Calculation of Free Cash Flow From Balance Sheet And Income Statements

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Question

Use the financial statements for Widget Corp and find the FCF.

Balance Sheets Widget Corp. (In Millions of Dollars) (Winter 2013)

Assets	2013	2012	Liabilities and Equity	2013	2012
Cash	$100	$80	Accounts Payable	$50	$40
Short-term Investments	10	10	Notes Payable	$200	$180
Accounts Receivable	$400	$380	Accruals	$190	$150
Inventories	$450	$490	Total Current Liabilities	$440	$370
Total Current Assets	$960	$960
Net Plant and Equipment	$1065	$965	Long-term Debt	$400	$650
			Total Debt	$840	$1,020
			Common Stock (50 mill)	$485	$500
			Retained Earnings	$700	$405
			Total Common Equity	$1,185	$905
Total Assets	$2,025	$1,925	Total Liabilities and Equity	$2,025	$1925

Income Statements Widget Corp (In Millions of Dollars) (Winter 2013)

	2013	2012
Total Revenue	$4000	$3500
Operating Expenses	$3000	$2900
EBITDA	$1000	$600
Depreciation	$200	$170
Amortization	$100	$90
Depreciation and Amortization	$300	$260
EBIT (Operating Income)	$700	$340
Less Interest	$125	$115
EBT	$575	$225
Less Taxes (40%)	$230	$90
Net Income before preferred dividends	$345	$135
Preferred Dividends	$20	$20
Net Income	$325	$115
Common Dividends	$160	$110
Additions to Retained Earnings	$165	$5

Summary

The question belongs to Finance and it is about finding the FCF or Free Cash Flow from the balance sheet and income statements given in the question. The calculations have been given in the solution in detail.

Total Word Count 199

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