FIN 3312 TXST EXAM WITH CORRECT ANSWERS 2024

Formula sheet correct answers Balance Sheet Identity Total Assets = Total Liabilities + Stockholders' Equity Net Working Capital (NWC) = Current Assets - Current Liabilities Financial Cash Flow Identity CF from Assets = CF to Creditors + CF to Stockholders Financial Cash Flow is also defined as OCF - Capital Spending - Additions to NWC Operating Cash Flow (OCF) EBIT + Depreciation & Amortization - Taxes Capital Spending (CapEx) (Ending net Fixed Assets - Beginning net Fixed Assets) + Depreciation Additions to NWC Most Recent Year's NWC minus Previous Year's NWC Each Year's NWC equals (Current Assets minus Current Liabilities) Note: All calculations will be as per the book formulas so if you follow those the positive versus negative issue is as defined in the book. Keep in mind, for example, if the firm acquires more new assets then it sells, this means the firm "spent" money (used cash) for this component of its cash flow calculation. Cash Flow to Creditors Interest Paid minus Net New Borrowing Net New Borrowing (Ending Long-Term Debt) minus (Beginning Long-term Debt) Cash Flow to Stockholders Dividends Paid minus Net New Equity Net New Equity (Ending Common Stock) minus (Beginning Common Stock) Remember the change in retained earnings is not part of calculating Net New Equity!