What is the cash flow to creditors?
LO 4 22. Cash Flow Identity Graffiti Advertising, Inc., reported the following
financial statements for the last two years. Construct the cash flow identity
for the company. Explain what each number means.
2019 Income Statement
Sales $750,727
Cost of goods sold 430,821
Selling and administrative 165,676
Depreciation 72,489
EBIT $ 81,741
Interest 25,630
EBT $ 56,111
Taxes 14,028
Net income $ 42,083
Dividends $ 14,200
Addition to retained earnings 27,883
GRAFFITI ADVERTISING, INC.
Balance Sheet as of December 31, 2018
Cash $ 17,691 Accounts payable $ 12,721
Accounts receivable 25.228
Notes payable 19,149
Inventory 18,321
Current liabilities $ 31,870
Current assets $ 61,240
Long-term debt $181,000
Net fixed assets $457,454
Owners’ equity $305,824
Total liabilities and
Total assets $518,964 owners’ equity $518,694