Financial Analysis of Ingersoll, Inc.: Cash Flow Statements and Tax Calculations
Overview
This coursework assignment provides comprehensive financial analysis of Ingersoll, Inc. for 2020-2021, including income statements, balance sheets, cash flow calculations, and tax table computations. The analysis demonstrates cash flow to creditors, cash flow to stockholders, and operating cash flows, with detailed calculations showing the company's financial position and cash movements across different operational activities.
What this coursework covers
- Income statement and balance sheet for Ingersoll, Inc. comparing 2020 and 2021 financial data
- Calculation of cash flow from assets, cash flow to creditors, and cash flow to stockholders for 2021
- Statement of cash flows for TIME Manufacturing detailing operating, investing, and financing activities
- Tax table for married couples filing jointly with marginal tax rates and tax bill calculations
Preview
Chapter 2
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Chapter 2
21. Income statement and balance sheet for Ingersoll, Inc. for 2020 and 2021:
Income statement:
2020 | 2021 | |
|---|---|---|
Sales | $7,616 | $8,174 |
Cost of goods sold | 2,621 | 2,975 |
Gross profit | 4,995 | 5,199 |
Depreciation | 1,094 | 1,094 |
Other expenses | 2,387 | 2,725 |
Operating income | 1,514 | 1,380 |
Interest | 621 | 519 |
Earnings before taxes | 893 | 861 |
Taxes (21%) | 187 | 181 |
Net income | $706 | $680 |
Balance sheet:
Assets | 2020 | 2021 |
Cash | $4,195 | $9,400 |
Accounts receivable | 929 | 1,022 |
Inventory | 5,058 | 5,955 |
Net fixed assets | 33,490 | 35,144 |
Total assets | $43,672 | $51,521 |
Liabilities and Equity | 2020 | 2021 |
Short-term notes payable | $510 | $587 |
Accounts payable | 4,387 | 4,068 |
Long-term debt | 15,601 | 21,023 |
Total liabilities | $20,498 | $25,678 |
Common stock | 3,994 | 3,994 |
Retained earnings | 19,180 | 21,849 |
Total equity | $23,174 | $25,843 |
Total liabilities and equity | $43,672 | $51,521 |
22. Calculation of cash flow from assets, cash flow to creditors, and cash flow to stockholders for 2021:
The cash flow from assets (CFFA) is calculated as follows:
CFFA = Cash flow to creditors + Cash flow to stockholders
Cash flow to creditors (CFTC) is the amount of cash paid to creditors, including both interest and principal payments. It is calculated as follows:
CFTC = Interest paid x (1 - Tax rate) + (Long-term debt ending balance - Long-term debt beginning balance)
CFTC = $621 x (1 - 0.21) + ($21,023 - $15,601) = $2,863.59
Cash flow to stockholders (CFTS) is the amount of cash paid to shareholders, including dividends. It is calculated as follows:
CFTS = Dividends paid - (Common stock ending balance - Common stock beginning balance)
CFTS = $772 - ($3,994 - $3,994) = $772
Therefore,
CFFA = $2,863.59 + $772 = $3,635.59
The cash flow from assets is $3,635.59 for 2021.
Qn.