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Finding operating and free cash flows Consider the balance sheets and selected data from the income statement of Keith Corporation that follow a. Calculate the firm's net operating profit after taxes (NOPAT) for the year ended December 31, 2019. b. Calculate the firm's operating cash flow (OCF) for the year ended December 31, 2019. Data table c. Calculate the firm's free cash flow (FCF) for the year ended December 31, 2019. d. Interpret, compare and contrast your cash flow estimate in parts (b) and (c). () Assets Cash a. The net operating profit after taxes is $. (Round to the nearest dollar.) Marketable securities Accounts receivable Inventories Total current assets Gross fixed assets 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 eamings Total stockholders' equity December 31 $1,510 1,790 1,970 2,860 $8,130 $29,510 14,670 $14,840 $22,970 $1,610 2,760 190 $4,560 $5,020 $9,580 $9,950 3,440 $13,390 2019 2018 $1.020 1.230 1.840 2.770 $6,860 $28,080 13.060 $15.020 $21.880 $1,470 2.220 330 $4,020 $5,120 $9,140 $9,950 2,790 $12.740 - X Data table Total assets $22,970 $21,880 Liabilities and Stockholders' Equity Accounts payable $1,610 $1,470 Notes payable 2,760 2,220 Accruals 190 330 Total current liabilities $4,560 $4,020 Long-term debt $5,020 $5,120 Total liabilities $9,580 $9,140 Common stock $9,950 $9,950 Retained earnings 3,440 2,790 Total stockholders' equity $13,390 $12,740 Total liabilities and stockholders' equity $22,970 $21,880 (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Income Statement Data (2019) Depreciation expense $1,610 2,720 Earnings before interest and taxes (EBIT) Interest expense 366 Net profits after taxes 1,860 Tax rate 21% I X Cash budget-Basic Grenoble Enterprises had sales of $50,000 in March and $60,200 in April. Forecast sales for May, June, and July are $69,700, $79,800, and $100,400, respectively. The firm has a cash balance of $4,700 on May 1 and wishes to maintain a minimum cash balance of $4,700. Given the following data, prepare and interpret a cash budget for the months of May, June, and July. (1) The firm makes 22% of sales for cash, 59% are collected in the next month, and the remaining 19% are collected in the second month following sale. (2) The firm receives other income of $2,100 per month. (3) The firm's actual or expected purchases, all made for cash, are $49,500, $70,400, and $79,800 for the months of May through July, respectively. (4) Rent is $2,700 per month. (5) Wages and salaries are 10% of the previous month's sales. (6) Cash dividends of $3,500 will be paid in June. (7) Payment of principal and interest of $3,600 is due in June. (8) A cash purchase of equipment costing $6,300 is scheduled in July. (9) Taxes of $6,000 are due in June. Complete the first month of the cash budget for Grenoble Enterprises below: (Round to the nearest dollar. Please input all the values in the table before checking your answers.) March May April 50,000 $ 60,200 $ 69,700 Sales Cash sales Lag 1 month 11,000 13,244 Lag 2 months Other income Total cash receipts $ GA EA EA CA SA Finding operating and free cash flows Consider the balance sheets and selected data from the income statement of Keith Corporation that follow a. Calculate the firm's net operating profit after taxes (NOPAT) for the year ended December 31, 2019. b. Calculate the firm's operating cash flow (OCF) for the year ended December 31, 2019. Data table c. Calculate the firm's free cash flow (FCF) for the year ended December 31, 2019. d. Interpret, compare and contrast your cash flow estimate in parts (b) and (c). () Assets Cash a. The net operating profit after taxes is $. (Round to the nearest dollar.) Marketable securities Accounts receivable Inventories Total current assets Gross fixed assets 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 eamings Total stockholders' equity December 31 $1,510 1,790 1,970 2,860 $8,130 $29,510 14,670 $14,840 $22,970 $1,610 2,760 190 $4,560 $5,020 $9,580 $9,950 3,440 $13,390 2019 2018 $1.020 1.230 1.840 2.770 $6,860 $28,080 13.060 $15.020 $21.880 $1,470 2.220 330 $4,020 $5,120 $9,140 $9,950 2,790 $12.740 - X Data table Total assets $22,970 $21,880 Liabilities and Stockholders' Equity Accounts payable $1,610 $1,470 Notes payable 2,760 2,220 Accruals 190 330 Total current liabilities $4,560 $4,020 Long-term debt $5,020 $5,120 Total liabilities $9,580 $9,140 Common stock $9,950 $9,950 Retained earnings 3,440 2,790 Total stockholders' equity $13,390 $12,740 Total liabilities and stockholders' equity $22,970 $21,880 (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Income Statement Data (2019) Depreciation expense $1,610 2,720 Earnings before interest and taxes (EBIT) Interest expense 366 Net profits after taxes 1,860 Tax rate 21% I X Cash budget-Basic Grenoble Enterprises had sales of $50,000 in March and $60,200 in April. Forecast sales for May, June, and July are $69,700, $79,800, and $100,400, respectively. The firm has a cash balance of $4,700 on May 1 and wishes to maintain a minimum cash balance of $4,700. Given the following data, prepare and interpret a cash budget for the months of May, June, and July. (1) The firm makes 22% of sales for cash, 59% are collected in the next month, and the remaining 19% are collected in the second month following sale. (2) The firm receives other income of $2,100 per month. (3) The firm's actual or expected purchases, all made for cash, are $49,500, $70,400, and $79,800 for the months of May through July, respectively. (4) Rent is $2,700 per month. (5) Wages and salaries are 10% of the previous month's sales. (6) Cash dividends of $3,500 will be paid in June. (7) Payment of principal and interest of $3,600 is due in June. (8) A cash purchase of equipment costing $6,300 is scheduled in July. (9) Taxes of $6,000 are due in June. Complete the first month of the cash budget for Grenoble Enterprises below: (Round to the nearest dollar. Please input all the values in the table before checking your answers.) March May April 50,000 $ 60,200 $ 69,700 Sales Cash sales Lag 1 month 11,000 13,244 Lag 2 months Other income Total cash receipts $ GA EA EA CA SA

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