Question
Please use the following balance sheets and income statements to solve this problem (all numbers in Million USD) Ariba Company 2018 2017 Net Sales and
Please use the following balance sheets and income statements to solve this problem (all numbers in Million USD)
Ariba Company | 2018 | 2017 | Net Sales and Revenues | 2018 | 2017 |
Cash and cash equivalents | $3,000. | $ 3,000. | Net Sales | 26,000. | 28,000. |
Marketable securities | $ 350. | $ 230. | Cost of sales | 18,000. | 20,000. |
Account receivables | $25,000 | $28,000. | Research and dev expenses | 1,000. | 1,000. |
Other receivables | $1,000. | $ 900. | Selling expenses | 2,000. | 2,000. |
Inventories | $ 3,000. | $ 3,000.0 | Interest expense | 760. | 680. |
Prepaid expenses | $ 5,000. | $ 4,000. | Non-operating expenses | 1000. | 960. |
Property & equipment - net | $11,000. | $10,000. | Total | 24,000 | 26,000. |
Goodwill | $ 800.7 | $ 700.0 | Income before Income Taxes | 2,000. | 2,000. |
Intangible assets - net | $ 4,000.1 | $ 4,000. | Provision for income taxes | 700. | 800. |
Total Assets | $57,000. | $57,000. | Income of Consolidated Group | 1,000. | 1,00. |
LIABILITIES |
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Short-term borrowings | $6,000.2 | $ 8,000. |
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Account payables | $5,000.1 | $ 4,000. |
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Accrued expenses | 7,000.1 | $ 7,000. |
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Deferred revenues | $ 160.0 | $ 160 |
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Long-term borrowings | $21,000. | $23,000. |
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Other liabilities | $ 8,000.5 | $ 6,000. |
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Total liabilities | $50,000. | $51,000. |
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STOCKHOLDERS' EQUITY |
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Common stock | $2,000. | $ 2,000 |
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Treasury stock | (15,000.) | (15,000.) |
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Retained earnings | $23,000. | $23,000. |
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Comprehensive income/loss | (5,000.0) | (4,000) |
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Total stockholders' equity | $ 6,000 | $ 6,000 |
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Calculate Aribas Free Cash Flow during 2018 and explain the meaning of the free cash flow you have calculated to Aribias investors.
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