Question

2017 2018 $12.17 Year-end common stock price Year-end shares outstanding $6.00 250,000 100,000 40% Tax rate 40% Balance Sheets Prepare the following: Assets Cash and equivalents Short-term investments Accounts receivable Inventories Total current assets Gross Fixed Assets Less Accumulated Dep Net Fixed Assets Total Assets 2017 2018 $14,000 &718 $71,632 $878,000 S1,716,480 $2,680,112 $1,220,000 $7,282 1). Statement of Cash Flow 2018 $20,000 S632,160 $1,287,360 $1,946,802 $1,202,950 $263,160 2). Free Cash Flow available for 2018 3). Uses of Free Cash Flow for 2018 In your opinion what does this FCF analysis tell you about this firm in 2018 S383,160 S836,840 $3,516,952 S939,790 4) For 2017 and 2018 find the following $2,886,592 Current Ratio Liabilities and equity Accounts payable Notes payable Accruals Total current liabilities |Long-term bonds Total liabilities Common stock Retained earnings Total common equity Total liabilities and equity Debt Ratio S359,800 S300,000 $380,000 S1,039,800 Profit Margin on Sales Return on Total Assets S324,000 $720,000 S284,960 S1,328,960 $1,000,000 $2,328,960 $460,000 $97,632 $557,632 Price/earnings (P/E) Earnings Per Share In addition explain what these financial ratios/analysis tell you about the company. S500,000 $1,539,800 $1,680,936 S296,216 S1,977,152 $3,516,952 $2,886,592 Income Statements 2017 2018 $5,834,400 Net sales Costs of Goods Sold Other Expenses Depreciation Total Operating Cost Earnings before interest and taxes (EBIT) Less interest Earnings before taxes (EBT) Taxes (40%) Net Income S7,035,600 S5,800,000 $612,960 S120,000 $6,532,960 S502,640 $80,000 S422,640 S169,056 $253,584 S4,980,000 $720,000 S116,960 $5,816,960 S17,440 $176,000 (S158,560) ($63,424) (S95,136) Dividends Per Share Book Value Per Share S0.110 $0.220 $5.576 $7.909

Please show the calculation steps, Thank you.

Answer 1

Cash Flow Statement
Indirect Method
Cash Flow from Operating Activities
Profit for the year		$       253,584.00
Adjustments
Depreciation	$     120,000.00
Interest Expense	$       80,000.00
Changes in Current Assets / Current Liabilities
Increase in Inventories	$ (429,120.00)			=1287360-1716480
Increase in Accounts Receivables	$ (245,840.00)			=632160-878000
Increase in Short Term Investments	$     (51,632.00)			=20000-71632
Increase in Accounts Payables	$       35,800.00			=359800-324000
Decrease in Notes Payables	$ (420,000.00)			=300000-720000
Increase in Accruals	$       95,040.00			=380000-284960
Total Adjustments		$     (815,752.00)
Cash from Operating Activities			$      (562,168.00)
Cash flow from Investing Activities
Paid for Purchase of Equipment		$       (17,050.00)		=1202950-1220000
Net cash used In investing activities			$         (17,050.00)
Cash flow from Financing Activities
Repayment of Long Term Bonds		$     (500,000.00)		-500000
Interest Expense		$       (80,000.00)		-80000
Issue of Shares		$    1,220,936.00		=1680936-460000
Ordinary Dividend Paid		$       (55,000.00)		=-(97632+253584-296216)
Net cash used in financing activities			$         585,936.00
Increase in Cash			$             6,718.00
Opening Balance of Cash & Equivalents			$             7,282.00
Ending Balance of Cash & Equivalents			$           14,000.00

Net Working Capital for 2017 = $1946802 - $1328960 = $617842
Net Working Capital for 2018 = $2680112 - $1039800 = $1640312

FCF = EBIT - Taxes + Depreciation & Amortization - Capex – Change in Working Capital
= $502640 - $169056 + $120000 - $17050 - ($1640312 - $617842) = ($585936)