# Operations Cash Flows

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2015-05-26 02:34

## Additions to Net working capital

Question | Answer |
---|---|

Operating cash flows | Cash flows from the firm's producing and selling products on a day-to-day basis. |

Net capital spending | Net spending on fixed assets. |

Operating Cash Flow is calculated from | Income statement. |

Net capital spending is calculated from | Both the balance sheet and the income statement. |

Net new borrowing | naww |

Future Value | Compounding or growth over time (WHAT IS THE VALUE OF $1 TODAY IN THE FUTURE? |

Question | Answer |
---|---|

Present Value | discounting to today’s value (WHAT IS THE VALUE TODAY OF $1 IN THE FUTURE?) |

FV | PV((1 + k)^N) |

PV | FV/((1 + k)^N) |

Operating Cash Flow formula | EBIT + depreciation - taxes |

Net capital spending formula | Ending net fixed assets - beginning net fixed assets + depreciation. |

Net new borrowing formula | Ending LTD - Beginning LTD |

Cash flow to stockholders formula | Dividends paid - net new equity raised. |

Question | Answer |
---|---|

Net new equity raised formula | Ending common stock and paid surplus - Beginning common stock and paid surplus. |

Additions to NWC formula | Ending NWC - Beginning NWC |

Cash Flow to Creditors formula | Interest paid - Net new borrowing. |

Cash flow from assets (summation) | Cash flow to creditors + cash flow to stockholders. |

Cash flow from assets (differential) | Operating cash flows - net capital spending - additions to net working capital |

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