FINA 2201 Chapter Notes - Chapter 3: Internal Revenue Code, Alternative Minimum Tax, Operating Cash Flow
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16 Dec 2016
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Balance Sheets: | |||
2013 | 2012 | ||
Cash and equivalents | $100 | $85 | |
Accounts receivable | 275 | 300 | |
Inventories | 375 | 250 | |
Total current assets | $750 | $635 | |
Net plant and equipment | 2,300 | 1,490 | |
Total assets | $3,050 | $2,125 | |
Accounts payable | $150 | $85 | |
Accruals | 75 | 50 | |
Notes payable | 150 | 75 | |
Total current liabilities | $375 | $210 | |
Long-term debt | 450 | 290 | |
Common stock | 1,225 | 1,225 | |
Retained earnings | 1,000 | 400 | |
Total liabilities and equity | $3,050 | $2,125 |
Income Statements: | |||
2013 | 2012 | ||
Sales | $2,500 | $1,200 | |
Operating costs excluding depreciation | 1,250 | 1,000 | |
EBITDA | $1,250 | $200 | |
Depreciation and amortization | 100 | 75 | |
EBIT | $1,150 | $125 | |
Interest | 62 | 45 | |
EBT | $1,088 | $80 | |
Taxes (40%) | 435 | 32 | |
Net income | $653 | $48 | |
Dividends paid | $53 | $48 | |
Addition to retained earnings | $600 | $0 | |
Shares outstanding | 100 | 100 | |
Price | $25.00 | $22.50 | |
WACC | 10.00% |
The balance in the firm's cash and equivalents account is needed for operations and is not considered "excess" cash.
Using the financial statements given above, what is Rosnan's 2013 free cash flow (FCF)? Use a minus sign to indicate a negative FCF.
Please show all calculations, I cannot see how to calculate the capital expenditures
Financial statements of Ansbro Corporation follow: |
Ansbro Corporation Comparative Balance Sheet | ||
Ending Balance | Beginning Balance | |
Assets: | ||
Cash and cash equivalents | $32 | $29 |
Accounts receivable | 82 | 80 |
Inventory | 41 | 39 |
Property, plant and equipment | 648 | 560 |
Less: accumulated depreciation | 346 | 307 |
Total assets | $457 | $401 |
Liabilities and stockholders' equity: | ||
Accounts payable | $49 | $68 |
Bonds payable | 135 | 190 |
Common stock | 92 | 80 |
Retained earnings | 181 | 63 |
Total liabilities and stockholders' equity | $457 | $401 |
Income Statement | |
Sales | $745 |
Cost of goods sold | 373 |
Gross margin | 372 |
Selling and administrative expenses | 127 |
Net operating income | 245 |
Income taxes | 87 |
Net income | $158 |
Cash dividends were $40. The company did not dispose of any property, plant, and equipment. It did not issue any bonds payable or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows. |
The net cash provided by (used in) investing activities for the year was: |
$12
$(88)
$(55)
$(40)