Financial Statements and Cash Flow
Essay by lluuu555 • May 3, 2019 • Essay • 443 Words (2 Pages) • 745 Views
Income Statement ($ millions) | 2018 | 2019 |
Sales | 1,509 | 1,250 |
COGS | 750 | 550 |
Depreciation | 65 | 50 |
Non-Operating Expense | 30 | 40 |
EBIT | 664 | 610 |
Interest Expense | 40 | 40 |
EBT | 624 | 570 |
Tax | 212 | 194 |
Net Income | 412 | 376 |
Dividends | 103 | 67 |
Balance Sheet ($ millions) | 2018 | 2019 |
Cash | 104 | 160 |
A/R | 455 | 688 |
Inventory | 553 | 555 |
Current Assets | 1,112 | 1,403 |
Fixed Assets (net of depreciation) | 1,644 | 1,709 |
Total Assets | 2,756 | 3,112 |
A/P | 400 | 300 |
Accuruals | 28 | 89 |
Notes Payable | 50 | 42 |
Total Current Liabilities | 478 | 431 |
Long-Term Debt | 358 | 412 |
Total Liabilities | 836 | 843 |
Equity | 600 | 640 |
Retained Earnings | 1,320 | 1,629 |
Total Liabilities and Equity | 2,756 | 3,112 |
Change in Net Fixed Assets = 1,709 – 1,644 = 65
Change in Gross Fixed Assets (Capital Expenditures) = 1,709 – 1,644 + 50 = 115*
*To get the change in gross fixed assets, we must add back depreciation to the change in net fixed assets since the annual depreciation was deducted to get to net fixed assets.
Change in NOWC = (688 + 555 – 300 – 89) - (455 + 553 – 400 – 28) = 274*
*I have left out cash as a current asset since we will be adding the cash to the present value of the operating assets when using the free cash flow approach. I have also left out notes payable, a current liability, since we will be subtracting the debt from the value of the firm when using the free cash flow approach.
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