You are considering an investment in Fields and Struthers, Inc.and want to evaluate the firm’s...

You are considering an investment in Fields and Struthers, Inc. and want to evaluate the firm’s free cash flow. From the income statement, you see that Fields and Struthers earned an EBIT of $70 million, had a tax rate of 34 percent, and its depreciation expense was $7 million. Fields and Struthers’ gross fixed assets increased by $36 million from 2017 to 2018. The firm’s current assets increased by $32 million and spontaneous current liabilities increased by $18 million.

Calculate Fields and Struthers’ operating cash flow for 2018.

Calculate Fields and Struthers’ investment in operating capital for 2018.

Calculate Fields and Struthers’ free cash flow for 2018.

Expert Solution

jeff jeffy answered 2 years ago

You are considering an investment in Fields and Struthers, Inc., and want to evaluate the firm’s...

You are considering an investment in Fields and Struthers, Inc., and want to evaluate the firm’s free cash flow. From the income statement, you see that Fields and Struthers earned an EBIT of $82 million, had a tax rate of 30 percent, and its depreciation expense was $9 million. Fields and Struthers’ gross fixed assets increased by $48 million from 2014 and 2015. The firm’s current assets increased by $36 million and spontaneous current liabilities increased by $24 million. What...

You are considering an investment in Fields and Struthers, Inc. and want to evaluate the firm’s...

You are considering an investment in Fields and Struthers, Inc. and want to evaluate the firm’s free cash flow. From the income statement, you see that Fields and Struthers earned an EBIT of $78 million, had a tax rate of 30 percent, and its depreciation expense was $9 million. Fields and Struthers’ gross fixed assets increased by $44 million from 2017 to 2018. The firm’s current assets increased by $32 million and spontaneous current liabilities increased by $22 million. Calculate...

ou are considering an investment in Fields and Struthers, Inc. and want to evaluate the firm’s...

ou are considering an investment in Fields and Struthers, Inc. and want to evaluate the firm’s free cash flow. From the income statement, you see that Fields and Struthers earned an EBIT of $64 million, had a tax rate of 30 percent, and its depreciation expense was $5 million. Fields and Struthers’ gross fixed assets increased by $30 million from 2017 to 2018. The firm’s current assets increased by $26 million and spontaneous current liabilities increased by $15 million. Calculate...

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