Question

What is the company’s Free Cash Flow (FCF)? Use the information to answer the following questions.

XXX, Inc.

Balance Sheet

	2008	2007		2008	2007
Cash	450	200	Accounts Payable	1700	1500
Accounts Receivable	3600	2500	Notes Payable	1200	500
Inventory	3200	2000	Total CL	2900	2000
Total CA	7250	4700	Long Term Debt	3970	2000
Gross Fixed Assets	7200	5500	Common Stock	3100	3000
Less Acc. Depreciation	1400	1200	Retained Earnings	3080	2000
Net Fixed Assets	5800	4300	Total Equities	6180	5000
Total Assets	13050	9000	Total Liab. & O.E.	13050	9000

XXX, Inc.

Income Statement

	2008
EBITDA	3300
Depreciation	200
EBIT	3100
Interest Expense	300
EBT	2800
Taxes	1120
Net Income	1680
Dividend Paid	600

What is the 2008 Net Operating Working Capital? What is the 2007 NOWC?

Select one:

a. 2350; 1200

b. 4350; 2700

c. 6660; 4200

d. 1150; 700

e. 5550; 3200

Question 5

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Continued from previous question. What is the 2008 Free Cash Flow?

Select one:

a. +1990

b. -1990

c. -1590

d. +1590

e. -2400

Question 6

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Continued from previous question. What is the 2008 total invested capital? What is the 2007 TIC?

Select one:

a. 12210; 8500

b. 9550; 6700

c. 10150; 7000

d. 11350; 7500

e. 8350; 6200

Question 7

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Continued from previous question. Assume the after-tax cost of capital is 10%. What is the 2008 EVA?

Select one:

a. +1680

b. + 725

c. +1125

d. -1125

e. - 725

Answer 1

Detailed answer is provided in the hand written notes below.