70.2K

Verified Solution

Link Copied!

Finding operating and free cash flows Consider the balance sheets and selected data from the income statement of Keith Corporation that follow B a. Calculate the firm's net operating profit after taxes (NOPAT) for this year. b. Calculate the firm's operating cash flow (OCF) for the year. c. Calculate the firm's free cash flow (FCF) for the year. d. Interpret, compare and contrast your cash flow estimate in parts (b) and (c). Keith Corporation Balance Sheets December 31 Assets This year Last year Cash $1,460 $1,040 Marketable securities 1,790 1,250 Accounts receivable 2,020 1,810 Inventories 2,860 2,760 Total current assets $8,130 $6,860 Gross fixed assets $29,480 $28,150 Less: Accumulated depreciation 14,660 13,110 Net fixed assets $14,820 $15,040 Total assets $22,950 $21,900 Liabilities and Stockholders' Equity Accounts payable $1,590 $1,480 Notes payable 2,850 2,230 Accruals 180 330 Total current liabilities $4,620 $4,040 Long-term debt $4,920 $5,020 Total liabilities $9,540 $9,060 Common stock $10,030 $10,030 Retained earnings 3,380 2,810 Total stockholders' equity $13,410 $12,840 14,660 $14,820 $22,950 13,110 $15,040 $21,900 Less: Accumulated depreciation Net fixed assets Total assets Liabilities and Stockholders' Equity Accounts payable Notes payable Accruals Total current liabilities Long-term debt Total liabilities Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $1,590 2,850 180 $4,620 $4,920 $9,540 $10,030 3,380 $13,410 $22,950 $1,480 2,230 330 $4,040 $5,020 $9,060 $10,030 2,810 $12,840 $21,900 (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Income Statement Data (This year) Depreciation expense Earnings before interest and taxes (EBIT) Interest expense Net profits after taxes Tax rate $1,550 2,730 372 1,863 21%

Answer & Explanation Solved by verified expert

See Answer