The following are BAC Bhd.’s year end statement of financialposition and statement of profit and loss for 2016 and 2017:
2017 ($) 2016 ($)
Non Current Assets:   
Gross Non Current assets 317,503 232,179
Less accumulated depreciation 54,045 34,187
Net Non Current assets 263,458 197,992
Current Assets:
ICLBAT/JANUARY2019
7

Cash and equivalents 208,323 102,024
Accounts receivable 690,294 824,979
Inventories 942,374 715,414
Total Current Aassets 1,840,991 1,642,417
Total Assets 2,104,449 1,840,409
Non Current Liabilities   
Long term debt 410,769 372,931
Total Non Current Liabilities 410,769 372,931
Current Liabilites   
Short term borrowings 288,798 296,149
Accounts payable 636,318 414,611
Accruals 106,748 103,362
Total Current Liabilities 1,031,864 814,122
Total Liabilities 1,442,633 1,187,053
Shareholders’ Equity   
Common stock (100,000 shares) 550,000 550,000

Retained earnings 111,816 103,356
Total Shareholders’ Equity 661,816 653,356
Total Liabilities and Shareholders’ Equity 2,104,4491,840,409






  
ICLBAT/JANUARY2019
8


2017 ($) 2016 ($)
Sales 2,325,967 2,220,607 (-) Cost of goods sold 1,869,3261,655,827 Other expenses 287,663 273,870 Total operating costsexcluding depreciation and amortization 2,156,989 1,929,697Depreciation and amortization 25,363 26,341 Total operating costs2,182,352 1,956,038 EBIT 143,615 264,569 (-) Interest expense31,422 13,802 EBT 112,193 250,767 (-) Taxes (30%) 33,658 75,230 Netincome 78,535 175,537

Related items:
2017 2016 Total dividends paid $70,075 $150,000 Stock price pershare $15.60 $21.80

Required:
(a) Calculate the after tax operating income (i.e. after-tax EBIT)for 2016 and 2017.

(b) Calculate the net working capital (NWC) that is supported bynon-free sources for 2016 and 2017, and the changes in NWC betweenthese two years.

(c) What is free cash flow (FCF)? Calculate the FCF for 2017. Is anegative FCF always a bad sign?

(d) Calculate the following for the company for 2017: (i) Earningsper share (1 mark) (ii) Dividends per share (1 mark) (iii) Bookvalue per share (1 mark) (Total: 15 marks)