Use the following income statement and balance sheet to answer the next three qu
ID: 2743447 • Letter: U
Question
Use the following income statement and balance sheet to answer the next three questions Nabors, inc 2010 Income statement ($ in millions) Net sales $9,610 Less: cost of goods sold 6,310 Less: Depreciation 1.370 Earnings before interest and taxes 1,930 Less: Interest paid 630 Taxable Income $1.300 Less: Taxes 455 Net income $845 Nabors, Inc. 2009 and 2010 balance sheets ($ in millions) Cash (2009) $310 Accounts rec. 2,640 Inventory 3,275 Total $6225 Net fixed assets 10,960 Total assets $17.185 Accounts payable $2,720 Notes payable 100 Total $2,820 Long- term debt 7,875 Common stock 5,000 Retained earnings 1,490 Total liab& equity $17,185 Cash (2010) $405 Accounts rec. 3,055 Inventory 3,850 Total $3710 Net fixed assets 10.670 Total assets $17,980 Accounts payable 2,570 Notes payable 0 Total $2,570 Long- term debt 8,100 Common stock 5, 250 Retained earnings 2,060 Total liab& equity $17,980 What is the change in the net working capital from 2009 to 2010? Select one: 1. $1,235 2. $1,035 $1,335 3. $1,035 4. $3,405 5. $4,740 What is the operating cash flow for 2010? Select one: 1. $845 2. $1,930 3. $2,215 4. $2,845 5. $3,060 What is the cash flow of the firm for 2010? Select one: 1. $405 2. $1,340 3. $1,340 $430 4. $2,590 5. $3,100
Explanation / Answer
1- Change in WC
3- Change in Working Capital= $1335 (4740-3405)
CALCULATION OF OPERATING CASH FLOW-
CASHFLOW OF FIRM IN 2010
2010 2009 Cash $405.00 $310.00 Account Rec. $3,055.00 $2,640.00 Inventory $3,850.00 $3,275.00 Total Current Assets (A) $7,310.00 $6,225.00 Account Payble $2,570.00 $2,720.00 Note Payble $0.00 $100.00 Total Current Liabilities(B) $2,570.00 $2,820.00 Working Capital (A-B) $4,740.00 $3,405.00