Finding operating and free cash flows. Consider the balance sheets and selected data from the income statement of Keith Corporation that follow

.a. Calculate the firm's net operating profit after taxes (NOPAT) for the year ended December 31, 2019.

b. Calculate the firm's operating cash flow (OCF) for the year ended December 31, 2019.

c. Calculate the firm's free cash flow (FCF) for the year ended December 31, 2019.

d. Interpret, compare and contrast your cash flow estimate in parts (b) and (c).

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A. The net operating profit after taxes is ________. (Round to the nearest dollar.)

B. The operating cash flow (OCF) is ________. (Round to the nearest dollar.)

C. The firm's free cash flow (FCF) is ________ (Round to the nearest dollar.)

D. Interpret, compare and contrast your cash flow estimate in parts (b) and (c). (Select all that apply.)

A. The FCF value is very meaningful because it shows that the cash flows from operations are adequate to cover both operating expense plus investment in fixed and current assets.

B. Depreciation is approximately the same size as net operating profit after tax, so the operating cash flow is about twice the NOPAT.

C. The OCF value is very meaningful because it shows that the cash flows from operations are adequate to cover both operating expense plus investment in fixed and current assets.

D. Keith Corporation has positive cash flows from operating activities.

E. Keith Corporation has negative cash flows from operating activities.

x i Data Table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Keith Corporation Balance Sheets December 31 Assets 2019 2018 Cash $1,510 $1,030 Marketable securities 1,770 1,200 Accounts receivable 2,050 1,820 Inventories 2,870 2,750 Total current assets $8,200 $6,800 Gross fixed assets $29,460 $28,080 Less: Accumulated depreciation 14,650 13,070 Net fixed assets $14,810 $15,010 Total assets $23,010 $21,810 Liabilities and Stockholders' Equity Accounts payable $1,580 $1,520 Notes payable 2,790 2,210 Accruals 230 350 Total current liabilities $4,600 $4,080 Long-term debt $4,970 $4,900 Total liabilities $9,570 $8,980 Common stock $10,030 $10,030 Retained earnings 3,410 2,800 Total stockholders' equity $13,440 $12,830 Total liabilities and stockholders' equity $23,010 $21,810 (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Income Statement Data (2019) Depreciation expense $1,580 Earnings before interest and taxes (EBIT) 2,650 Interest expense 374 Net profits after taxes 1,798 Tax rate 21% Print Done