gino's Winery has net working capital of $29,800, net fixed assets of $64,800, current liabilities of $34,700, and long-term debt of $23,000. What is the value of the owners' equity?
$71,600
Marcie's has sales of $179,600,depreciation of $14,900, costs of goods sold of $138,200, and other costs of $28,400. The tax rate is 35 percent. What is the net income?
-$1,235
Rank the ease (from easiest to hardest) of turning the following assets into cash.
1. Cash equivalents 2.accounts receivable 3. Inventory 4. plant and equipment
Current assets are defined as assets that can be turned into cash within _______months.
12
Neiger Flours owes $16,929 in taxes on taxable income of $61,509. If the firm earns $100 more in income, it will owe an additional $48 in taxes. What is the average tax rate on income of $61,609?
27.56 percent
A customer has yet to pay the bill for products purchased from Firm A on credit. This customer's trade credit is recorded in which of Firm A's balance sheet accounts?
Accounts Receivable
What is the balance sheet equation?
Assets equal liabilities plus stockholders' equity
What does GAAP stand for?
Generally accepted accounting principles
Who is entitled to the residual value of a firm's cash flows?
Shareholders
True or False: Operating cash flow does not include depreciation or interest.
True
True or false: Free cash flow is very similar to cash flow from assets.
True
A balance sheet reflects a firm's
accounting value on a specific date.
Net working capital will be negative when current assets _____ current liabilities.
are less than
Liquidity refers to the ease of changing__________.
assets to cash
________is an intangible fixed asset
copyright
Assets can be categorized as
current and fixed assets tangible and intangible assets
Net working capital equals __________.
current assets minus current liabilities.
The more debt a firm has, the greater its:
degree of financial leverage
Net capital spending is equal to the change in new fixed assets plus:
depreciation
Under GAAP, assets are generally carried on a firm's balance sheet at _______.
historical cost, and book value
Cash flow to creditors equals
interest paid minus net new borrowing
The prize at which willing buyers and sellers would trade is called _____value.
market
The balance sheet identity shows that stockholders' equity equals assets _______liabilitities
minus
Shareholders' equity is best defined as
the residual value of a firm
Free cash flow is better described as _______.
total distributable cash flow