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Problem:
Use the financial statements for Widget Corp and find the FCF.
Balance Sheets Widget Corp. (In Millions of Dollars) (Winter 2013)
Assets
2013
2012
Liabilities and Equity
Cash
$100
$80
Accounts Payable
$50
$40
Short-term Investments
10
Notes Payable
$200
$180
Accounts Receivable
$400
$380
Accruals
$190
$150
Inventories
$450
$490
Total Current Liabilities
$440
$370
Total Current Assets
$960
Net Plant and Equipment
$1065
$965
Long-term Debt
$650
Total Debt
$840
$1,020
Common Stock (50 mill)
$485
$500
Retained Earnings
$700
$405
Total Common Equity
$1,185
$905
Total Assets
$2,025
$1,925
Total Liabilities and Equity
$1925
Income Statements Widget Corp (In Millions of Dollars) (Winter 2013)
Total Revenue
$4000
$3500
Operating Expenses
$3000
$2900
EBITDA
$1000
$600
Depreciation
$170
Amortization
$90
Depreciation and Amortization
$300
$260
EBIT (Operating Income)
$340
Less Interest
$125
$115
EBT
$575
$225
Less Taxes (40%)
$230
Net Income before preferred dividends
$345
$135
Preferred Dividends
$20
Net Income
$325
Common Dividends
$160
$110
Additions to Retained Earnings
$165
$5
Additional Information:
The question is from Finance as well as it is about finding the FCF or Free Cash Flow from balance sheet and income statements given in the question. The computations have been given in the solution comprehensively.
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