8. Anaiyzing accounting data for managerial decisions Accounting data is used to generate a firm's financial statements, but a firm's intrinsic value is based on its free cash flows, which are the cash flows available for distribution to the company's investors after the company has made all of the investments necessary to sustain its ongoing operations. Consider the following case: 3sH Corp. tecently hired Jeffery. His immediate mandate was to analyze the company. He has to submit a report on the company's operational effiency and estimate its potential investment in working capital. He has the income statement from last year and the following information from the company's financial reports as well as some industry averages. - Last year, 38r Corp, reported a book value of $750,000 in current assets, of which 40% is cash, 42% is short-term investments, and the rest is accounts receivable and inventory. - The compsny reported 4637,500 of current liabilities including accounts payable and accruals. Interestingly, the company had no notes payable outstanding, and there were ne changes in the company's accounts payable during the year. - The company, however, inveited heavily in plant and equipment to support its operations. It reported a book value of $1,200,000 for its operating long-term assets last year. Income Statement For the Year Ended on December 31 Based on the information given to him, Jeffery submits a report on January 1 with some important calculations for management to use, both for analysis and to devise an action plan. Complete the following statements in his report. If your answer is negative, use the minus sign. Statement 1: 18iH Corpi's NOPAT is . which is 1 average of Statement w2: The company is using Statement \#3: 38 H Corp. is generating in net nd an accounting profit of Statement \#4: The firm uses of total net opere 5. This value is computed as the of 38H Corp.'s net operating working capital and its Inrame Statement For the Year Ended on December 31 Based on the information given to him, Jeffery submits a report on January 1 with some important calculations for management to use, bo analysis and to devise an action plan. Complete the following statements in his report. If your answer is negative, use the minus sign. 1: J\&H Corp.'s NOPAT is , which is than the industry average of 2: The company is using in net operating working capital (NOWC). 3: 38H Corp, is generating in net cash flow from its operations and an accounting profit of 4: The firm uses of total net operating capital to run the business. This value is computed as the of J8H Corp.'s net operating working capital and its 8. Anaiyzing accounting data for managerial decisions Accounting data is used to generate a firm's financial statements, but a firm's intrinsic value is based on its free cash flows, which are the cash flows available for distribution to the company's investors after the company has made all of the investments necessary to sustain its ongoing operations. Consider the following case: 3sH Corp. tecently hired Jeffery. His immediate mandate was to analyze the company. He has to submit a report on the company's operational effiency and estimate its potential investment in working capital. He has the income statement from last year and the following information from the company's financial reports as well as some industry averages. - Last year, 38r Corp, reported a book value of $750,000 in current assets, of which 40% is cash, 42% is short-term investments, and the rest is accounts receivable and inventory. - The compsny reported 4637,500 of current liabilities including accounts payable and accruals. Interestingly, the company had no notes payable outstanding, and there were ne changes in the company's accounts payable during the year. - The company, however, inveited heavily in plant and equipment to support its operations. It reported a book value of $1,200,000 for its operating long-term assets last year. Income Statement For the Year Ended on December 31 Based on the information given to him, Jeffery submits a report on January 1 with some important calculations for management to use, both for analysis and to devise an action plan. Complete the following statements in his report. If your answer is negative, use the minus sign. Statement 1: 18iH Corpi's NOPAT is . which is 1 average of Statement w2: The company is using Statement \#3: 38 H Corp. is generating in net nd an accounting profit of Statement \#4: The firm uses of total net opere 5. This value is computed as the of 38H Corp.'s net operating working capital and its Inrame Statement For the Year Ended on December 31 Based on the information given to him, Jeffery submits a report on January 1 with some important calculations for management to use, bo analysis and to devise an action plan. Complete the following statements in his report. If your answer is negative, use the minus sign. 1: J\&H Corp.'s NOPAT is , which is than the industry average of 2: The company is using in net operating working capital (NOWC). 3: 38H Corp, is generating in net cash flow from its operations and an accounting profit of 4: The firm uses of total net operating capital to run the business. This value is computed as the of J8H Corp.'s net operating working capital and its
