Consider the balance sheets and selected data from the income statement of Keith Corporation that follow (attached) a. Calculate the firm's net operating profit after taxes (NOPAT) for the year ended December 31, 2015.b. Calculate the firm's operating cash flow (OCF) for the year ended December 31, 2015.c. Calculate the firm's free cash flow (FCF) for the year ended December 31, 2015.d. Interpret, compare and contrast your cash flow estimate in parts (b) and (c). Data TableDecember 31Assets20152014Cash$1,500$9901,1801,790Marketable securities1,8502,030Accounts receivableInventories2,8502,850$8,230$29,470Total current assets$6,810$28,11013,060Gross fixed assetsLess: Accumulated depreciation14,710Net fixed assets$14,760$22,990$15,050Total assets$21,860Liabilities and Stockholders' EquityAccounts payableNotes payable$1,4502,210$1,6502,790Accruals210300$4,650$3,960$5,080Total current liabilitiesLong-term debt$4,890$9,540$10,0003,450Total liabilities$9,040Common stock$10,000Retained earnings2,820Total stockholders' equityTotal liabilities and stockholders' equity$13,450$12,820$22,990$21,860Income Statement Data (2015)Depreciation expenseEarnings before interest and taxes (EBIT)Interest expense$1,6502,720371Net profits after taxes1,409Tax rate40%

Net Operating Profit ("NOPAT") is the operating profit adjusted for taxes. It is generally used to…

Consider the balance sheets and selected data from the income statement of Keith Corporation that follow (attached) a. Calculate the firm's net operating profit after taxes (NOPAT) for the year ended December 31, 2015. b. Calculate the firm's operating cash flow (OCF) for the year ended December 31, 2015. c. Calculate the firm's free cash flow (FCF) for the year ended December 31, 2015. d. Interpret, compare and contrast your cash flow estimate in parts (b) and (c).

Consider the balance sheets and selected data from the income statement of Keith Corporation that follow (attached) a. Calculate the firm's net operating profit after taxes (NOPAT) for the year ended December 31, 2015. b. Calculate the firm's operating cash flow (OCF) for the year ended December 31, 2015. c. Calculate the firm's free cash flow (FCF) for the year ended December 31, 2015. d. Interpret, compare and contrast your cash flow estimate in parts (b) and (c).

Accounting (Text Only)

26th Edition

ISBN:9781285743615

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 15.19EX

See similar textbooks

Related questions

Q: Which of the following tracks how much money a company has generated over time and where it went? O…

A: Cash flow is the movement of money in and out of business during the given time period.

Q: • The net income of Smart Cookies Ltd. for the year ended 2016 was $5,000 and the applicable…

Q: The chief accountant for Julius Co. provides you with the company's most recent income statement and…

A: Cash flows from operating activities is one of the important section of cash flows statement which…

Q: The following are the accounts of JRA Ltd. a company that manufactures playground equipment,…

A: Return on equity = Net Income/ Shareholder's Equity*100 Return on equity (For 2016) = 6300/35700*100…

Q: The net income of Smart Cookies Ltd. for the year ended 2016 was $5,000 and the applicable corporate…

A: Cash flow statement of the company is calculated in the indirect format. An increase in current…

Q: Refer to the financial statements and related disclosure notes of The Kroger Company for the fiscal…

Q: You are the CFO for Tom & Jerry’s, Inc. Together with Tom Fheelein and Jerry Rhodeint, the company’s…

A: 1.

Q: (b) Shanti Trading prepares Cash Flow Statement every year to record the cash inflows and outflows…

A: Net of retained earnings=311,000-217,000=94,000

Q: The following is the comparative balance sheet of Manish Ltd. Prepare a Cash Flow Statement for the…

A: The Cash flow statement tracks the movement of cash in or out of the company.

Q: Q1.From the following information prepare a 'cash flow statement' for Ronak Ltd. Balance sheet of…

A: Cash flow statement: A summary statement that reflects all the cash inflow and outflows of the…

Q: The second step is to prepare a common-size income statement for the firm. Complete the…

A: Formula: Each individual line item % = ( Each individual line item value / Revenues ) x 100

Q: Required: Prepare a statement of cash flows for the business for 2018. 6.5 The following are the…

A: The cash flow statement is prepared to record cash flow from various activities during the period.

Q: rom 2015 to 2019, what was the total cash flow that Mydeco generated from operations? What…

A: Capital expenditures refer to the money spent by a company on acquiring or funding fixed assets.…

Q: The comparative balance sheet of Pelican Joe Industries Inc. for December 31, 2016 and 2015, is as…

A: The cash flow statement is prepared to record the cash flow from various activities into the…

Q: a. How much is the firm's net working capital and what is the debt ratio? b. Complete a statement of…

A: a. Net working capital for 2018 = Total current assets - Total current liabilities =155,500 -…

Q: a) Calculate the following ratios for 2016 and 2015, showing detailed calculations as to how you…

Q: Using the Balance Sheets and Income Statement below, please calculate the following ratios for…

A: PROFIT MARGIN=NET INCOMESALES RETURN ON ASSET=NET INCOMETOTAL ASSET RETURN ON EQUITY=NET…

Q: Explain why the income statement, statement of retainedearnings, and statement of cash flows would…

Q: a. produce the income statement for the year. b. produce the operating cash flow for the year. a.…

A: Income Statement and Operating Cash Flow calculations are shown in the next sheet.

Q: Example:- ABC Co. Ltd has to prepare a cash flow statement for the year ended 31 December, 2014 from…

A: The Financial Statement of 2013 and 2014 are given. Required Cash Flow Statement.

Q: From 2015 to 2019, what was the total cash flow that Mydeco generated from operations? (Round to…

A: Cash flow: Cash flows refer to the money going out and coming into the business. The cash flow…

Q: Based on the short cases on Cash flow preparation, compute the following: 1. For the year ended…

A: Net change in cash = operating cashflows + investment activities + financing activities =…

Q: Which financial statement would show the revenues of the company for the year? Group of answer…

A: Financial statements: Financial statements are the final reports of a company, prepared at the end…

Q: Compute the following ratios for 2017. (a) Earnings per share $ (b) Return on common…

A: As the question has more than 3 sub-parts, the first 3 subparts are answered. If you want the answer…

Q: arrKnight Corporation's Balance Sheet and Income Statement as shown below: a) What is the operating…

A: The time it takes a corporation to buy things, sell them, and receive income from the sale of those…

Q: Carla Vista Hog Products Corp. provided the following financial information for the quarter ending…

A: In preparation of cash flow from operating activities section, the following adjustments are made to…

Q: EXCEL] Income statement: Nimitz Rental Company provided the following information to its auditors.…

A: The computation of net income is as follows: Hence, the net income is $137262.84.

Q: Crane Hog Products Corp. provided the following financial information for the quarter ending June…

A: The cash flow statement is prepared to record the cash flow from various activities during the…

Q: The management of Morrow Inc. is trying to decide whether it can increase its dividend. During the…

A: Free cash flow = Net cash provided by operating activities - Capital expenditures - Dividend paid

Q: Which one of the following defines a cash flow statement correctly? Select one:

A: Answer:1 Option (b) is correct. Note: there is some technical or printing error in question because…

Q: Suppose your company sells goods for $450, of which $275 is received in cash and $175 is on account.…

A: Operating activities: Operating activities refers to those activities which are performed by the…

Q: In reviewing the financial statements of the Graceland Rock Company, you note that net income…

A: a) The company Graceland Rock sold their goods on credit for the reason that, it causes no instant…

Question

Consider the balance sheets and selected data from the income statement of Keith Corporation that follow (attached)

a. Calculate the firm's net operating profit after taxes (NOPAT) for the year ended December 31, 2015.

b. Calculate the firm's operating cash flow (OCF) for the year ended December 31, 2015.

c. Calculate the firm's free cash flow (FCF) for the year ended December 31, 2015.

d. Interpret, compare and contrast your cash flow estimate in parts (b) and (c).

Data Table
December 31
Assets
2015
2014
Cash
$1,500
$990
1,180
1,790
Marketable securities
1,850
2,030
Accounts receivable
Inventories
2,850
2,850
$8,230
$29,470
Total current assets
$6,810
$28,110
13,060
Gross fixed assets
Less: Accumulated depreciation
14,710
Net fixed assets
$14,760
$22,990
$15,050
Total assets
$21,860
Liabilities and Stockholders' Equity
Accounts payable
Notes payable
$1,450
2,210
$1,650
2,790
Accruals
210
300
$4,650
$3,960
$5,080
Total current liabilities
Long-term debt
$4,890
$9,540
$10,000
3,450
Total liabilities
$9,040
Common stock
$10,000
Retained earnings
2,820
Total stockholders' equity
Total liabilities and stockholders' equity
$13,450
$12,820
$22,990
$21,860
Income Statement Data (2015)
Depreciation expense
Earnings before interest and taxes (EBIT)
Interest expense
$1,650
2,720
371
Net profits after taxes
1,409
Tax rate
40%

Definition Definition Cash that is left over after a company has paid for its operating and capital expenses. Unlike net income or earnings, free cash flow excludes non-cash expenses of the income statement and includes the expenditures on equipment and assets. Free cash flow also helps potential shareholders to evaluate how quickly the company can pay interest and dividends.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Step 5

Step 6

Step 7

Trending now

This is a popular solution!

Step by step

Solved in 7 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Use the below information to answer the following questions: 20202021Sales$11,573$12,936Depreciation 1661 1736Cost of goods sold 3979 4707Other Expenses 846 924Interest Expense 776 926Cash 6067 6466Accounts Receivables 8034 9427Short-term Notes Payable 1171 1147Long-term debt 20,320 24,696Net fixed assets 50,888 54,273Accounts Payable 4384 4644Tax rate 26% 34%Inventory 14,283 15,288Payout ratio 33% 30% A. Create the Balance Sheets for 2020 & 2021.
Use the below information to answer the following questions: 20202021Sales$11,573$12,936Depreciation 1661 1736Cost of goods sold 3979 4707Other Expenses 846 924Interest Expense 776 926Cash 6067 6466Accounts Receivables 8034 9427Short-term Notes Payable 1171 1147Long-term debt 20,320 24,696Net fixed assets 50,888 54,273Accounts Payable 4384 4644Tax rate 26% 34%Inventory 14,283 15,288Payout ratio 33% 30% A. Create the Income Statements for 2020 and 2021 (including dividends paid and retained earnings).
Vaughn Manufacturing Balance Sheet December 31, 2021 Assets Equities Cash $ 302000 Accounts payable $ 640000 Accounts receivable (net) 1942000 Income taxes payable 185000 Inventories 2451000 Miscellaneous accrued payables 230000 Plant and equipment, Bonds payable (8%, due 2023) 1850000 net of depreciation 1984000 Preferred stock ($100 par, 6% Patents 262000 cumulative nonparticipating) 752000 Other intangible assets 75200 Common stock (no par, 60,000 Total Assets $7016200 shares authorized, issued and outstanding) 1122000 Retained earnings 2466200 Treasury stock-1500 shares of preferred (229000) Total Equities $7016200 Vaughn Manufacturing Income Statement Year Ended December 31, 2021 Net…
Orbit Limited : Statement of Financial Position as at 31 December 2022 2021 Non-current Assets R11 810 000 R7 560 000 Property, Plant, Equipment R10 025 000 R6 250 000 Investments R1 785 000 R1 310 000 Current Assets R4 190 000 R4 690 000 Inventories R 1 875 000 R2 350 000 Account Receivable R1 925 000 R2 200 000 Cash R390 000 R140 000 Toatal Assets R16 000 000 R12 250 000 Equities & Liabilities Equity ? ? Oridanary share capital R5 480 000 R3 680 000 Retained earnings ? ? Non-current Liabilities R4 500 000 R3 800 000 Loan (20% p.a) R4 500 000 R3 800 000 Current Liabilities R2 300 000 R1 500 000 Accounts payable? R2 300 000 R1 500 000 Calculate the increase in the retained earnings over the two-year period.
Orbit Limited Statement of Financial Position as at 31 December: 2022 2021 R R ASSETS Non-current assets 11 810 000 7 560 000 Property, plant and equipment 10 025 000 6 250 000 Investments 1 785 000 1 310 000 Current assets 4 190 000 4 690 000 Inventories 1 875 000 2 350 000 Accounts receivable 1 925 000 2 200 000 Cash 390 000 140 000 Total assets 16 000 000 12 250 000 EQUITY AND LIABILITIES Equity ? ? Ordinary share capital 5 480 000 3 680 000 Retained earnings ? ? Non-current liabilities 4 500 000 3 800 000 Loan (20% p.a.) 4 500 000 3 800 000 Current liabilities 2 300 000 1 500 000 Accounts payable 2 300 000 1 500 000 Total equity and liabilities 16 000 000 12 250 000 Statement of Comprehensive Income for the year ended 31 December: 2022 2021 R R Sales 10 800 000 7 150 000 Cost of sales (6 000 000) (3 650 000) Gross profit 4 800 000 3 500 000 Operating expenses (1 800 000) (1 200 000) Depreciation 580 000 200 000…
Problem 43. The following assets are acquired on January 1, 2015, when the general price index is 200:Inventory P1,000,000Property, plant and equipment 2,000,000Investment in Bonds Receivable 3,000,000The company is reporting in a hyperinflationary economy. On December 31, 2015, the general priceindex is 300. How shall the assets above be presented in the 12/31/2015 Statement of FinancialPosition? Problem 44. The statement of financial position of ART Inc. before translation to hyperinflationaryeconomy is presented as follows:Cash 1,000,000 Accounts payable 1,000,000Accounts receivable 2,000,000 Unearned revenue (1/1/2015) 1,500,000Inventory (1/1/2015) 3,000,000 Ordinary share (1/1/2015) 2,000,000PPE (7/1/2015) 4,000,000 Retained earnings 500,000The general price index are provided for the following dates:1/1/2015 – 100 7/1/2015 – 200 12/31/2015 – 300How much retained earnings shall be presented in the translated statement of financialposition of ART Inc. in a hyperinflationary…
CONCORD INC.Comparative Balance SheetsDecember 31 Assets 2022 2021 Cash $80,500 $48,700 Accounts receivable 87,900 38,600 Inventory 111,900 102,100 Prepaid expenses 29,400 27,900 Long-term investments 139,800 113,700 Plant assets 284,200 241,900 Accumulated depreciation (47,700) (49,100) Total $686,000 $523,800 Liabilities and Stockholders’ Equity Accounts payable $106,000 $63,700 Accrued expenses payable 16,500 21,200 Bonds payable 117,100 149,500 Common stock 219,000 175,100 Retained earnings 227,400 114,300 Total $686,000 $523,800 CONCORD INC.Income StatementFor the Year Ended December 31, 2022 Sales revenue $382,500 Less: Cost of goods sold $135,600 Operating expenses, excluding…
E23.10B (L0 1,4) (Classification of Transactions) Following are selected balance sheet accounts of BioLazer Corp. at December 31, 2020 and 2019, and the increases or decreases in each account from 2019 to 2020. Also presented is selected income statement information for the year ended December 31, 2020, and additional information. Increase Selected balance sheet accounts 2020 2019 (Decrease)AssetsAccounts receivable $154,000 $120,000 $34,000Property, plant, and equipment 631,000 581,000 50,000Accumulated…
Prepare a classified balance sheet as of December 31, 2022 Cash 49104 Accounts Receivable 44880 Inventory 19976 Land 57200 Buildings 83600 Equipment 35200 Accumulated Dep-Buildings 29040 Accumulated Dep-Equipment 15840 Account Payable 16984 Interest Payable 4400 Dividends Payable 5900 Unearned Rent Revenue 1760 Bonds Payable 44000 Preferred Stock 17600 Paid-in Capital in Excess of Par-Preferred Stock 1760 Common Stock 35200 Paid-in Capital in Excess of Par-Common Stock 16720 Retained Earnings 66044 Treasury Stock 12936 Cash Dividends 5940 Sales Revenue 501600 Rent Revenue 5280 Bad Debt Expense 4092 Interest Expense 4400 Cost of Goods Sold 352000 Depreciation Expense 5808 Other Operating Expenses 34320 Salaries and Wages Expenses 57200 766656 766656
Xyz tradingCondensed comparative balance sheet 2021 2020 2019Assets:Current assets 468,000. 345,600. 300,000Property and equipment 600,000. 560,400. 500,400Other assets(advances ). 72,000. 126,000. 150,000Total assets. 1,140,000. 1,032,000. 950,400Liabilities and stockholders’ equityLiabilitiesCurrent liabilities 134,400. 112,800. 100,00012 % long-term notes payable. 240,000. 300,000 350,000Total liabilities. 374,400. 412,800. 450,000Stockholders’ equity10% preferred stock 120,000. 120,000. 120,000Common stock 300,000 240,000 200,000Additional paid in capital 84,000. 48,000 40,000Retained earnings…
A2 aii Use the following information for Delta Corporation: Year 20X1 20X2 Net sales $1,500,000 $1,656,598 Cost of goods sold 675,000 745,469 Depreciation 270,000 298,188 Interest paid 43,600 44,000 Cash 127,500 140,811 Account’s receivable 450,000 496,980 Inventory 525,000 579,809 Net fixed assets 1,800,000 1,987,918 Accounts payable 375,000 414,150 Notes payable 45,000 50,000 Long-term debt 500,000 500,000 Common stock 1,000,000 1,000,000 Retained earnings 982,500 1,241,368 Tax rate 35% 35% Dividend payout 30% 30% Delta has 600,000 common shares outstanding. The firm is projecting a 20% increase in net sales for the coming year (20X3). Delta uses the percentage of sales approach to plan for its financing needs. In using this approach, the firm assumes that cost of goods sold, all assets (current and fixed), and accounts payable will all remain a constant…
Patel Corporation Balance Sheet December 31, 2021 $ 630,000 189,000 275,000 1,875,000 Cash $ Accounts receivable ( net) Inventories Plant and equipment net of depreciation Patents Other intangible assets Total Assets $ 750,000 350,000 Accounts payable 1.950,000 Income taxes payable 2,439,000 Miscellaneous accrued payables Bonds payable (8% , due 2023) 1,963,000 Preferred slock ($100 par, 6% 261,000 cumulative nonparticipating) 75,000 Common stock (no par, 60,000 7,058.000 shares authorized, issued and outstanding) Retained earnings Treasury stock- - 1.500 shares of preferred Total Equities 1,125,000 2,439,000 (225,000) underline 5 7,058,000 Patel Corporation Income Statement Year ended December 31, 2021 Net sales $ Cose goods sold Gross profit Operating expenses (including bond interest expense) Income before income taxes Income tax Net income 9,000,000 6,000,000 3,000,000 1,500,000 1,500,000 450,000 1, 05 Additional information: There are no preferred dividends in arrears, the…