Forecast income statement - ALL FIGURES IN $ MILLION Financial year ending 31 March 2023 2024 2025 Revenue 165.0 180.0 210.0 Less: Operating expenses 120.0 128.0 145.0 Operating earnings before depreciation 45.0 52.0 65.0 Less: Depreciation 30.0 32.0 25.0 Earnings before interest and tax (EBIT) 15.0 20.0 40.0 Less: Interest expense 5.0 5.0 5.0 Earnings before tax 10.0 15.0 35.0 Less: Tax expense 2.8 4.2 9.8 Net profit (earnings) 7.2 10.8 25.2 In addition, you have collected the following information: Operating working capital (OWC) in each year will be 10% of revenue in that year Capital expenditure (capex) will be $25 million in each year The corporate tax rate is 28%. What is Electrix's free cash flow to the firm (FCF) in year 2025? Thanks!
Forecast income statement - ALL FIGURES IN $ MILLION Financial year ending 31 March 2023 2024 2025 Revenue 165.0 180.0 210.0 Less: Operating expenses 120.0 128.0 145.0 Operating earnings before depreciation 45.0 52.0 65.0 Less: Depreciation 30.0 32.0 25.0 Earnings before interest and tax (EBIT) 15.0 20.0 40.0 Less: Interest expense 5.0 5.0 5.0 Earnings before tax 10.0 15.0 35.0 Less: Tax expense 2.8 4.2 9.8 Net profit (earnings) 7.2 10.8 25.2 In addition, you have collected the following information: Operating working capital (OWC) in each year will be 10% of revenue in that year Capital expenditure (capex) will be $25 million in each year The corporate tax rate is 28%. What is Electrix's free cash flow to the firm (FCF) in year 2025? Thanks!
Chapter14: Security Structures And Determining Enterprise Values
Section: Chapter Questions
Problem 8EP
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| Financial year ending 31 March | 2023 | 2024 | 2025 |
| Revenue | 165.0 | 180.0 | 210.0 |
| Less: Operating expenses | 120.0 | 128.0 | 145.0 |
| Operating earnings before |
45.0 | 52.0 | 65.0 |
| Less: Depreciation | 30.0 | 32.0 | 25.0 |
| Earnings before interest and tax (EBIT) | 15.0 | 20.0 | 40.0 |
| Less: Interest expense | 5.0 | 5.0 | 5.0 |
| Earnings before tax | 10.0 | 15.0 | 35.0 |
| Less: Tax expense | 2.8 | 4.2 | 9.8 |
| Net profit (earnings) | 7.2 | 10.8 | 25.2 |
In addition, you have collected the following information:
- Operating working capital (OWC) in each year will be 10% of revenue in that year
- Capital expenditure (capex) will be $25 million in each year
- The corporate tax rate is 28%.
What is Electrix's
Thanks!
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