I got this answered and wiley plus says the free cash flow is wrong. Question: Suppose...
I got this answered and wiley plus says the free cash flow is wrong.
Question: Suppose the following data were taken from the 2022 and 2021 financial statements of America...
Suppose the following data were taken from the 2022 and 2021 financial statements of American Eagle Outfitters. (All numbers, including share data, are in thousands.)
| 2022 | 2021 | |||
|---|---|---|---|---|
|
Current assets |
$ 865,200 | $980,000 | ||
|
Total assets |
1,897,200 | 1,812,000 | ||
|
Current liabilities |
412,000 | 350,000 | ||
|
Total liabilities |
531,216 | 507,360 | ||
|
Net income |
189,410 | 414,375 | ||
|
Net cash provided by operating activities |
335,000 | 486,000 | ||
|
Capital expenditures |
300,000 | 270,600 | ||
|
Dividends paid on common stock |
78,000 | 119,500 | ||
|
Weighted-average common shares outstanding |
201,500 | 212,500 |
(a)
Calculate the current ratio for each year. (Round
answers to 2 decimal places, e.g. 15.25.)
| 2022 | 2021 | ||||||
|---|---|---|---|---|---|---|---|
|
Current ratio |
enter current ratio rounded to 2 decimal places
|
: 1 | enter current ratio rounded to 2 decimal places
|
: 1 | |||
(b)
Calculate earnings per share for each year. (Round
answers to 2 decimal places, e.g. 15.25.)
| 2022 | 2021 | ||||||
|---|---|---|---|---|---|---|---|
|
Earnings per share |
$ | enter a dollar amount rounded to 2 decimal places
|
$ | enter a dollar amount rounded to 2 decimal places
|
|||
(c)
Calculate the debt to assets ratio for each year.
(Round answers to 1 decimal place, e.g.
29.5%.)
|
2022 |
2021 |
|||||
|---|---|---|---|---|---|---|
|
Debt to assets ratio |
enter percentages rounded to 1 decimal place
|
% | enter percentages rounded to 1 decimal place
|
% | ||
(d)
Calculate the free cash flow for each year. (Enter
negative amounts using either a negative sign preceding the number
e.g. -45 or parentheses e.g. (45).)
|
2022 |
2021 |
|||
|---|---|---|---|---|
|
Free cash flow |
$enter a dollar amount
|
$enter a dollar amount
|
| Click if you would like to Show Work for this question: |
Open Show Work |
Expert Answer
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a) Current ratio = current assets/current liabilities
For 2022
Current assets = 865,200
current liabilities = 412,000
Thus current ratio for 2022 = 865200/412000 = 2.10:1
For 2021
Current assets = 980,000
current liabilities = 350,000
Thus current ratio for 2016 = 980,000/350,000 = 2.80:1. b) Earnings per share (EPS) = net income/average outstanding common shares
For 2022
net income = 189,410
weighted average shares outstanding = 201,500
Thus EPS = 180000/201500 = 0.94
For 2021
net income = 414375
weighted average shares outstanding = 212,500
EPS = 414375/212500 = 1.95
c) Debt to asset ratio = total liabilities/total assets
For 2022
debt to asset ratio = 531,216/1897200 = 28%
For 2021
debt to asset ratio = 507360/1812000 = 28%
d) Free cash flow =cash flow from operating activities - net capital expenditure
For 2022
335,000 - 300,000 = $35,000
For 2021
486,000 - 270,600 = $215,400
Anonymous answered this
Homework Answers
Free cash flow =Cash flow from operating activities-Net capital expenditure-Dividend paid on common stock
For 2022
335000-300000-78000= $-43000
For 2021
486000-270600-119500= $95900
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Total assets
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Current liabilities
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Total liabilities
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Net income
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Net cash provided by operating activities
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Capital expenditures
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270,600
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Suppose the following data were taken from the 2022 and 2021
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(All numbers, including share data, are in thousands.)
2022
2021
Current assets
$ 865,200
$980,000
Total assets
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1,812,000
Current liabilities
412,000
350,000
Total liabilities
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507,360
Net income
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414,375
Net cash provided by operating activities
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486,000
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270,600
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119,500
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212,500
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