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Quantitative Problem: Rosnan Industries' 2013 and 2012 balance sheets and income statements are shown below. Balance...

Quantitative Problem: Rosnan Industries' 2013 and 2012 balance sheets and income statements are shown below.

Balance Sheets:
2013 2012
Cash and equivalents $100   $85  
Accounts receivable 275   300  
Inventories 375   250  
      Total current assets $750   $635  
Net plant and equipment 2,300   1,490  
Total assets $3,050   $2,125  
Accounts payable $150   $85  
Accruals 75   50  
Notes payable 150   75  
      Total current liabilities $375   $210  
Long-term debt 450   290  
Common stock 1,225   1,225  
Retained earnings 1,000   400  
Total liabilities and equity $3,050   $2,125  
Income Statements:
2013 2012
Sales $2,200   $1,200  
Operating costs excluding depreciation 1,250   1,000  
EBITDA $950   $200  
Depreciation and amortization 100   75  
EBIT $850   $125  
Interest 62   45  
EBT $788   $80  
Taxes (40%) 315   32  
Net income $473   $48  
Dividends paid $53   $48  
Addition to retained earnings $600   $0  
Shares outstanding 100   100  
Price $25.00   $22.50  
WACC 10.00%     

The balance in the firm's cash and equivalents account is needed for operations and is not considered "excess" cash.

Using the financial statements given above, what is Rosnan's 2013 free cash flow (FCF)? Use a minus sign to indicate a negative FCF.
$  

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jeff jeffy answered 2 years ago
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