Firm X is considering performing a considerable investment in year 2015. Use the
ID: 2647993 • Letter: F
Question
Firm X is considering performing a considerable investment in year 2015. Use the following Pro-Forma Financial Statements for 2015-2019 to forecast the future Free Cash Flow and estimated the value of firm X from performing these investments.
Income Statement:
2015
2016
2017
2018
2019
Sales
85,003
95,530
106,616
118,281
130,567
Costs except Depr.
-66,301
-74,512
-83,158
-92,258
-101,840
EBITDA
18,702
21,018
23,457
26,024
28,727
Depreciation
-3,209
-3,448
-3,676
-3,892
-4,097
EBIT
15,493
17,570
19,781
22,132
24,629
Interest Expense (net)
-70
-560
-560
-560
-560
Pretax Income
15,423
17,010
19,221
21,572
24,069
Income Tax
-6,169
-6,804
-7,689
-8,629
-9,628
Net Income
9,254
10,206
11,533
12,943
14,442
Working Capital
2015
2016
2017
2018
2019
Total Current Assets
46,751
52,541
58,638
65,054
71,811
Total Current Liabilities
13,600
15,284
17,058
18,924
20,890
Net Working Capital
33,151
37,257
41,580
46,130
50,921
Increase in Net Working Capital
3,944
4,106
4,323
4,550
4,791
Fixed Assets & Capit Investm
2015
2016
2017
2018
2019
Opening Book Value
52,173
60,964
65,516
69,840
73,948
Capital Investment
12,000
8,000
8,000
8,000
8,000
Depreciation
(3,209)
(3,448)
(3,676)
(3,892)
(4,097)
Closing Book Value
60,964
65,516
69,840
73,948
77,851
1. What is the forecast value for Free Cash Flows of Firm X on 2015?
a)-5,439
b) -3,439
c) -1,439
d) 1,439
Income Statement:
2015
2016
2017
2018
2019
Sales
85,003
95,530
106,616
118,281
130,567
Costs except Depr.
-66,301
-74,512
-83,158
-92,258
-101,840
EBITDA
18,702
21,018
23,457
26,024
28,727
Depreciation
-3,209
-3,448
-3,676
-3,892
-4,097
EBIT
15,493
17,570
19,781
22,132
24,629
Interest Expense (net)
-70
-560
-560
-560
-560
Pretax Income
15,423
17,010
19,221
21,572
24,069
Income Tax
-6,169
-6,804
-7,689
-8,629
-9,628
Net Income
9,254
10,206
11,533
12,943
14,442
Explanation / Answer
my idea is
b) -3,439
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