Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed
image text in transcribed
image text in transcribed
Finding operating and free cash flows Consider the balance sheets and selected data from the income statement of Kath 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) a. The net operating profit after tasses is $(Round to the nearest dollat) b. The operating cash flow (OCF) Iss Round to the nearest dollar) e. The firm's tree cash flow (FCF) $ (Round to the nearest dolar) 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 OB. Depreciation is approximately the same size as net operating proftalter tax to the operating cash low is about twice the NOPAY c. Keth Corporation has positive cash flows from operating activities D. The FCF value is very meaningful because shows that the cash flows from operations are adequate to cover both operating expense plus investment in fred and current DE. 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 food and current assets. Keith Corporation Balance Sheets December 31 Assets 2019 2018 Cash $1,500 $970 Marketable securities 1,850 1,180 Accounts receivable 2,030 1,760 Inventories 2,870 2,760 Total current assets $8,250 $6,670 Gross fixed assets $29,540 $28,090 Less: Accumulated depreciation 14,700 13,080 Net fixed assets $14,840 $15,010 Total assets $23,090 $21,680 Liabilities and Stockholders' Equity Accounts payable $1,650 $1,480 Notes payable 2,840 2,210 Accruals 150 250 Total current liabilities $4,640 $3,940 Long-term debt $5,020 $4,890 Total liabilities $9,660 $8,830 Common stock $10,010 $10,010 Retained earnings 3,420 2,840 Total stockholders' equity $13.430 $12,850 Total liabilities and stockholders' equity $23,090 $21,680 (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 Earnings before interest and taxes (EBIT) Interest expense Net profits after taxes Tax rate $1,620 2,670 373 1,815 21%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Information Systems A Practictioner Emphasis

Authors: Cynthia D. Heagy, Constance M. Lehmann

10th Edition

1891002821, 9781891002823

More Books

Students also viewed these Accounting questions

Question

What is the education level of your target public?

Answered: 1 week ago

Question

What advertising media and promotional tactics will you use?

Answered: 1 week ago