Homework Answers
| OCF=Operating Cash flow=EBIT-taxes+depn. |
| ie.6000-840+3000= |
| 8160 |
| NCS=Net capital spending=Ending net fixed assets-Beginning net fixed assets+Depn. For the year |
| OR Ending gross fixed assets-Beginning gross fixed assets |
| ie. 168000-155000+3000= |
| 16000 |
| OR Ending gross fixed assets-Beginning gross fixed assets |
| 186000-170000= |
| 16000 |
| written as -16000 (cash outflow) |
| Change in NWC=Year 2(Current assets-Current Liabilities)-Year 1(Current assets-Current Liabilities) |
| ie. (12000-9000)-(10000-8000)= |
| 1000 |
| ie. Increase in NWC , so cash outflow , in acquiring additional working capital---may be increase of current assets or Decrease /payment of any current liability |
| so, written as -1000 |
| CFS=Cash flow for Stockholders=Dividends paid-new equity raised |
| (1960*50%)-(13020-8000)= |
| -4040 |
| CFC=Cash flow to Creditors=Interest paid-Net borrowings |
| ie.3200-(88000-80000)= |
| -4800 |
| Cash flow from assets(CFFA)=CFS+CFC |
| CFFA=OCF+/-change in NWC-CAPEX |
| ie. 8160-1000-16000= |
| -8840 |
| CFS+CFC=-4040-4800= |
| -8840 |
| CFFA=CFS+CFC |
| FCF=Net Income+depn+/- Change in NWC-Capital expenditure |
| ie.1960+3000-1000-16000= |
| -12040 |
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1. A firm has the financial information shown below. The average tax rate is 30%. Th...
. A firm has the financial information shown below. The average tax rate is 30%. The...
. A firm has the financial information shown below. The average tax rate is 30%. The plowback ratio is 50%. Calculate OCF, NCS, change in NWC, CFS, CFC, and FCF. Income Statement Revenues Cost of Goods Sold Other operating expenses Depreciation expense EBIT Interest Expense Taxable Income 2019 $20,000 $10,000 $1,000 $3,000 $6,000 $3,200 $2800 $840 $1,960 Taxes Net income 2020 2019 2020 Balance Sheet 2019 $12,000 Current Liabilities $9,000 $8,000 Current Assets $10,000 $88,000 Long-term debt $80,000 $186,000 Total...
OCF=operating cash flow NCS-net capital spending NWC= net working capital CFS=cash flow to shareholders CFC=cash flow...
OCF=operating cash flow
NCS-net capital spending
NWC= net working capital
CFS=cash flow to shareholders
CFC=cash flow to creditors
FCF=free cash flow
1. A firm has the financial information shown below. The average tax rate is 30%. The plowback ratio is 50%. Calculate OCF, NCS, change in NWC, CFS, CFC, and FCF. Income Statement 2019 Revenues $20,000 Cost of Goods Sold $10.000 Other operating expenses $1,000 Depreciation expense $3.000 EBIT $6,000 Interest Expense $3,200 Taxable income $2.800 Taxes $840 Net income...
3. Use the information below to find the firm's cash flows (OCF, NCS, change in NWC,...
3. Use the information below to find the firm's cash flows (OCF, NCS, change in NWC, FCF, CFC, CFS). The firm's plowback ratio is 60% and the average tax rate is 30%. 2015 2016 Sales $3,500 Cost of Goods Sold $1,800 Depreciation Expense $875 Interest Expense $425 Current Assets $2,000 $2,500 Total Fixed Assets $6,200 $7,300 Accumulated Depreciation $1,300 200 This can be determined from the information given Current Liabilities $1,300 $1,500 Long-term Debt $3,500 $3,700 Common Stock This can...
The average tax rate is 35% and the dividend payout ratio is 65% OCF = 725 NCS = 500 Change in NW...
The average tax rate is 35% and the dividend payout ratio is
65%
OCF = 725
NCS = 500
Change in NWC = 225
FCF = 0
CFC = 325
CFS = - 325
1. Use a 20% growth rate and forecast next year’s financial
statements assuming the following: sales and cost of goods sold
increase at the same rate; interest expense remains the same
percentage of long-term debt; depreciation expense remains the same
percentage of total fixed assets; current...
2013 2014 Sale $2100 Costs of goods sold $1200 Depreciation expense $225 Interest expense $175 Current...
2013 2014 Sale $2100 Costs of goods sold $1200 Depreciation expense $225 Interest expense $175 Current assets $1000 $1300 Total fixed assets $3500 $4000 Accumulated depreciation $1250 This can be determined from the information given Current liability $900 $975 Long-term debt $1500 $1350 Common stock $400 This can be determined from the information given The average tax rate is 35% and the dividend payout ratio is 65% OCF = 725 NCS = 500 Change in NWC = 225 FCF =...
Rhodes Corporation’s financial statements are shown below. Suppose the federal-plus-state tax corporate tax is 25%. Answer...
Rhodes Corporation’s financial statements are shown below.
Suppose the federal-plus-state tax corporate tax is 25%. Answer the
following questions.
e. What is the ROIC for 2020?
f. How much of the FCF did Rhodes use for each of the following
purposes: after-tax interest, net debt repayments, dividends, net
stock repurchases, and net purchases of short-term investments?
Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2019 $10,000 8,728 360 $ Sales Operating costs excluding depreciation Depreciation and...
Use the financial statements of a company to answer the 4 questions that follow it. When...
Use the financial statements of a company to answer the 4 questions that follow it. When answering the questions (filling in the blanks), DO NOT use dollar signs, USE commas to separate thousands, DO NOT use parenthesis to denote negative numbers, USE the negative sign in front of first digit for negative numbers. Round to the nearest dollar. For example, if you obtain $200,436.75 then enter in the box: 200,437 Income Statement year ending 2016 Sales Revenues Cost of goods...
Presented below is balance sheet information regarding Sargent Corporation as of December 31, 2020. Current assets:...
Presented below is balance sheet information regarding Sargent Corporation as of December 31, 2020. Current assets: cash and cash equivalents, $150,000; accounts receivable, $170,000; allowance for doubtful accounts, $10,000; inventories, $200,000 cost, $180,000, net realizable value. Fixed assets: buildings, $1,040,000 less $360,000 accumulated depreciation; equipment, $450,000 less $180,000 accumulated depreciation; land $500,000; land held for future use, $270,000. Current liabilities: accounts payable, $150,000; notes payable, $80,000; income taxes payable, $40,000; unearned rent revenue, $5,000. Other liabilities: long-term notes payable issued...
The comparative statement of financial position of Riverbed Corporation as at December 31, 2020, follows: RIVERBED...
The comparative statement of financial position of Riverbed Corporation as at December 31, 2020, follows: RIVERBED CORPORATION Statement of Financial Position December 31 December 31 Assets Cash Accounts receivable 2019 } 3,600 87,300 2020 $ 52,000 91,000 27,500 (10,500) $ 160,000 22,900 (10,900) 102,900 $ Equipment Less: Accumulated depreciation Total Liabilities and Shareholders' Equity Accounts payable Common shares Retained earnings Total $ 20,000 100,000 40,000 $ 160,000 $ 10,000 75,800 17,100 $ 102,900 Net income of $36,300 was reported and...
1. Consider the following financial statement information for the Hop Corporation: Item Beginning Ending Inventory $...
1. Consider the following financial statement information for the Hop Corporation: Item Beginning Ending Inventory $ 10,800 $ 11,800 Accounts receivable 5,800 6,100 Accounts payable 8,000 8,400 Net sales $ 88,000 Cost of goods sold 68,000 Calculate the operating cycle Calcuate the cash cycle 2. Here are the most recent balance sheets for Country Kettles, Inc. Excluding accumulated depreciation, determine whether each item is a source or a use of cash, and the amount. COUNTRY KETTLES, INC. Balance Sheet 2018...
. A firm has the financial information shown below. The average tax rate is 30%. The plowback ratio is 50%. Calculate OCF, NCS, change in NWC, CFS, CFC, and FCF. Income Statement Revenues Cost of Goods Sold Other operating expenses Depreciation expense EBIT Interest Expense Taxable Income 2019 $20,000 $10,000 $1,000 $3,000 $6,000 $3,200 $2800 $840 $1,960 Taxes Net income 2020 2019 2020 Balance Sheet 2019 $12,000 Current Liabilities $9,000 $8,000 Current Assets $10,000 $88,000 Long-term debt $80,000 $186,000 Total...
OCF=operating cash flow
NCS-net capital spending
NWC= net working capital
CFS=cash flow to shareholders
CFC=cash flow to creditors
FCF=free cash flow
1. A firm has the financial information shown below. The average tax rate is 30%. The plowback ratio is 50%. Calculate OCF, NCS, change in NWC, CFS, CFC, and FCF. Income Statement 2019 Revenues $20,000 Cost of Goods Sold $10.000 Other operating expenses $1,000 Depreciation expense $3.000 EBIT $6,000 Interest Expense $3,200 Taxable income $2.800 Taxes $840 Net income...
3. Use the information below to find the firm's cash flows (OCF, NCS, change in NWC, FCF, CFC, CFS). The firm's plowback ratio is 60% and the average tax rate is 30%. 2015 2016 Sales $3,500 Cost of Goods Sold $1,800 Depreciation Expense $875 Interest Expense $425 Current Assets $2,000 $2,500 Total Fixed Assets $6,200 $7,300 Accumulated Depreciation $1,300 200 This can be determined from the information given Current Liabilities $1,300 $1,500 Long-term Debt $3,500 $3,700 Common Stock This can...
The average tax rate is 35% and the dividend payout ratio is
65%
OCF = 725
NCS = 500
Change in NWC = 225
FCF = 0
CFC = 325
CFS = - 325
1. Use a 20% growth rate and forecast next year’s financial
statements assuming the following: sales and cost of goods sold
increase at the same rate; interest expense remains the same
percentage of long-term debt; depreciation expense remains the same
percentage of total fixed assets; current...
Rhodes Corporation’s financial statements are shown below.
Suppose the federal-plus-state tax corporate tax is 25%. Answer the
following questions.
e. What is the ROIC for 2020?
f. How much of the FCF did Rhodes use for each of the following
purposes: after-tax interest, net debt repayments, dividends, net
stock repurchases, and net purchases of short-term investments?
Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2019 $10,000 8,728 360 $ Sales Operating costs excluding depreciation Depreciation and...
Use the financial statements of a company to answer the 4 questions that follow it. When answering the questions (filling in the blanks), DO NOT use dollar signs, USE commas to separate thousands, DO NOT use parenthesis to denote negative numbers, USE the negative sign in front of first digit for negative numbers. Round to the nearest dollar. For example, if you obtain $200,436.75 then enter in the box: 200,437 Income Statement year ending 2016 Sales Revenues Cost of goods...
The comparative statement of financial position of Riverbed Corporation as at December 31, 2020, follows: RIVERBED CORPORATION Statement of Financial Position December 31 December 31 Assets Cash Accounts receivable 2019 } 3,600 87,300 2020 $ 52,000 91,000 27,500 (10,500) $ 160,000 22,900 (10,900) 102,900 $ Equipment Less: Accumulated depreciation Total Liabilities and Shareholders' Equity Accounts payable Common shares Retained earnings Total $ 20,000 100,000 40,000 $ 160,000 $ 10,000 75,800 17,100 $ 102,900 Net income of $36,300 was reported and...
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