How do I calculate the Investment in Net Profit Operating Capital? I need an example of...
How do I calculate the Investment in Net Profit Operating Capital? I need an example of how to do it. I am stuck on this area of my excel worksheet for Chapter 12 11P. I am working on the following worksheet and I cannot figure out how to get the answer to for the Investment in total net operating capital.
| Actual | Projected | Projected | Projected | Projected | |
| Calculation of FCF | 12/31/2016 | 12/31/17 | 12/31/18 | 12/31/19 | 12/31/20 |
| Operating current assets | $248.00 | $285.20 | $313.72 | $332.5 | $352.50 |
| Operating current liabilities | $56.0 | $64.40 | $70.84 | $75.1 | $79.60 |
| Net operating working capital | $192.0 | $220.8 | $242.9 | $257.5 | $272.9 |
| Net PPE | $600.0 | $690.0 | $759.0 | $804.5 | $852.8 |
| Total net operating capital | $792.0 | $910.8 | $1,001.9 | $1,062.0 | $1,125.7 |
| NOPAT | $98.4 | $75.4 | $124.5 | $131.9 | $139.9 |
| Investment in total net operating capital | na | ||||
| Free cash flow | na | ||||
| Growth in FCF | na | na | |||
| Growth in sales |
Homework Answers
| A | B | C | D | E | F | G | H | I | J | K |
| 2 | ||||||||||
| 3 | ||||||||||
| 4 | For NPV to be calculated free cash flow can be calculated as follows: | |||||||||
| 5 | Free Cash Flow = NOPAT - Capital Expenditures - Change in working capital | |||||||||
| 6 | ||||||||||
| 7 | Investment in net operating capital | =Final net operating capital - Initial net operating capital | ||||||||
| 8 | ||||||||||
| 9 | ||||||||||
| 10 | Actual | Projected | Projected | Projected | Projected | |||||
| 11 | Calculation of FCF | 12/31/2016 | 12/31/2017 | 12/31/2018 | 12/31/2019 | 12/31/2020 | ||||
| 12 | Operating current assets | $248.00 | $285.20 | $313.72 | $332.50 | $352.50 | ||||
| 13 | Operating current liabilities | $56.00 | $64.40 | $70.84 | $75.10 | $79.60 | ||||
| 14 | Net operating working capital | $192.00 | $220.80 | $242.90 | $257.50 | $272.90 | ||||
| 15 | Net PPE | $600.00 | $690.00 | $759.00 | $804.50 | $852.80 | ||||
| 16 | Total net operating capital | $792.00 | $910.80 | $1,001.90 | $1,062.00 | $1,125.70 | ||||
| 17 | NOPAT | $98.40 | $75.40 | $124.50 | $131.90 | $139.90 | ||||
| 18 | Investment in total net operating capital | na | $118.80 | $91.10 | $60.10 | $63.70 | =H16-G16 | |||
| 19 | Free cash flow | na | ($72.20) | $11.30 | $57.20 | $60.80 | =H17-H18-(H14-G14) | |||
| 20 | ||||||||||
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How do I calculate the Investment in Net Profit Operating Capital? I need an example of...
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