Calculating the Cash Flow from Investing Activities
A beer company employs 35 people and has a rented office in Seattle, costing $3,200 monthly. The company’s beer sales price varies according to the sales channel, between 2.03 $ – 3.12 $ per gallon. Raw material costs are 0.86 $ per gallon.
The financial year is 1.1.2018 – 31.1.2018. At the beginning of the financial year, the company has 200,000 gallons of raw material in stock. It can be assumed that 1 gallon of raw material can produce 1 gallon of beer. In the finished goods warehouse, 150,000 gallons of beer are expected to be sold. The opening balance sheet for the financial year (1.1.2018) looks like this:
Assets (per thousand $)
Fixed assets 15000
Raw material storage 172
Ready warehouse 129
Trade receivables 248
Cash and Bank Receivables 130
Liabilities (per thousand $)
Share capital 9693
Accumulated result 0
Profit for the financial year 0
Long-term loans 5100
Loans due 800
Trade payables 86
The company buys 9,900,000 gallons of raw material at a price of 0.86 $ per gallon and will produce a total of 10,000,000 gallons of beer and will succeed in selling 9,800,000 gallons of beef sat $ 2.48 per gallon during the year. Other operating costs total $ 114.4 million, of which the company’s personnel costs are $ 4,576,000 and marketing costs are $ 2,288,000. At the end of the financial year, the company has trade receivables of $243040 and trade payables of $ 101480.
The company will repay the maturing loans at the end of the financial year and getting a new $ 650,000 loan. The loan maturing in the next financial year totals $ 600,000. Financiers charge an average interest rate of 5% on the loan principal. The interest rate level also corresponds to the expected return on debt, while the expected return on equity is 12%.
Depreciation for the financial year is $ 750,000 and the company will invest $ 1,200,000 in new production equipment during the financial year. During the financial year, company pays dividends of $ 1,960,668 to its owners. The share capital does not change during the financial year. Prices do not include VAT. Corporate tax is 20%.
Calculate the cash flow from investing activities of the company for the financial year.
Calculate the change in working capital during the financial year.
Calculate the company’s cash flow from operating activities for the fiscal year.
Calculate financing cash flow for the financial year.
Calculate the change in cash and cash equivalents during the financial year.
Calculate the change in financial assets during the financial year.
Calculate the balance sheet total.
Calculate the Current ratio from the closing balance sheet.
Calculate the Quick ratio, which describes liquidity, from the closing balance sheet.
Calculate the gearing ratio from the closing balance sheet.