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During the past year, a company had cash flow to stockholders, an operating cash flow, and net capital spending of $16,497, $40,016, and $18,820, respectively. The net working capital at the beginning of the year was $7,083 and it was $8,930 at the end of the year. What was the company's cash flow to creditors during the year?

Respuesta :

Answer:

The correct answer would be $2,852.

Explanation:

The equation here to understand is:

Ending net working capital = Opening net working capital - Cash flow to Stockholders + operating cash flow - net capital spending - cash flow to creditors.

$8,930 = $7,083 - $16,497 + $40,016 - $18,820 - X.

X = 2,852.

For calculating ending working capital we need to keep in mind that all cash inflows are added in opening working capital and all cash outflows are subtracted.

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