What is the change of NOWC in year

Assignment Help Financial Management

Reference no: EM131917882

You are working on your second project as an equity research intern at a bulge investment bank. Your focus is in retail space, especially in the health and fitness sector. Currently, you are gathering information on a fast-growing chain fitness company called LuluYoga. You are interested in calculating the free cash flow of the firm.

LuluYoga offers yoga classes in several major cities in the United States. Two major revenue resources are selling workout gear and membership passes for class access.

Assume at the beginning of year 2016, LuluYoga has zero inventory.

In year 2016, LuluYoga purchased 10,000 yoga mats at a price of $10 each. The company sells 6,000 mats at a price of $15 in year 2016 and sells the remaining at a price of $20 in year 2017.

In year 2016, LuluYoga sells 1,000 membership passes for $2,000 each. 80% of the classes purchased were used in 2016 and the rest are used in 2017.The yoga master’s compensation to teach classes are $300K in year 2016 and $200K in year 2017.

LuluYoga pays corporate tax of 35%.

1. What is the change of NOWC in year 2016?

Reference no: EM131917882

Questions Cloud

Calculate the effective rate for discount note : Calculate the effective rate for a discount note

Discuss the uses and limits of ratio analysis : Discuss the uses and limits of ratio analysis and give three examples.

Best defines inflation : Which of the following best defines inflation? If the unemployment rate is declining, the economy is likely experiencing which one of the following?

What is the FCF of LuluYoga in year : You are working on your second project as an equity research intern at a bulge investment bank. What is the FCF of LuluYoga in year 2016 and 2017?

What is the change of NOWC in year : You are working on your second project as an equity research intern at a bulge investment bank. What is the change of NOWC in year 2016?

Balance sheet and income statement : How should company F report the above facts on its December 31, 20XX balance sheet and income statement?

What is LuluYoga net operating profit : You are working on your second project as an equity research intern at a bulge investment bank. What is LuluYoga’s net operating profit in 2016 ?

Issue convertible bonds instead of regular bonds : Also explain why NuVasive decided to issue convertible bonds instead of regular bonds.

Create a portfolio : Create a portfolio that invests 24% of $1 million in company A

User Account

All Pages