Question
From the following information on the income statement and the balance sheet, what is free cash flow to the firm (FCFF) in 2019? Assume that
From the following information on the income statement and the balance sheet, what is free cash flow to the firm (FCFF) in 2019?
Assume that the tax rate is 0.4.
Income Statement
| Items | 2018 | 2019 |
| Revenue | 2,526 | 3,002 |
| Cost of goods sold | 1,009 | 1,251 |
| SG&A expense | 310 | 354 |
| Depreciation | 403 | 504 |
| Interest expense | 106 | 155 |
Balance Sheet
| Items | 2018 | 2019 |
| Cash | 156 | 304 |
| Accounts receivable | 450 | 905 |
| Inventory | 906 | 1,207 |
| PP&E | 9,014 | 12,673 |
| Accumulated Dep | 4,275 | 5,749 |
| Accounts payable | 606 | 660 |
| Short-term debt | 310 | 504 |
| Long-term debt | 3,042 | 3,443 |
| Common stock | 1,800 | 1,800 |
| Retained earnings | x | x |
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Fundamentals of Investing
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk
12th edition
978-0133075403, 133075354, 9780133423938, 133075400, 013342393X, 978-0133075359
