Thompson's Jet Skis has operating cash flow of $218. Depreciation is $45 and interest paid is $35. A net total of $69 was paid on long-term debt. The firm spent $180 on fixed assets and increased net working capital by $38. What is the amount of the cash flow to stockholders?
A) -$104
B) -$28
C) $28
D) $114
E) $142

Question

Quizplus · Accepted Answer

The cash flow to stockholders is calculated as the operating cash flow minus the capital expenditures, plus the net change in debt, plus the net change in working capital. In this case, the operating cash flow is $218, the capital expenditures are $180, the net change in debt is -$69, and the net change in working capital is $38. Therefore, the cash flow to stockholders is $218 - $180 - $69 + $38 = -$104.

Thompson's Jet Skis Has Operating Cash Flow of $218