## Andretti Driving School Dec 31 2002 Balance

PART ONE Overview of Corporate Finance

Calculating OCF Gonas, Inc., has sales of \$9,750, costs of \$5,740, depreciation expense of \$1,000, and interest expense of \$240. If the tax rate is 35 percent, what is the operating cash flow, or OCF?

Calculating Net Capital Spending Andretti Driving School's December 31,

2001, balance sheet showed net fixed assets of \$3.1 million, and the December 31, 2002, balance sheet showed net fixed assets of \$3.5 million. The company's 2002 income statement showed a depreciation expense of \$850,000. What was Andretti's net capital spending for 2002?

Calculating Additions to NWC The December 31, 2001, balance sheet of Venus's Tennis Shop, Inc., showed current assets of \$1,200 and current liabilities of \$720. The December 31, 2002, balance sheet showed current assets of \$1,440 and current liabilities of \$525. What was the company's 2002 change in net working capital, or NWC?

Cash Flow to Creditors The December 31, 2001, balance sheet of Serena's Tennis Shop, Inc., showed long-term debt of \$3.1 million, and the December 31,

2002, balance sheet showed long-term debt of \$3.6 million. The 2002 income statement showed an interest expense of \$400,000. What was the firm's cash flow to creditors during 2002?

Cash Flow to Stockholders The December 31, 2001, balance sheet of Serena's Tennis Shop, Inc., showed \$750,000 in the common stock account and \$7.2 million in the additional paid-in surplus account. The December 31, 2002, balance sheet showed \$825,000 and \$7.8 million in the same two accounts, respectively. If the company paid out \$500,000 in cash dividends during 2002, what was the cash flow to stockholders for the year?

Calculating Total Cash Flows Given the information for Serena's Tennis Shop, Inc., in Problems 11 and 12, suppose you also know that the firm's net capital spending for 2002 was \$600,000, and that the firm reduced its net working capital investment by \$195,000. What was the firm's 2002 operating cash flow, or OCF?

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