Calculate the expected Free Cash Flows from an operating, or asset perspective for 2019 and 2020, and explain how the cash flows were utilized, and its impact on the expansion plan. How did the company finance its expansion programs?
Table 1 Balance Sheets 2020E 2019 2018 Assets 7,282 632,160 1.287 360 $1,926,802 1,202,950 263.160 939.790 $ 2.866.592 Cash $ 85,632 878,000 1.716.480 $ 2,680,112 1,197,160 380.120 57,600 351,200 715.200 Accounts receivable Inventories Total current assets $1,124,000 491,000 146,200 $ 344.800 $ 1.468.800 Gross fixed assets Less accumulated depreciation Net fixed assets 817.040 $ 3.497.152 Total assets Liabilties and Equity Accounts payable Notes payable 436,800 300,000 408 000 $1,144,800 400,000 1,721,176 524,160 636,808 489,600 $1,650,568 723,432 460,000 32.592 492,592 $ 2,866.592 145,600 200,000 136.000 481,600 323,432 460,000 203.768 $ 663.768 $ 1.468,800 Accruals Total current liabilities Long-term debt Common stock Retained earnings Total equity Total liabilities and equity 231.176 $ 1,952.352 3.497.152 Note: "E" indicates estimated. The 2020 data are forecasts. Table 2 Income Statements 2020E 2019 $6,034,000 5,528,000 519,988 2018 $3,432,000 2,864,000 358,672 Sales $7,035,600 5,875,992 550,000 Cost of goods sold Other expenses Total operating costs exduding depreciation $ 6,047,988 13,988) 116,960 130,948) 136,012 ($ 266,960) $ (106,784)a ($. s 3,222,672 209,328 18,900 190,428 43,828 146,600 58,640 87.960 $6,425,992 609,608 ($ 116,960 492,648 ($ 70,008 $ 422,640 169,056 $ EBITDA Depreciation BIT Interest expense T Taxes (40%) Net income 253.584 160.176) 1.014 ($ EPS 1.602) 0.880 DPS 0.220 0.110 $ 0.220 6.638 8.50 Book value per share Stock price Shares outstanding 7.809 $ 12.17 4.926 $ 250,000 40.00% 2.25 100,000 40.00% 100,000 40.00% 40,000 Tax rate Lease payments Sinking fund payments 40,000 40,000 Note: "E" indicates estimated. The 2020 data are forecasts. The firm had sufficient taxable income in 2017 and 2018 to obtain its full tax refund in 2019. TABLE 4. Statement of Stockholders' Equity, 2019 Total Common Stock Stockholders' Retained Shares 100,000 Amount $460,000 Earnings $203,768 (160,176) (11,000) Equity $663,768 Balances, 12/31/18 2019 Net Income Cash Dividends Addition (Subtraction) (171,176) $ 32.592 to Retained Earnings Balances, 12/31/19 (171,176) $492.592 100,000 $460.000 Table 5. Statement of Cash Flows, 2019 Operating Activities ($ 160,176) Net income Depreciation and amortization Increase in accounts payable 116,960 378,560 Increase in accruals 353,600 Increase in accounts receivable (280,960) (572,160) ($ 164,176) Increase in inventories Net cash provided by operating activities Long-Term Investing Activities Additions to property, plant, and equip ment Net cash used in investing activities ($ 711,950) ($711,950) Financing Activities Increase in notes payable Increase in long-term debt 436,808 400,000 (11,000) Payment of cash dividends Net cash provided by financing activ ities 825,808 Summary ($ Net decrease in cash 50,318) Cash at beginning of year Cash at end of year 57,600 7,282
