Question

1) A junior staff member has provided you with the following balance sheet information for 2014 & 2015 along with income statement information for 201:5 Catego Current Assets 2014 $1,000 Catego Sales Cost of Goods Sold Interest Expense 2015 $10,000 2015 S1,200 5,000 600 5,600 800 $4,800 SO Net Fixed Assets Accounts Pavable Accrued Expenses Long-term Debt 500 3,000 600 3,300 $1,200 30% Depreciation Tax Rate a)Calculate Net Working Capital for 2015. b) Calculate the Operating Cash Flow for 2015. c)Calculate the Free Cash Flow for 2015. d) Clearly the junior staffer left out a critical element of the balance sheet for 2014 & 2015. What was left out and what must it be equal to in 2014 & 2015?

Answer 1

income statement
sales		10000
less cogs		4800
gross profit		5200
less depreciation		1200
before tax profit		4000
less tax - 30%		1200
net incoome		2800
net working capital 2015	total of current assets- total of current liabilities	1200-(800+600)	-200
operating cash flow	net income+depreication-increase in current assets+increase in accounts payable + increase in accrued expense	2800+1200-200+200+100	4100
free cash flow	cash flow from operating activities-capital expenditure	4100-600	3500
amount of shareholders equity is left and value of common stock remains left in the balance. Value of common stock outstanding