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, 2015. b. Calculate the firm's operating cash flow (OCF) for the year ended December 31, 2015. c. Calculate the firm's free cash flow (FCF) for the year ended December 31, 2015. d. Interpret, compare and contrast your cash flow estimate in parts (b) and (c). 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. Keith Corporation has negative cash flows from operating activities. 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. 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. E. Keith Corporation has positive cash flows from operating activities. X 1 Data Table (Click on the icon located on the top-right corner of the data tables below in order to copy its contents into a spreadsheet.) Keith Corporation Balance Sheets O December 31 Assets 2015 2014 Cash $1,510 $960 Marketable securities 1,800 1,190 Accounts receivable 2,030 1,750 Inventories 2,870 2,810 Total current assets $8,210 $6,710 Gross fixed assets $29,540 $28,050 Less: Accumulated depreciation 14,690 13,090 Net fixed assets $14,850 $14,960 Total assets $23,060 $21,670 Liabilities and Stockholders' Equity Accounts payable $1,620 $1,460 Notes payable 2,810 2,150 Accruals 190 270 Total current liabilities $4,620 $3,880 Long-term debt $4,990 $4,990 Total liabilities $9,610 $8,870 Common stock $10,050 $10,050 Print Done 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, 2015. b. Calculate the firm's operating cash flow (OCF) for the year ended December 31, 2015. c. Calculate the firm's free cash flow (FCF) for the year ended December 31, 2015. d. Interpret, compare and contrast your cash flow estimate in parts (b) and (c). 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. Keith Corporation has negative cash flows from operating activities. 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. 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. E. Keith Corporation has positive cash flows from operating activities. X 1 Data Table (Click on the icon located on the top-right corner of the data tables below in order to copy its contents into a spreadsheet.) Keith Corporation Balance Sheets O December 31 Assets 2015 2014 Cash $1,510 $960 Marketable securities 1,800 1,190 Accounts receivable 2,030 1,750 Inventories 2,870 2,810 Total current assets $8,210 $6,710 Gross fixed assets $29,540 $28,050 Less: Accumulated depreciation 14,690 13,090 Net fixed assets $14,850 $14,960 Total assets $23,060 $21,670 Liabilities and Stockholders' Equity Accounts payable $1,620 $1,460 Notes payable 2,810 2,150 Accruals 190 270 Total current liabilities $4,620 $3,880 Long-term debt $4,990 $4,990 Total liabilities $9,610 $8,870 Common stock $10,050 $10,050 Print Done
