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A recent annual income statement for Stone Creek Roofing is shown below. Net sales $5,000 Cost of sales 3,200 Gross profit 1,800 Operating expense 800
A recent annual income statement for Stone Creek Roofing is shown below.
Net sales | $5,000 | |
Cost of sales | 3,200 | |
Gross profit | 1,800 | |
Operating expense | 800 | |
Depreciation expense | 200 | |
Operating income | 800 | |
Interest expense | 100 | |
Income before tax | 700 | |
Tax | 175 | |
Income after tax | $ | 525 |
Assume that during the year, Stone Creek spent $180 on new capital equipment and increased current assets net of non-interest-bearing current liabilities by $120. What was Stone Creeks free cash flow in this year?
$425 | ||
$500 | ||
$700 | ||
$725 | ||
$740 | ||
None of the options are correct. |
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