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21 June, 12:52

g During the past year, a company had cash flow to creditors, an operating cash flow, and net capital spending of $30,591, $69,573, and $30,460, respectively. The net working capital at the beginning of the year was $12,352 and it was $14,650 at the end of the year. What was the company's cash flow to stockholders during the year

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  1. 21 June, 15:54
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    The company's cash flow to stockholders during the year is $6,224

    Explanation:

    In this question, we are asked to calculate a company's cash flow to stakeholders during a particular year.

    To calculate this, we proceed as follows;

    Change in Net Working Capital = Ending Working Capital - Beginning Working Capital

    Change in Net Working Capital = $14,650 - $12,352 = $2,298

    Cash Flow from Assets = Operating Cash Flow - Net Capital Spending - Change in Working Capital

    Cash Flow from Assets = $69,573 - $30,460 - $2,298 = $36,815

    Cash Flow to stockholders = Cash Flow from Assets - Cash flow to Creditors

    = $36,815 - $30,591 = $6,224
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