One Materials Ltd. paid $7,500 in dividends and $28,311 in interest over the past year while net working capital increased from $13,506 to $18,219. The company purchased $42,000 in net new fixed assets and had depreciation expenses of $16,805. During the year, the firm issued $25,000 in net new equity and paid off $11,000 in long-term debt. What is the amount of the cash flow from assets?
21811
To calculate the cash flow from assets, we need to consider the changes in working capital, purchase/sale of fixed assets, and financing activities. Here's how to calculate the cash flow from assets step-by-step:
1. Calculate the change in net working capital:
Change in Net Working Capital = Ending Net Working Capital - Beginning Net Working Capital
Change in Net Working Capital = $18,219 - $13,506
Change in Net Working Capital = $4,713
2. Calculate the cash flow from operating activities (CFO):
CFO = Dividends - Interest Expenses + Change in Net Working Capital
CFO = $7,500 - $28,311 + $4,713
3. Calculate the cash flow from investing activities (CFI):
CFI = Net Purchase of Fixed Assets - Depreciation Expenses
CFI = $42,000 - $16,805
4. Calculate the cash flow from financing activities (CFF):
CFF = Net New Equity - Net Debt Repayment
CFF = $25,000 - $11,000
5. Calculate the cash flow from assets (CFA):
CFA = CFO + CFI + CFF
Now, let's plug in the values:
CFO = $7,500 - $28,311 + $4,713
CFO = -$16,098
CFI = $42,000 - $16,805
CFI = $25,195
CFF = $25,000 - $11,000
CFF = $14,000
CFA = CFO + CFI + CFF
CFA = -$16,098 + $25,195 + $14,000
Therefore, the cash flow from assets is $23,097.