Principles of Corporate Finance

Changes in Cash & W.C.

Example -
Dynamic
Mattress
Company

Increase in cash balance $ 1

Total Uses $30

Dividend 1

Increased accounts receivable 5

Purchased marketable securities 5

Invested in fixed assets 14

Repaid short term bank loan 5

Uses

Total Sources $31

Depreciation 4

Net income 12

Cash from operations

Increased accounts payable 7

Reduced inventories 1

Issued long term debt 7

Sources