Question

Fiesta Co. Ltds income statement is given below: 15,000,000 6,000,000 9,000,000 4,000,000 5,000,000 1,500,000 3,500,000 1,40

a. What is its after-tax operation income (NOPAT)?

b. What is its free cash flow?

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Answer #1

a. NOPAT = EBIT - Taxes = 5,000,000 - 1,400,000 = 3,600,000

b. Free cash Flow = NOPAT + Depreciation - Gross Operating capital = 3600000 + 4000000 -3500000 =4,100,000

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