Free Cash Flow Statement: The free cash ow operating perspective can be viewed as the cash ow into the rm from operations. The free cash ow nancing perspective can be viewed as the cash ow out of the rm creditors and owners. For example, dividends are paid out and income is received (ows in). The cash ows from a nancing perspective must balance with the cash ow from an operating perspective. Using the Blackrock balance sheet and income statements in Table 17, complete the Free Cash Flow Statement for Blackrock in Table 16 for the scal year ending August 31, 2014.

Table 16: BLACKROCK FREE CASH FLOW STATEMENT FREE CASH FLOWS: OPERATING PERSPECTIVE

Operating Income

Plus depreciation expense

Tax expense

Change in income tax payable ___________

After-tax cash ows from operations

Change in net operating working capital

Change in cash

Change in accounts receivable

Change in inventories

Change in accounts payable ___________

Change in net operating working capital

Change in xed assets and land

Purchase of gross plant and equipment ___________

Change in xed assets and land ___________

Free cash ows (operating perspective) ___________

FREE CASH FLOWS: FINANCING PERSPECTIVE

Change in notes payable

Change in long-term debt

Dividends Interest expense

Change in common stock

Change in capital surplus __________

Free cash ows (nancing perspective) ==========

Table 17: BLACKROCK ANNUAL BALANCE SHEET and INCOME STATEMENT

08/31/2014 08/31/2013

ASSETS

Cash & Equivalents $15 $13

Accounts Receivable 647 705

Inventory _2,326___________________ 1,715_

Total Current Assets $2,988 $2,433

Gross Plant, Property &

Equipment 5,384 4,387

Less Accumulated

Depreciation _1,193______________________929_

Net Plant, Property

& Equipment _$4,191____________________$3,458_

TOTAL ASSETS _$7,179===================$5,891_

08/31/2014 08/31/2013

LIABILITIES

Notes Payable $405 $225

Tax Payable 94 95

Accounts Payable _1,506_____________________1,362_

Total Current

Liabilities _$2005_____________________$1,682_

Long Term Debt 22 22

EQUITY

Common Stock 10 72

Paid-In Capital 578 317

Retained Earning _4,564______________________3,798_

Total Equity _$5,152_____________________$4,187_

TOTAL LIABILITIES

& EQUITY _$7,179====================$5,891_

08/31/2014 08/31/2013

INCOME STATEMENT

Sales $24,143 $21,207

Cost of Goods Sold _16,900______________________15,236_

Gross Prot $7,243 $5,971

Operating Expenses 5,070 4,454

Depreciation ____264________________________230_

Operating Prot $1,909 $1,287

Interest Expense _____18__________________________4_

Pretax Income $1,891 $1,282

Total Income Taxes ____794________________________539_

Net Income _$1,097======================$744_