Question
Fraudulent Co. is comparing their financial statements from last year with this year to see the impact of Net-working-capital NWC to this year's Free Cash
Fraudulent Co. is comparing their financial statements from last year with this year to see the impact of Net-working-capital NWC to this year's Free Cash Flows (FCF). Last year the company showed $2500 in cash, $3000 in inventories, $2000 in accounts receivable, $1000 in depreciation and $3500 in accounts payable. This year, they show $1500 in cash, $2500 in ventories. $2000 in accounts receivable, $500 in depreciation, and $2500 in accounts payable. What will be the net impact of these NWC changes to the FCF for this year? In other words, will NWC increase or decrease the FCF?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started