Question

G21 imate afirm'stree cash flows and returns Fill in the blue color cells S Usethe given inputs in the previous worksheet to do thecalculations 6 Turn in a hard copy of this worksheet when you cometo the exam. No need to turn in the "inputs "worksheet. 9 Firm's perspective 2017 8,868 2,217) EBIT(1-t) change in fixed assets change in noncash WC 12 13 Cash flow to firm FCFF FCFF (as % of EBIT(1-t)) 68% 15 16 Return 17 ROC 7.48%) use average capital 19 Equity's perspective 2017 Net Income 21 change in fxed assets change in noncash WC +increase in debt FCFE FCFE (as % of Net Income) 23 24 Cash flow to equity 25 26 27 Return 28 29 ROE use average eqwty

Answer 1

A	B	C	D	E	F	G	H	I	J
2
3		Free cash flow to the firm (FCFF) can be calculated as follows:
4		Free Cash Flow = EBIT*(1-Tax Rate)+Depreciation - Capital Expenditures - Change in working capital
5
6		ROC	=NOPAT / Average capital
7		NOPAT	=EBIT*(1-Tax Rate)
8
9		FCFE	=Net Income - Capital Expenditures - Change in working capital + Increase in Debt
10		ROE	=Net Income / Average Equity
11
12		Firm's Perspective	Year	2017
13			EBIT(1-t)	$8,867.24	=17545*(1-49.46%)
14			-Change in fixed asset	($2,217.00)	=-(38470-36253)
15			-change in noncash WC	($580.00)	=-(1620-1040)
16		Cash flow to firm	FCFF	$6,070.24	=SUM(E13:E15)
17			FCFF (as % of EBIT*(1-t))	68.46%	=E16/E13
18
19		Return	ROC	7.48%	=E13/AVERAGE(127706,109509)
20
21		Equity Perspective	Year	2017
22			Net Income	$22,714.00
23			-Change in fixed asset	($2,217.00)	=-(38470-36253)
24			-change in noncash WC	($580.00)	=-(1620-1040)
25			+ increase in debt	$7,044.00	=(123656-116612)
26		Cash flow to equity	FCFE	$19,917.00	=SUM(E22:E24)
27			FCFE (as % of Net Income)	87.69%	=E26/E22
28
29		Return	ROE	37.07%	=E22/AVERAGE(68606,53943)
30