I'm struggling with a FIN 300 class. This is the problem that I am working on: Could you please explain each step that is taken to get the answer, because the book has the answers but I need to understand how those answers were reached and I'm having issues with the calculations.
1/Below are the key figures for the company Ivankovic over the last five years. 1 2 3 5 100 200 120 250 130 280 140 315 52 38 44 48 Fixed assets Working capital EBITDA Depreciation and amortisation Financial expense Income tax expense Dividends 110 225 40 10 15 7.5 13 10 14 7 11 17 8 12 19 22 8.5 8 5 5 6 6 Draw up the cash flow statement for years two to five. State your views. Exercises A detailed Excel version of the solutions is available at www.vernimmen.com. 1/Cash flow statement 2 3 4 5 Cash flow Change in working capital Cash flow from operating activities Capital expenditures Dividends paid Decrease in net debt 17.5 25 7.5 20 5 -32.5 19 25 -6 21 5 21 30 -9 22 5 -36 21.5 35 - 13.5 23 6 - 42.5 - 32 The company Ivankovic is in a high-growth and high capital expenditure phase. Ivankovic is unable to control working capital, hence a large cash deficit. This deficit is covered by debt, leading to a sharp rise in financial expense. The financial situation of Ivankovic is worsening and, if there is a slump in the economy, Ivankovic might face bankruptcy. 1/Below are the key figures for the company Ivankovic over the last five years. 1 2 3 5 100 200 120 250 130 280 140 315 52 38 44 48 Fixed assets Working capital EBITDA Depreciation and amortisation Financial expense Income tax expense Dividends 110 225 40 10 15 7.5 13 10 14 7 11 17 8 12 19 22 8.5 8 5 5 6 6 Draw up the cash flow statement for years two to five. State your views. Exercises A detailed Excel version of the solutions is available at www.vernimmen.com. 1/Cash flow statement 2 3 4 5 Cash flow Change in working capital Cash flow from operating activities Capital expenditures Dividends paid Decrease in net debt 17.5 25 7.5 20 5 -32.5 19 25 -6 21 5 21 30 -9 22 5 -36 21.5 35 - 13.5 23 6 - 42.5 - 32 The company Ivankovic is in a high-growth and high capital expenditure phase. Ivankovic is unable to control working capital, hence a large cash deficit. This deficit is covered by debt, leading to a sharp rise in financial expense. The financial situation of Ivankovic is worsening and, if there is a slump in the economy, Ivankovic might face bankruptcy
