Malkom Ray Corporation Balance Sheet for December 31, 20x8 and 20x9

	20x9	20x8
Cash and Marketable Securities	$ 10,000	$   9,000
Account Receivables	16,000	12,500
Inventories	45,500	29,000
Total Current Assets	$ 71,500	$  50,500
Land	26,000	20,000
Building and Equipment	100,000	70,000
Less accumulated depreciation	(38,000)	(28,000)
Total Fixed Assets	$  88,000	$  62,000
Total Assets	$159,500	$112,500
Accounts Payable	$  17,000	$    6,500
Accrued Expenses	5,000	4,000
Short-term notes	47,000	17,000
Total Current Liabilities	$ 69,000	$  27,500
Long-term Debt	27,450	28,750
Common Stock	31,500	31,500
Retained Earnings	31,550	24,750
Total Debt and Equity	$159,500	$112,500

 

Table 2: Malkom Ray Corporation  Income Statement 

Malkom Ray Corporation Income Statement for December 31, 20x9

	20x9
Sales	$160,000
Cost of Goods Sold	96,000
Gross Profit	$  64,000
Operating Expenses
Fixed cash operating expenses	$   21,000
Variable operating expenses	16,000
Depreciation	10,000
Total Operating Expenses	$   47,000
Earnings Before Interest and Taxes	$   17,000
Interest Expense	6,100
Earnings Before Taxes	$   10,900
Income Taxes	3,900
Net Income (Loss)	$    7,000

 

Based on statement of income of expenses and statement of situation of Malkom Ray Corporation 

1. Calculate the change in the net working capital of the company between the years 20x8 and 20x9. Explain what the change in working capital might be due to for that period. 
2. Calculate the following values for the company for the year ending in 20x9. Present evidence of all your calculations
   1. NOPAT - Net Operating Profit after Taxes 
   2. OCF - Operating Cash Flow 
   3. FCF - Free Cash Flow 
3. Discuss the meaning of each of the measures calculated in the previous question, both for management and for investors and creditors, among other constituents.  
4. What is the main cause of the differences that exist between the profits of the company and the cash flows of the same period evaluated?