Preview

Case Analysis

Satisfactory Essays
Open Document
Open Document
428 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Case Analysis
PROBLEM The Warf Computers, Inc, founded by Nick Warf, has developed a virtual keyboard that has been considered a full generation above and beyond the current offerings in the market. There is a significant investment that needs to be made to introduce this concept to the market. The investors that would consider the venture would require financial analysis done. The analysis will entail preparation of cash flows as well as the statements of those cash flows. Included in the analysis is the description of the cash flows for the company, the cash flow that indicates a precise description, and an idea of the expansion plans that may take place.
WARF COMPUTERS CASH FLOWS Angus Jones & Partners, LLC, requested statement of cash flows and the accounting statement of cash flows.
The operating cash flow for the company is: (All numbers are in thousands of dollars)
Operating Cash Flow (OCF) = Earnings Before Interest and Taxes (EBIT)+ Depreciation –Current Taxes
OCF= $1,332 + 159 – 386
OCF = $1,105
Before determining the cash flow from assets, the capital spending and change in net working capital must be determined. In order to determine the capital spending for the year one would follow the formula below. | Capital spending | | | Ending net fixed assets | $2,280 | | – Beginning net fixed assets | 1,792 | | + Depreciation | 159 | | Net capital spending | $ 647 | And the change in net working capital was: | Change in net working capital | | Ending NWC | $728 | | – Beginning NWC | 586 | | Change in NWC | $142 | So, the cash flow from assets was: | Cash flow from assets | | | Operating cash flow | $1,105 | | – Net capital spending | 647 | | – Change in NWC | 142 | | Cash flow from assets | $316 | The cash flow to creditors was: | Cash flow to creditors | | | Interest paid | $95 | | – Net New Borrowing | 20 | | Cash flow to Creditors
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Satisfactory Essays

    Berrys Bug Blaster
    • 261 Words
    • 2 Pages

    Berrys Bug Blaster

    Income Statement 1/1/2008 - 12/31/2008 | Revenue | | | $3,249,580.53 | | Direct Expenses | | | | Salaries & Wages | $487,437.08 | | | Vehicle Maintenance | $64,991.61 | | | Fuel | $20,449.80 | | |…

    • 261 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    Kaplan Ha520 Week 3 Assignment
    • 358 Words
    • 2 Pages

    Kaplan Ha520 Week 3 Assignment

    b. Net Income is $2.5M as shown in part a. The Total Profit Margin is Net Income ($2.5M)/ total revenues ($12M) = Total Margin of 0.208 (20.8%). The cash flow is the net income plus the depreciation costs, thus $1.5M (Depreciation Expense) + $2.5M (Net Income) = Cash Flow of $4.0M.…

    • 358 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    xacc 291 week 7
    • 391 Words
    • 2 Pages

    xacc 291 week 7

    The term cash flows refer to the receipts and payment of cash. A financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents is known as a statement of cash flow. Similar to an income statement, a cash flow statement records a company’s performance over a period of time. Consistently, companies will disclose the cash arising are generally required to prepare a statement of cash flow in their annual reports because it contains vital information for lenders and investors who primarily make informed and economic decisions about the companies. Generally during a company’s accounting period their cash flow is categorized and divided into three sections which are: cash flow from operations, financing and investing. The primary reasons these transactions are catergorized and divided is so investors will understand what the transactions are related to and how each section paints a vivid picture of how the company is doing from both a cash standpoint and overall health. The statement of cash flow is very important for companies that are required to prepare and present their financial statement in accordance to with international accounting standards and international financial reporting standards.…

    • 391 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    ACC 300 Week 4 Learning Team Assignment Managerial and Financial Accounting Paper
    • 426 Words
    • 3 Pages

    ACC 300 Week 4 Learning Team Assignment Managerial and Financial Accounting Paper

    Prepare the statement of cash flows using the indirect method. The only noncash items are depreciation and the gain on sale from investments.…

    • 426 Words
    • 3 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Menotomy 2
    • 1058 Words
    • 4 Pages

    Menotomy 2

    The reconciliation of the information on the Cash Flow Worksheet with the Financial Statements shows that…

    • 1058 Words
    • 4 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Case Analysis
    • 251 Words
    • 2 Pages

    Case Analysis

    Derreck Fryar has great work ethic and he is really dedicated to his work. He only missed two team meetings and one missing is because he attended the new employee orientation. He is willing to work late to solve problems with his teammates anytime. An example is that he works hard to solve an emergency damage control for our important client.…

    • 251 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    Case Analysis
    • 474 Words
    • 2 Pages

    Case Analysis

    Jim Donovan has recently accepted a new position as president for the company Famous Products. He has been asked to fly in to Milwaukee to take a look at the facilities and meet with the former president Don Bird. Jim is so excited and confident about his new position that he doesn’t think twice about his meeting with Bird. Upon his arrival Bird welcomed Jim to the building then brought him into a huge conference room where a bunch of other men in business suits sat. Bird made it openly clear he was not pleased that Jim would be taking over in front of everyone; this was obviously a huge shock to Jim. Jim was not prepared at all for Bird to react this way, we will discuss the mistakes Jim made before he got to the appointment, Jim’s reactions and what he should do during and after the meeting.…

    • 474 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Better Essays

    Case Analysis
    • 3109 Words
    • 13 Pages

    Case Analysis

    Schmidt, a South Carolina citizen, sued Wachovia Bank in a South Carolina state court for fraudulently inducing him to participate in an illegal tax shelter. Wachovia is a national bank with its main office in North Carolina and branch offices in several other states, including South Carolina. Under federal diversity jurisdiction, federal courts can hear cases in which the parties are citizens of different states. Wachovia filed a petition in Federal District Court, seeking to compel arbitration of the dispute. After the petition was denied on the merits, Wachovia appealed to the Fourth Circuit Court of Appeals, which dismissed the case for lack of jurisdiction. Under 28 U.S.C. Section 1348, national banks are "deemed citizens of the States in which they are respectively located." The Circuit Court interpreted "located" to mean any state where the bank has a branch location. Noting that the statute uses both "located" and "established" to refer to the presence of a bank, the Circuit Court determined that a national bank is "established" in the state where its main office is located, and "located" in every state where it has a branch office. Therefore, under the Fourth Circuit's reasoning, Wachovia was "located" in, and a citizen of, South Carolina (as well as several other states with branch offices). Since both parties, Schmidt and Wachovia, had South Carolina citizenship, the Circuit Court dismissed the case for lack of diversity jurisdiction.…

    • 3109 Words
    • 13 Pages
    Better Essays
    Read More
  • Satisfactory Essays

    Abc Company
    • 706 Words
    • 3 Pages

    Abc Company

    1. What does this statement of cash flow tell you about the sources and uses of the company?…

    • 706 Words
    • 3 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    A Manufacturing Company Is Thinking of Launching a New Product. the Company Expects to Sell $950,000 of the New Product in the First Year and $1,500,000 Each Year Thereafter. Direct Costs Including Labor and Materials
    • 474 Words
    • 2 Pages

    A Manufacturing Company Is Thinking of Launching a New Product. the Company Expects to Sell $950,000 of the New Product in the First Year and $1,500,000 Each Year Thereafter. Direct Costs Including Labor and Materials

    Project Statement Year | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | Sales | | 950,000 | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 | Direct Cost55% of sales(Sales * 55% = DC) | | 522,500 | 825,000 | 825,000 | 825,000 | 825,000 | 825,000 | 825,000 | 825,000 | Indirect Incremental Costs | | 80,000 | 80,000 | 80,000 | 80,000 | 80,000 | 80,000 | 80,000 | 80,000 |…

    • 474 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    case analysis
    • 1397 Words
    • 6 Pages

    case analysis

    Cathy did not see the shot coming and she never knew that it was the shot that hit her;…

    • 1397 Words
    • 6 Pages
    Good Essays
    Read More
  • Good Essays

    healthy work enivorment
    • 734 Words
    • 3 Pages

    healthy work enivorment

    This assignment is looking for the student to demonstrate competencies in cash flow analysis. The process of calculating cash flow is practiced; in addition, a critical thinking element is introduced. A successful assignment will present the cash flow calculations and discussion using APA formatting.…

    • 734 Words
    • 3 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Personal Finance Case 6-1
    • 339 Words
    • 2 Pages

    Personal Finance Case 6-1

    EXERCISE 6-8 (35-- 45 minutes) CONSTANTINE CAVAMANLIS INC. Statement of Cash Flows For the Year Ended December 31, 2008 Cash flows from operating activities Net income ............................................................. Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense .............................................. Increase in accounts receivable .................... Increase in accounts payable ................................. Net cash provided by operating activities ........... Cash flows from investing activities Purchase of equipment .........................................…

    • 339 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Powerful Essays

    Annual Report Group Project
    • 2414 Words
    • 10 Pages

    Annual Report Group Project

    1. Which of the two basic reporting approaches for cash flows from operating activities did the company adopt?…

    • 2414 Words
    • 10 Pages
    Powerful Essays
    Read More
  • Good Essays

    Standard Deviation and Cash Flow
    • 1664 Words
    • 7 Pages

    Standard Deviation and Cash Flow

    Cash flow (LO2) Assume a corporation has earnings before depreciation and taxes of $100,000, depreciation of $50,000, and that it has a 30 percent tax bracket. Compute its cash flow using the format below.…

    • 1664 Words
    • 7 Pages
    Good Essays
    Read More

Related Topics