Cumberland Industries Balance Sheets for 2009 and 2010

101411

You have been asked to develop a Statement of Cash flows for Cumberland Industries for 2010.
Below are the Actual and Pro Forma Balance Sheets for 2009 and 2010.

Guidance
Common Stock Sold

Value
$10,000,000

2010

2009

Assets
Cash
Short Term Investments
Accounts Receivable
Inventories
Total Current Assets

Total Assets

2009

$30,693,500
$30,405,000
$12,717,000
-------$73,815,500

$23,109,000
$22,656,000
$14,217,000
-------$59,982,000

$80,263,000
-------$154,078,500

$63,914,000
-------$123,896,000

$100,000,000
$62,691,500
-------$162,691,500

$90,000,000
$38,774,000
-------$128,774,000

$316,770,000

$252,670,000

Liabilites and Equities

$91,450,000
$11,400,000
$108,470,000
$38,450,000
-------$249,770,000

$74,625,000
$15,100,000
$85,527,000
$34,982,000
-------$210,234,000

$67,000,000
--------

$42,436,000
--------

$316,770,000

$252,670,000

Accounts Payable
Accruals
Notes Payable
Total Current Liabilities
Long-Term Debt

Net Fixed Assets

2010

Total Liabilites
Common Stock
Retained Earnings
Total Common Equity

Total Liabilities and Equity

Cumberland Industries' Income Statement

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Below is Cumberland Industries Pro-Forma Income Statement for 2010.

2010 Guidance
Sales
Operating Costs, excluding Depreciation, as a percent of Sales
Net Fixed Assets
Depreciation as a percent of Net Fixed Assets
Interest Expense
Tax Rate
Dividends Paid as a percent of Net Income (aka Payout Ratio)

Sales
Operating Costs excluding Depreciation
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)

$
$
$

Value
455,000,000
85%
67,000,000
10%
8,550,000
40%
25%
2010
$455,150,000
$386,750,000
-------------------$68,400,000

Depreciation

$6,700,000

Interest Paid

$8,550,000
-----------$53,150,000

Earnings Before Taxes

Taxes (40%)
Net Income

$21,260,000
-------------------$31,890,000

Common Stock Dividends

$7,972,500

Addition to Retained Earnings

$23,917,500

Cumberland Industries Cash Flow Statement for 2010

Oh, Yes, they did you for a Cash Flow Statement like the one in Table 3.6

Income Statement ($ Millions)

Net Income
Depreciation
Common Dividends

Balance Sheet ($ Millions)

Accounts Receivable
Inventories
Short-Term Investments
Fixed Assets
Accounts Payable
Accruals
Notes Payable
Long-Term Debt
Common Stock

Operating
$31,890,000
$6,700,000

2010
$108,470,000.0
$38,450,000.0
$11,400,000.0
$67,000,000.0
$30,693,500.0
$30,405,000.0
$12,717,000.0
$80,263,000.0
$100,000,000.0

2009
$85,527,000.0
$34,982,000.0
$15,100,000.0
$42,436,000.0
$23,109,000.0
$22,656,000.0
$14,217,000.0
$63,914,000.0
$90,000,000.0

($22,943,000)
($3,468,000)
($31,264,000.0)
$7,584,500
$7,749,000

-------------$27,512,500

Summary Cash Flows

Ending Cash Balance Dec. 31, 2009

$74,625,000

Ending Cash Balance Dec. 31, 2010

$91,450,000.0

Investing

-------------($31,264,000)

101411

Financing

($7,972,500.0)

$3,700,000.0

($1,500,000)
$16,349,000.0
$10,000,000.0

-------------$20,576,500

Cumberland Industries Cash Flow Statement for 2010

The Calculations
Cash at End of Last Year
+/- Cash Provided or Used in Operating Activities
+/- Cash Provided or Used in Investing Activities
+/- Cash Provided or Used in Financing Activities
------------------------------------------------------------------= Cash at End of This Year
where Cash Provided is a positive number and Cash Used is a negative number.

Income Statement ($ Millions)

Net Income
Depreciation
Common Dividends
BALANCE SHEET ASSETS ($ Millions)
Accounts Receivable
Inventories
Short-Term Investments
Fixed Assets
Accounts Payable
Accruals
Notes Payable
Long-Term Debt
Common Stock

Operating
$31,890,000
$6,700,000

2010
$108,470,000
$38,450,000
$11,400,000
$73,700,000
$30,693,500
$30,405,000
$12,717,000
$80,263,000
$100,000,000

2009
$85,527,000
$34,982,000
$15,100,000
$42,436,000
$23,109,000
$22,656,000
$14,217,000
$63,914,000
$90,000,000

Ending Cash Balance Dec. 31, 2010

$74,625,000
$91,450,000

Investing

($22,943,000)
($3,468,000)
($31,264,000)
$7,584,500
$7,749,000

-------------$27,512,500

Summary Cash Flows

Ending Cash Balance Dec. 31, 2009

Net Plant & Equipment at the End of Last Year

- Net Plant & Equipment at the End of This Year
- Depreciation This Year
------------------------------------------------------------------Cash Used for Plant & Equipment This Year

-------------($31,264,000)

101110

e End of Last Year

e End of This Year

--------------------------pment This Year

Financing

($7,972,500)

$3,700,000

($1,500,000)
$16,349,000
$10,000,000
-------------$20,576,500