Calculate 2020 and 2021 net operating working capital (NOWC) and 2021 free cash flow (FCF). Assume the firm has no excess cash. PLS HELP WITH C-F
a. Sales for 2021 were $432,650,000, and EBITDA was 15% of sales. Furthermore, depreciation and amortization were 19% of net fixed assets, interest was $8,393,000, the corporate tax rate was 25%, and Laiho pays 47.25% of its net income as dividends. Given this information, construct the firm's 2021 income statement. Laiho Industries: Income Statement for Year Ending December 31, 2021 (thousands of dollars) 2021 Sales $ 432,650 Operating costs excluding depreciation and amortization 367,753 EBITDA $ 64,898 Depreciation and amortization 13,489 EBIT $ 51,408 8,393.00 Interest EBT 43,015 10,754 Taxes (25%) Net income $ 32,261 Common dividends 15,243 Addition to retained earnings 17,018 Laiho Industries: Statement of Cash Flows for 2021 (thousands of dollars) 2021 Operating Activities Net income $ 32,261 Depreciation and amortization Increase in accounts payable 13,489 7,601 7,023 -17,951 Increase in accruals Increase in accounts receivable Increase in inventories -3,023 $ 39,400 $ -40,101 Net cash provided by operating activities Investing Activities Additions to property, plant, and equipment Net cash used in investing activities Financing Activities Increase in notes payable Increase in long-term debt $ -40,101 $ 2,610 12,400 12,500 -15,243 Increase in common stock Payment of common dividends $ 12,267 Net cash provided by financing activities Summary Net increase/decrease in cash $ 11,566 Cash at the beginning of the year 89,860 Cash at the end of the year $ 101,426 c. Calculate 2020 and 2021 net operating working capital (NOWC) and 2021 free cash flow (FCF). Assume the firm has no excess cash. NOWC2020: $ thousand NOWC2021: $ thousand FCF2021: $ thousand d. If Laiho increased its dividend payout ratio, what effect would this have on corporate taxes paid? What effect would this have on taxes paid by the company's shareholders? O corporate taxes and the company's shareholders would pay If Laiho increased its dividend payout ratio, the firm would pay taxes on the dividends they would receive. e. Assume that the firm's after-tax cost of capital is 11.5%. What is the firm's 2021 EVA? $ thousand f. Assume that the firm's stock price is $20 per share and that at year-end 2021 the firm has 10 million shares outstanding. What is the firm's MVA at year-end 2021? $ thousand Laiho Industries: Balance Sheets as of December 31 (thousands of dollars) 2021 2020 Cash $101,426 $ 89,860 Accounts receivable 101,633 83,682 Inventories 38,056 35,033 Total current assets $241,115 $208,575 Net fixed assets 70,997 44,385 Total assets $312,112 $252,960 Accounts payable Accruals Notes payable Total current liabilities Long-term debt Total liabilities $ 32,241 29,743 16,658 $ 78,642 77,676 $156,318 105,500 50,294 $155,794 $312,112 $ 24,640 22,720 14,048 $ 61,408 65,276 $126,684 93,000 33,276 $126,276 $252,960 Common stock Retained earnings Total common equity Total liabilities and equity
