Accounting for Financial Management: Free Cash Fow The focus on tradtional financiat statements is : dota rather than cash flow. However, cash fiow is important to investors, managers, and stock analysts. Therefore, decision makers and security analysts need to modify financial statement data provided to them. An important modification is the concept of free cash flow (FCF). Many analysts regard FCF as being the single and most important number that can be developed from the income statements, even more important than net income. The equation for free cash flow is: FCF - EBst(1-T) - Net investment in Operating Capital cash fow is the cash flow actually avaitable for payments to al investors (atockholders and debtholders) after the company has mode inventments in fixed assets, new products, and . A negative FCF means that the company does not have sufficient - Svwa. B funds to finance its investments in faced assets and working capital, and that it wal have to raise new money in the markets to poy for these investments. Negative FCF is not always bod. If FLF is negative because after-tax operating income is negative this is bod, because the company is probably experiencing operating problems. Exceptions to this might be startup companies, companies incurring vgnificant expenses to launch a new product ine, and high-growth companios-with large capetal investments. Quantitative Problemt Rosnan Industries' 2018 and 2017 balance theets and income stotements are shown below. Quantitative Problem: Rosnan Industries' 2018 and 2017 balance sheets and income statements are shown below. Income Statements: The balance in the firm's cash and equivaients account is needed for operabions and is not considered "excess" caik. Using the financal statements glven above, what is Rosnan's 2018 free cash flow (FCF)? Cash outfow, if any, should be indicoted by a minus sign. Round your answer to the neare. doliat