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).

Keith Corporation Balance Sheets
	December 31
Assets	2015	2014
Cash	$1,480	$970
Marketable securities	1,810	1,200
Accounts receivable	1,950	1,820
Inventories	2,910	2,830
Total current assets	$8,150	$6,820
Gross fixed assets	$29,510	$28,150
Less: Accumulated depreciation	14,670	13,140
Net fixed assets	$14,840	$15,010
Total assets	$22,990	$21,830
Liabilities and Stockholders' Equity
Accounts payable	$1,580	$1,500
Notes payable	2,810	2,200
Accruals	190	340
Total current liabilities	$4,580	$4,040
Long-term debt	$5,020	$5,000
Total liabilities	$9,600	$9,040
Common stock	$10,040	$10,040
Retained earnings	3,350	2,750
Total stockholders' equity	$13,390	$12,790
Total liabilities and stockholders' equity	$22,990	$21,830

Income Statement Data (2015)
Depreciation expense	$1,530
Earnings before interest and taxes (EBIT)	2,670
Interest expense	368
Net profits after taxes	1,381
Tax rate	40%

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