0 1 point Question 19 Revenue EBITDA EBIT Statutory Tax Rate Interest Expense Pr

Question

0 1 point Question 19 Revenue EBITDA EBIT Statutory Tax Rate Interest Expense Pre-tax Income Taxes Net Income 4,578 1,750 1,320 25% 300 1,020 357 663 2009 2010 Year NWC Level from balance shect Net Fixed Assets 3,600 3,900 120,052 120,342 The first table shows numbers for 2010. Calculate this company's 2010 Free Cash Flow to Equity (if you were an equity holder in the firm, how much money would you have available to take as dividends, buy back stock, and/or pay off principal on borrowings) given the Net Working Capital levels shown. Format $1,234 as $1234 Answer 698% (73)

Explanation / Answer

Free Cash Flow = Net Income + Depreciation - WCInv - FCInv

Here, Depreciation = 1750 - 1320 = 430

WCInv = Change in NWC = 3,900 - 3,600 = 300

FCInv = Change in Net Fixed Assets = 120,342 - 120,052 = 290

=> FCF = 663 + 430 - 300 - 290 = 503

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