Question

In: Finance

Calculate free cash flow for 2017 for Monarch Textiles, Inc., based on the financial information that...

Calculate free cash flow for 2017 for Monarch Textiles, Inc., based on the financial information that follows. Assume that all current liabilities are non-interest-bearing liabilities and that no fixed assets were sold or disposed of during 2017. (Enter your answer in 1000s.) Monarch Textiles, Inc. ($ thousands) Income statement Selected balance sheet items 2017 2016 2017 Sales 1,430 Current assets 410 565 Cost of sales 810 Net fixed assets 144 288 Operating expenses 155 Current liabilities 255 335 Depreciation 72 Interest expense 50 Earnings before taxes 343.00 Tax 137.20 Net income 205.80

Solutions

Expert Solution

EBIT = EBT + Interest Expense
EBIT = $343.00 + $50.00
EBIT = $393.00

Tax Rate = Tax / EBT
Tax Rate = $137.20 / $343.00
Tax Rate = 40%

Operating Cash Flow = EBIT * (1 - Tax Rate) + Depreciation
Operating Cash Flow = $393.00 * (1 - 0.40) + $72.00
Operating Cash Flow = $307.80

Change in Current Assets = Current Assets, 2017 - Current Assets, 2016
Change in Current Assets = $565 - $410
Change in Current Assets = $155

Change in Current Liabilities = Current Liabilities, 2017 - Current Liabilities, 2016
Change in Current Liabilities = $335 - $255
Change in Current Liabilities = $80

Change in NWC = Change in Current Assets - Change in Current Liabilities
Change in NWC = $155 - $80
Change in NWC = $75

Capital Expenditure = Net Fixed Assets, 2017 - Net Fixed Assets, 2016
Capital Expenditure = $288 - $144
Capital Expenditure = $144

Free Cash Flow = Operating Cash Flow - Change in NWC - Capital Expenditure
Free Cash Flow = $307.80 - $75 - $144
Free Cash Flow = $88.80

jeff jeffy answered 1 week ago
Next > < Previous

Related Solutions

Calculate free cash flow for 2017 for Monarch Textiles, Inc., based on the financial information that...
Calculate free cash flow for 2017 for Monarch Textiles, Inc., based on the financial information that follows. Assume that all current liabilities are non-interest-bearing liabilities and that no fixed assets were sold or disposed of during 2017. (Enter your answer in 1000s.) income statement 2017 sales 1640 cost of sales 880 operating expenses 190 depreciation 86 interest expense 50 earnings befor taxes 434 tax 173.6 net income 260.4 selected balance sheet items 2016 2017 current assets 40 670 net fixed...
Calculate free cash flow for 2017 for Monarch Textiles, Inc., based on the financial information that...
Calculate free cash flow for 2017 for Monarch Textiles, Inc., based on the financial information that follows. Assume that all current liabilities are non-interest-bearing liabilities and that no fixed assets were sold or disposed of during 2017. (Enter your answer in 1000s.) Monarch Textiles, Inc. ($ thousands) Income statement Selected balance sheet items 2017 2016 2017 Sales 1,610 Current assets 470 655 Cost of sales 870 Net fixed assets 168 336 Operating expenses 185 Current liabilities 285 365 Depreciation 84...
Use the Free Cash Flow method of valuation and the following information, to calculate the value...
Use the Free Cash Flow method of valuation and the following information, to calculate the value for a venture with the following information. Expected sales at year zero (or beginning of year 1): $2.50 M; growth rate in sales for the first 8 years: 35%; and for years 9-on: 10%; Annual profit margin (or EBIAT/Sales) for all years=22%; Annual asset intensity ratio (or (FA+WC)/Sales) for all years = 32%; discount rate in years 1-8: 30%, and in years 9-on: 16%....
What is the firm’s free cash flow (i.e., cash flow from assets) for 2017? Cash                             &
What is the firm’s free cash flow (i.e., cash flow from assets) for 2017? Cash                                                                      $423 Accounts Receivable                                            15% of Total Revenue Accounts Payable                                                 20% of Cost of Goods Sold Notes Payable                                                       $800 Inventory                                                              $2,900 Net Fixed Assets                                                   $14,800 Long-term Debt                                                    $3,500 Common Stock                                                     $10,000 Total Revenue                                                      $7,200 Cost of Goods Sold                                               50% of Total Revenue Depreciation Expense                                           $1,200 Selling, General, & Administrative Expense       $1,000 Interest Expense                                                   10% of Long-term Debt Income Taxes                                                       35% of Taxable Income
Baxter International Inc. free cash flow from 2016 was a positive $2,606,000,000 and in 2017 was...
Baxter International Inc. free cash flow from 2016 was a positive $2,606,000,000 and in 2017 was a negative $2,348,000,000. What inference can you draw from the companies' free cash flow for both years. Please explain your rationale for your answer. Exxon Mobil Corp. free cash flow from 2016 was a positive $64,138,000,000 and in 2017 was a positive $52,533,000,000. What inference can you draw from the companies' free cash flow for both years. Please explain your rationale for your answer.
Using the following free cash flow data: Year                Cash Flow 2017                $4,000,000
Using the following free cash flow data: Year                Cash Flow 2017                $4,000,000 2018                $4,400,000 Prepare a 10-year cash flow forecast based upon the rate of growth in cash flow between 2017 and 2018. Calculate the net present value of the forecasted cash flows assuming an immediate investment cost of $18,500,000 Please show your work so I can recreate in excel
The following information was taken from the financial statements of Monarch Resources Inc. for December 31...
The following information was taken from the financial statements of Monarch Resources Inc. for December 31 of the current year: Common stock, $40 par value (no change during the year) $6,400,000 Preferred $10 stock, $200 par (no change during the year) 4,000,000 The net income was $616,000, and the declared dividends on the common stock were $166,400 for the current year. The market price of the common stock is $40 per share. For the common stock, determine (a) the earnings...
Using the information in Exhibit 1 below, calculate North Rock’s Free Cash flow for the year...
Using the information in Exhibit 1 below, calculate North Rock’s Free Cash flow for the year 2019 (in $ millions). Exhibit 1 North Rock Selected Financial Information for the 2019 Period (All amounts are in $ millions except where stated) Current EBIT (2019) $350.00 Interest Expense $8.45 Interest Paid $8.45 Dividends Paid $2.11 Tax rate (%) 35 Increase (Decrease) in accounts receivable $15.80 Increase (Decrease) in accounts payable $(10.25) I ncrease (Decrease) in inventory $17.98 Fixed Capital Investment $25.50 Debt...
Utilizing the free cash flow(FCF)approach and the information stated below please calculate the value of a...
Utilizing the free cash flow(FCF)approach and the information stated below please calculate the value of a Lincroft Music’s common stock: •Market value of senior debt = $68,500,000 •Market value of junior debt = $39,500,000 •Shares of common stock outstanding = 2,000,000 •Growth rate of 15% for 3 years, followed by a 7.5% annual growth rate, thereafter •Estimated WACC (discount rate) of 10% •Last year's FCF = $4,200,000
Given the following information: Year 1 free cash flow: 40 million Year 2 free cash flow...
Given the following information: Year 1 free cash flow: 40 million Year 2 free cash flow 90 million Year 3 free cash flow 100 million After year 3, expected FCF growth is expected to be 4% The cost of capital is 9% Short term investments is 50 million Debt is currently 25 million Preferred shock is 5 million There are 20 million outstanding stock shares. 1. Calculate the intrinsic stock price . If the current stock price was $100.00, would...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT