An analyst is trying to value Jasons Specialties (JS) stock. The analyst has collected data from the company and other sources to prepare the below financials, both actual and projected. Based upon these sources, the analyst expects the companys free cash flows to grow at 4% on average. The analyst has estimated the companys cost of capital (WACC) to be 16% and its cost of equity to be 21%. The risk-free rate is 2.3%..

1. Which items listed under Current Assets and Current Liabilities are typically excluded from NOWC? What is JSs NOWC in years 2019 and 2020?

ncome statement for the fiscal year ending January 1 (Millions of dollars)

2019 (Actual)		2020 (Projected)
Net Sales	$400.0		$430.0
Costs	260.0		283.5
Depreciation	37.5		42.5
Earnings before interest and taxes	102.5		104.0
Interest expense	14.1		16.0
Earnings before taxes	88.4		89.9
Taxes (40%)	35.36		35.2
Net income before preferred dividends	53.04		52.8
Preferred dividends	6.0		6.5
Net income	47.04		46.3
Common dividends	37.632		38.2
Addition to retained earnings	9.0408		8.1

Balance sheets for the fiscal year ending January 1 (Millions of dollars)

2019 (Actual)		2020 (Projected)
Cash	$6.3		$3.6
Marketable Securities	40.9		39.128
Accounts Receivable	62.0		67.0
Inventories	107.0		105.5
Net plant & equipment	391.0		415.36
Total Assets	607.2		630.58
Accounts payable	9.6		12.1
Accruals	25.5		29.1
Long-term bonds	210.7		217.78
Preferred Stock	55		57.1
Common Stock (Par plus PIC)	160.0		160.0
Retained earnings	146.4		154.5
Total Liabilities & Equity	607.2		630.58