predict abnormal earnings, abnormal operating income (AOI or abnormal NOPAT) and FCF free cash flow from 2020 to 2022
OA-OL b) Using the 2019 effective tax rate, calculate NFE (net financial expense) and OCENIE 3.) You have reformulated the Imber Aedax Company's most recent financial statements and extracted the following information: $ million Year ended 31 December 2019 Sales 35,200 291 Interest expense minus interest income 13,168 Earnings before tax 2,384 Tax expense 11.809 Comprehensive income (CE) $ million As at 31 December 2019 936 Net operating working capital (OWC) Net non-current operating assets (NNCOA) 42,287 Net financial obligations (NFO) 11,906 is ve NFA a) Calculate NOA (net operating assets) and CSE (common shareholders' equity) at the end of 2019. (2 marks) (operating income or NOPAT) for the year 2019. (5 marks) You now have the following forecast assumptions: 2020 2021 2022 thereafter Sales growth 10% 7% 4% 3% Ol/ sales 30% 25% 20% 18% Previous year OWC / this year's sales 2.2% 2.0% 2.0% Previous year NNCOA / this year's sales 105% 100% 98% NFO/ NOA 27.5% 27.5% 27.5% 27.5% -OR-ot -NIAN 43223 (6 marks) c) Predict sales and Ol for the years 2020 to 2022. Predict NOA, NFO and CSE for the years 2020 to 2022. d) Assuming that the 2019 tax rate continues to apply in future and that the cost of debt before tax shield benefit is 2%, find the after-tax cost of debt. Assuming that the cost of equity is 4.9% and using information given in the forecast table above, calculate the WACC (weighted average cost of capital). Round it to the nearest one tenth of a percent Assuming that NFE equals previous year NFO times the after-tax cost of debt, calculate NFE and CE for the years 2020 to 2022. 0.45699 9oub (6 marks) e) Calculate predicted AE (abnormal earnings), AOI (abnormal operating income or abnormal NOPAT) and FCF (free cash flow) for the years 2020 to 2022. (6 marks) OA-OL b) Using the 2019 effective tax rate, calculate NFE (net financial expense) and OCENIE 3.) You have reformulated the Imber Aedax Company's most recent financial statements and extracted the following information: $ million Year ended 31 December 2019 Sales 35,200 291 Interest expense minus interest income 13,168 Earnings before tax 2,384 Tax expense 11.809 Comprehensive income (CE) $ million As at 31 December 2019 936 Net operating working capital (OWC) Net non-current operating assets (NNCOA) 42,287 Net financial obligations (NFO) 11,906 is ve NFA a) Calculate NOA (net operating assets) and CSE (common shareholders' equity) at the end of 2019. (2 marks) (operating income or NOPAT) for the year 2019. (5 marks) You now have the following forecast assumptions: 2020 2021 2022 thereafter Sales growth 10% 7% 4% 3% Ol/ sales 30% 25% 20% 18% Previous year OWC / this year's sales 2.2% 2.0% 2.0% Previous year NNCOA / this year's sales 105% 100% 98% NFO/ NOA 27.5% 27.5% 27.5% 27.5% -OR-ot -NIAN 43223 (6 marks) c) Predict sales and Ol for the years 2020 to 2022. Predict NOA, NFO and CSE for the years 2020 to 2022. d) Assuming that the 2019 tax rate continues to apply in future and that the cost of debt before tax shield benefit is 2%, find the after-tax cost of debt. Assuming that the cost of equity is 4.9% and using information given in the forecast table above, calculate the WACC (weighted average cost of capital). Round it to the nearest one tenth of a percent Assuming that NFE equals previous year NFO times the after-tax cost of debt, calculate NFE and CE for the years 2020 to 2022. 0.45699 9oub (6 marks) e) Calculate predicted AE (abnormal earnings), AOI (abnormal operating income or abnormal NOPAT) and FCF (free cash flow) for the years 2020 to 2022. (6 marks)
