Question 9) Net Working Capital for 2007 is $3,597 and Net Wo

9) Net Working Capital for 2007 is $3,597 and Net Working Capital for 2008 is $1,890. What is the change in Net Working Capital?

A) $1,707

B) -$1,707

C) -$1,727

D) -$2,527

10) Which of the statements below is FALSE?

A) Understanding the underpinnings of the accounting identity and the relationship across the primary financial statements provides a springboard for projecting cash flow for future periods for both the company in general and for individual projects within a company.

B) The right hand side of the balance sheet represents all the claims to the assets of the company, with these claims representing two types of lenders: creditors and owners.

C) Change in net working capital looks at both long-term assets and long-term liabilities.

D) Cash flow from assets examines the success or failure of the operating decisions, while cash flow to creditors examines a portion of how the firm is financing the operations.

11) The cash flow identity states that the cash flow from the left hand side of the balance sheet is equal to the cash flow on the right hand side of the income statement.

12) Cash flow from assets shows the success or failure of the operating decisions, while cash flow to creditors examines a portion of how the firm is financing the operations.

13) Cash flow from assets is derived from ________.

A) cash flow from operating activities and cash flow from investing activities

B) cash flow from operating activities and cash flow from financing activities

C) cash flow from financing activities and cash flow from investing activities

D) cash flow from creditors and cash flow from investing activities

14) Stimulus Industries Inc has 2011 total current assets of $14,871,000. Last year the total current assets were equal to $12,462,000, The change in total current assets is a ________ of cash in the amount of ________.

A) source; $14,871,000

B) source; $2,409,000

C) use; $2,409,000

D) There is not enough information to answer this question.

15) Free cash flow is the ________.

A) cash flow from assets.

B) the remaining cash free to distribute to creditors and owners of the firm

C) cash that a a company generates to to operate the company

D) All of the above

16) An increase in current assets is a source of cash.

17) An increase in borrowing from long-term debt holders is a source of cash.

18) The change in net working capital subtracts beginning net working capital from ending net working capital.

19) Cash flow from assets equals cash flow to creditors plus cash flow to stockholders.

20) Consider the information below from a firm’s balance sheet for 2007 and 2008.

Current Assets 2008 2007 Change

Cash and Equivalents $1,561 $1,800 -$ 239

Short-Term Investments $1,052 $3,010 -$1,958

Accounts Receivable $3,616 $3,129 $ 487

Inventories $1,816 $1,543 $ 273

Other Current Assets $ 707 $ 601 $ 106

Total Current Assets $8,752 $10,083 -$1,331

Current Liabilities

Accounts Payable $5,173 $5,111 $ 62

Short-Term Debt $ 288 $ 277 $ 11

Other Current Liabilities $1,401 $1,098 $ 303

Total Current Liabilities $6,862 $6,486 $ 376

What is the Net Working Capital for 2008? What is it for 2007? What is the Change in Net Working Capital (NWC)? Assuming the Operating Cash Flows (OCF) are $7,155 and the Net Capital Spending (NCS) is $2,372, what is the Cash Flow from Assets?