4. What is the cash flow from assets for 2011?

Finance Basics

Galaxy Interiors 2011 Income Statement (5 in millions)
Net sales	Suits
Cost of goods sold	16,408
Deprecation	1,611
Earnings before interest and taxes	3,396
Interest paid	1,282
Taxable Income	$2,114
Less: Taxes	740
Net income	$1,374

Galaxy Interiors 2010 and 2011 Balance Sheets ($ in millions)
	2010	2011		2010	2011
Cash	$668	$297	Accounts payable	$1,694	1,572
Accounts receivable	1,611	1,527	Notes payable	2,500	0
Inventory	3,848	2,947	Total	$4,194	$1,532
Total	$6,127	$4,771.00	Long-term debt	9,800	10,650
Net fixed asses	17,489	17,107	Common stock	7,500	7,000
			Retained earnings	2,122	2,696
Total assets	$23,616	$21,878	Total liab. & equity	$23,616	$21,878

1. What is the operating cash flow for 2011? OCF in 2011 = EBIT + DEPRECIATION – TAX

2. What is the amount of net capital spending for 2011? Net capital spending = Fixed asset in 2011 – Fixed asset in 2010 + Depreciation in 2011

3. What is the net investment on working capital in 2011 (Change in net working capital)?

Change in NWC = NWC in 2011 – NWC in 2010 = (CA in 2011 – CL in 2011) – ( CA in 2010 – CL in 2010)

1. What is the cash flow from assets for 2011?

Cash flow from assets = OCF – Net capital spending – Change in NWC

1. What is the cash flow to creditors in 2011?

Cash flow to creditors = interest expense in 2011 – (long term debt in 2011 – long term debt in 2010)

1. What is the cash flow to stockholders in 2011? cash flow to stockholders = cash flow from asset – cash flows to creditors

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