Question

The following are BAC Bhd.’s year end statement of financial position and statement of profit and loss for 2016 and 2017:

	2017 ($)	2016 ($)		2017 ($)	2016 ($)
Non Current Assets:			total non current liabilities	410769	372931
Gross Non Current assets	317,503	232,179	current liabilities
Less accumulated depreciation	54,045	34,187	short term borrowings	288798	296149
Net Non Current assets	263,458	197,992	A/P	636318	414611
Current Assets:			accruals	106748	103362
cash and equivalents	208323	102024	total Current libilities	1031864	814122
A/R	690294	824979	total liabilities	1442633	1187053
inventories	942374	715414	shareholder equity
total Current assets	1840991	1642417	common stock(100000 sahres)	550000	550000
total assets	2104449	1840409	retaines earning	111816	103356
noncurrent liabilities			total shareholder equity	661816	653356
long term debt	410769	372931	total liabilities and share holder equity	2104449	1840409

	2017 ($)	2016 ($)
Sales	2,325,967	2,220,607
(-) Cost of goods sold	1,869,326	1,655,827
Other expenses	287,663	273,870
Total operating costs excluding depreciation and amortization	2,156,989	1,929,697
Depreciation and amortization	25,363	26,341
Total operating costs	2,182,352	1,956,038
EBIT	143,615	264,569
(-) Interest expense	31,422	13,802
EBT	112,193	250,767
(-) Taxes (30%)	33,658	75,230
Net income	78,535	175,537

Related items:

2017 Total dividends paid $70,075 ,   Stock price per share $15.60

2016 Total dividends paid $15.60 ,   Stock price per share $21.80

Required:

1. Calculate the after tax operating income (i.e. after-tax EBIT) for 2016 and 2017.   
2. Calculate the net working capital (NWC) that is supported by non-free sources for 2016 and 2017, and the changes in NWC between these two years.                             
3. What is free cash flow (FCF)? Calculate the FCF for 2017. Is a negative FCF always a bad sign?   
4. Calculate the following for the company for 2017:
   1. Earnings per share   
   2. Dividends per share   
   3. Book value per share

Answer 1

Answer:-

	2017 ($)	2016 ($)			2017 ($)	2016 ($)
Non Current Assets:				Sales	2,325,967.00	2,220,607.00
Gross Non Current assets	317,503.00	232,179.00		(-) Cost of goods sold	1,869,326.00	1,655,827.00
Less accumulated depreciation	54,045.00	34,187.00		Other expenses	287,663.00	273,870.00
Net Non Current assets	263,458.00	197,992.00		Total operating costs excluding depreciation and amortization	2,156,989.00	1,929,697.00
Current Assets:				Depreciation and amortization	25,363.00	26,341.00	E
cash and equivalents	208,323.00	102,024.00		Total operating costs	2,182,352.00	1,956,038.00
A/R	690,294.00	824,979.00		EBIT	143,615.00	264,569.00	B
inventories	942,374.00	715,414.00		(-) Interest expense	31,422.00	13,802.00
total Current assets	1,840,991.00	1,642,417.00		EBT	112,193.00	250,767.00
total assets	2,104,449.00	1,840,409.00	O	(-) Taxes (30%)	33,658.00	75,230.00
noncurrent liabilities				Net income	78,535.00	175,537.00	L
long term debt	410,769.00	372,931.00
total non current liabilities	410,769.00	372,931.00		Ans to a	2017 ($)	2016 ($)
current liabilities				EBIT	143,615.00	264,569.00	B
short term borrowings	288,798.00	296,149.00		(-) Taxes (30%)	43,084.50	79,370.70	C=B*30%
A/P	636,318.00	414,611.00		after tax operating income (i.e. after-tax EBIT)	100,530.50	185,198.30	D=B-C
accruals	106,748.00	103,362.00
total Current labilities	1,031,864.00	814,122.00
total liabilities	1,442,633.00	1,187,053.00	P
shareholder equity
common stock(100000 shares)	550,000.00	550,000.00
retained earning	111,816.00	103,356.00
total shareholder equity	661,816.00	653,356.00
total liabilities and share holder equity	2,104,449.00	1,840,409.00
Ans to b	2017 ($)	2016 ($)
total Current assets	1,840,991.00	1,642,417.00
Less: cash	208,323.00	102,024.00
Non Cash Current Assets	1,632,668.00	1,540,393.00
total Current labilities	1,031,864.00	814,122.00
Non cash Net Working Capital	600,804.00	726,271.00
Changes in Non cash Net Working Capital	(125,467.00)		A
Ans to c
What is free cash flow (FCF)?
Free cash flow to the firm (FCFF) represents the amount of cash flow from operations available for distribution after depreciation expenses, taxes, working capital, and investments are accounted for and paid.
FCFF is essentially a measurement of a company's profitability after all expenses and reinvestments. It is one of the many benchmarks used to compare and analyze a firm's financial health.
FCF formula=	After Tax EBIT+ Depreciation Expense- Capital Expenditures- Changes in Net Working Capital
After-tax EBIT	100,530.50	D		Capital Expenditures
Depreciation and amortization	25,363.00	E		Opening Gross Value (2016):	232,179.00	F
Capital Expenditures	90,829.00	J		Less: Accumulated Depreciation (2016)	34,187.00	G
Changes in non cash Net Working Capital	(125,467.00)	A		Less: Depreciation and amortization (2017)	25,363.00	E
FCF	160,531.50	K=D+E-J-A		Net Book Value	172,629.00	H=F-G-E
				Net Book Value (2017) given in Balance Sheet	263,458.00	I
Ans to d	2017 ($)			Capital Expenditures	90,829.00	J=I-H
Net income	78,535.00	L
Dividend paid	70,075.00	M
Book Value	661,816.00	N=O-P
Number of shares	100,000.00	Q
Earnings per share	0.79	R=L/Q
Dividends per share	0.70	S=M/Q
Book value per share	6.62	T=N/Q

if you have any query please ask me in comment box i am here to helps you don't give direct Thumbs down.if you satisfied my work give Thumbs UP

*******THANK YOU*******