Firm Valuation

Consider the financial statements from GSB, Inc. (see the attached spreadsheet), and consider the following questions.

What is the firm's operating cash flow for 2019?

How much did the firm spend on capital investment in 2019?

What is the firm's change in net working capital for 2019 from the previous year?

What is the firm's free cash flow from assets for 2019?

Assuming the firms free cash flow will continue to increase at the rate of 5% per year, what is the estimated value of the firm as of 2019? Assume that the investors required rate of return (or cost of capital) is 10% per year.

If the firm has 460 million shares of stock outstanding, what is the estimated stock price per share as of 2019 given your answer in Q.5

GSB Inc.						GSB, Inc.
2019 Income Statement						12/31/2018 and 12/31/2019 Balance Sheet
(In $ millions)						($ in millions)
Net Sales				9,625			2018	2019				2018	2019
Less: Cost of goods sold				5,225
Less: Depreciation				1,890		Cash	1,455	260			Accounts payable	1,150	2,963
Earnings before interest and taxes				2,510		Accounts rec.	2,460	3,975			Notes payable	2,600	1,528
Less: Interest paid				850		Inventory	1,405	885			Current liabilities	3,750	4,491
Taxable income				1,660		Current assets	5,320	5,120
Less: Taxes				581							Long-term debt	7,000	7,600
Net income				1,079		Fixed assets	19,300	21,720			Common stock	5,500	5,700
											Retained earnings	8,370	9,049
In addition to retained earnings				679
Dividends paid				400		Total assets	24,620	26,840			Total liabilities and owners' equity	24,620	26,840