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ABC Company's current financial information

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Question;Current company cash flowa. You need to complete a cash flow statement for the company using the direct method.b. Once you?ve completed the cash flow statement, answer the following questions:i. What does this statement of cash flow tell you about the sources and uses of the company funds?ii. Is there anything ABC Company can do to improve the cash flow?iii. Can this project be financed with current cash flow from the company? Why or why not?iv. If the company needs additional financing beyond what ABC Company can provide internally (either now or sometime throughout the life of the project), how would you suggest the company obtain the additional financing, equity or corporate debt, and why?ABC Company's current financial information (before/without expansion)Dec. 31,20X2 Dec. 31,20X1Cash $50,000 $70,000Accounts receivable (net) $120,000 $180,000Merchandise inventory $350,000 $280,000Property plant, & equipment $400,000 $300,000Less: Accumulated depreciation $(170,000) $(100,000)Total assets $750,000 $730,000Accounts payable $250,000 $210,000Income taxes payable $40,000 $10,000Common stock $240,000 $240,000Retained earnings $220,000 $270,000Total liabilities & stock, equity $750,000 $730,000The firm's accrual-basis income statement revealed the following data:Sales $1,200,000Cost of goods sold $800,000selling and administrative expenses $250,000Depreciation expense $70,000Income taxes $30,000Dividends declared and paid during 19X2 $100,000ABC purchased $100,000 of equipment for cash on August 14.(There was no interest expense.)

 

Paper#45357 | Written in 18-Jul-2015

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