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4–6

Finding munificent and gratuitous coin progresss Consider the subjoined et sheets and chosen axioms from the pay declaration of Keith Corporation.

Keith Corporation Et Sheets

 

December 31


Assets

2015

2014

Cash

$ 1,500

$ 1,000

Marketable securities

1,800

1,200

Accounts receivable

2,000

1,800

Inventories

  2,900

  2,800

   Total present assets

$ 8,200

$ 6,800

Gross urban assets

$29,500

$28,100

Less: Accumulated depreciation

 14,700

 13,100

   Net urban assets

$14,800

$15,000

   Total assets

$23,000

$21,800

Liabilities and stockholders’ equity

Accounts payable

$ 1,600

$ 1,500

Notes payable

2,800

2,200

Accruals

    200

    300

   Total present liabilities

$ 4,600

$ 4,000

Long-term debt

  5,000

  5,000

   Total liabilities

$ 9,600

$ 9,000

Common stock

$10,000

$10,000

Retained earnings

  3,400

  2,800

   Total stockholders’ equity

$13,400

$12,800

   Total liabilities and stockholders’ equity

$23,000

$21,800

Keith Corporation Pay Declaration Axioms (2015)

Depreciation expense

$1,600

Earnings anteriorly improvement and taxes (EBIT)

2,700

Interest expense

367

Net income behind taxes

1,400

Tax rate

40%

 

  • a.Calculate the firm’s net munificent improvement behind taxes (NOPAT) for the year ended December 31, 2015, using Equation 4.1.
  • b.Calculate the firm’s munificent coin progress (OCF) for the year ended December 31, 2015, using Equation 4.3.
  • c.Calculate the firm’s gratuitous coin progress (FCF) for the year ended December 31, 2015, using Equation 4.4.
  • d.Interpret, collate, and opposition your coin progress estimates in parts b and c.

 

 

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