Assume today is December 31st, 2020 (Year 0). Star Enterprise had sales of $200 million...
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Assume today is December 31st, 2020 (Year 0). Star Enterprise had sales of $200 million in 2020 (i.e., Sales0 = $200 million). Star Enterprise has come up with the following revenues and expenses forecasts for the next year. Assuming 30% corporate tax rate, estimate next years FCF for Star Enterprise.
| Sales growth | 10% |
| EBIT | 20% of sales |
| Depreciation | 10% of sales |
| Capital expenditure | 8% of sales |
| Increases in net working capital | 10% of any increase in sales |
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