Free Cash Flow Assignment

 

Free Cash Flow Assignment

INSTRUCTIONS FOR FREE CASH FLOW

 

Use the financial statements below to calculate the firm’s Free Cash Flow according to the method used FCF calculation on the Discussion Board.

 

Use the method from postings to calculate FCF and post your calculation. Provide the numbers for this calculation: CF = OCF – NWC – NCS. Ultimately, there are about 7 calculations, but you can provide just a summary of the calculations for this formula: FCF = OCF – NWC – NCS.

 

 

Real Time Corporation

Balance Sheet as of December 31, 2016 and 2015 (000 omitted)

 

          2015                  2016                                                              2015                        2016

 

Cash                                             $500                $500                       Accounts Payable             $ 350                  $   400

Accounts Receivable                     460                     600                  Other CL                              644                         726

Inventory                                    1,180                    1,246                       Total CL                         994                       1,126

Total CA                                 2,140               2,346                Long-term debt                 2,869                           2,956

Net Fixed Assets                         5,770                   6,087                     Total Liabilities           3,863                       4,082

Other Assets                                 1,000                   1,000                 Equity:

Total Assets                             8,910                   9,433                  Common Stock               1,000                      1,000

Addl. Paid in Surplus      2,200                   2,200

Retained Earnings           1,847                   2,151

Total Equity                 5,047                   5,351

Total Liab & St. Equity    8,910                   9,433

 

Real Time Corporation

2016 Income Statement (000 omitted)

 

Sales                                       $3,990

Cost of Goods Sold               2,137

Depreciation                           1,018

EBIT                                           835

Interest Expense                       267

Taxable Income                     568

Taxes (34%)                           193

Net Income                             375

 

Dividends                            $  225

Addition to Ret. Earnings       150

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