BUSN 379 DeVry Week 2 Case Study

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BUSN 379 DeVry Week 2 Case Study

BUSN379

BUSN 379 DeVry Week 2 Case Study

Case I is due at the end of this week. Prepare a memo in Word, which answers the questions in the Chapter 2 Case, Cash Flows and Financial Statements at Sunset Boards, Inc., on page 51 of the textbook. Use Excel to solve any financial calculations. You will be graded on correct financial analysis, proper use of technology, business-like presentation of technology, and business-like presentation.

Week 2 Case Study I.

  1. Prepare the following (You may put this in Word or submit an Excel):(60/60)
    1. An income statement for 2013 and 2014.
    2. A balance sheet for 2013 and 2014.
    3. Operating cash flow for 2013 and 2014.Hint: find the capital spending and change in net working capital. Ending net fixed assets – Beginning net fixed assets + Depreciation = Net capital spending. Ending NWC – Beginning NWC = Change in NWC. Operating cash flow – Net capital spending – Change in NWC = Cash flow from assets.
    4. Cash flow from assets for 2014
    5. Cash flow to creditors for 2014
    6. Cash flow to stockholders for 2014

 

  1. How would you describe Sunset Boards’ cash flows for 2014?(15/15)

Describe each of: positive earnings, cash flow from operations, net working capital, new fixed assets, total to all stakeholders, total to all bondholders, total to all stockholders. Take this from your work in A.

  1. What do you think about Tad’s expansion plans?(15/15)

 

Hint, address these questions: Is the expansion plan risky? What is the cash flow? What is the capital spending? How much does the company have to raise from creditors? Can they afford to expand?