You are attempting to calculate a firm’s free cash flow to equity. You know the following...
You are attempting to calculate a firm’s free cash flow to equity. You know the following information about the firm. What is the firm’s free cash flow to equity in year 2?
|
Year |
||
|
1 |
2 |
|
|
After-tax earnings |
130,000 |
150,000 |
|
Depreciation |
30,000 |
25,000 |
|
Current Assets |
15,000 |
10,000 |
|
Current Liabilities |
10,000 |
5,000 |
|
Net PPE (this is your investment in fixed assets) |
100,000 |
120,000 |
A) $145,000
B) $155,000
C) $150,000
D) $140,000
E) $135,000
Homework Answers
increase in working capital = working capital year 2 - working capital year 1 = (Current asset year 2 - current liability year 2) - (Current asset year 1 - current liability year 1)= (15000-10000)-(10000-5000)=0
increase in net ppe = (net ppe year 2 - net ppe year 1) = (120000-100000)=20000
Free cash flow = after tax earning + depreciation - increase in working capital - increase in net ppe = 150000+25000-0-20000=$155000 (opt b)
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thank you!
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Free cash flow?
Given the information above what is the amount of free cash flow
for the company for the year?
Please provide formula/equations?
BUS 7013 - Managerial Accounting Cash Flow Statement Amount Calculations - Chapter 14 End of year Beginning of year Current year Change Income statement Balance sheet Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment, at cost Less: Accum. depreciation Net equipment Total assets 86,000 112,000 141,000 18,000 357,000 298,000 (100,000) 198,000 555,000 54,000 126,000...
Prepare a Cash Flow Statement.
Robust Robots, Inc. Comparative Balance Sheet December 31, 2019 and 2018 2018 2019 $ Assets Current Assets: Cash Accounts Receivable, net Merchandise Inventory Supplies Prepaid Insurance Total Current Assets 65,000 150,000 135,000 9,700 30,000 389,700 $ $ $ $ $ $ 80,000 100,000 70,000 500 10,000 260,500 $ Property, plant, and Equipment: Equipment Less: Accumulated Depreciation - Equipment Total Property, Plant, and Equipment Total Assets $ $ $ $ 500,000 (80,000) 420,000 809,700 $ $...
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