Quantitative Problem: Rosnan Industries' 2022 and 2021 balance sheets and income statements are shown below. Balance Sheets: 2022 2021 Assets Cash and equivalents $ 100 $ 85 Accounts receivable 275 300 Inventories 375 250 Total current assets $ 750 $ 635 Net plant and equipment 2,300 1,490 Total assets $ 3,050 $ 2,125 Liabilities and Equity Accounts payable $ 150 $ 85 Accruals 75 50 Notes payable 150 75 Total current liabilities $ 375 $ 210 Long-term debt 450 290 Total liabilities $ 825 $ 500 Common stock 1,225 1,225 Retained earnings 1,000 400 Total common equity $ 2,225 $ 1,625 Total liabilities and equity $ 3,050 $ 2,125 Income Statements: 2022 2021 Sales $ 2,405 $ 1,585 Operating costs excluding depreciation 1,250 1,000 EBITDA $ 1,155 $ 585 Depreciation and amortization 100 75 EBIT $ 1,055 $ 510 Interest 63 46 EBT $ 992 $ 464 Taxes (25%) 248 116 Net income $ 744 $ 348 Dividends paid $144 $48 Addition to retained earnings $600 $300 Shares outstanding 100 100 Price $25.00 $22.50 WACC 10.00% The balance in the firm's cash and equivalents account is needed for operations and is not considered "excess" cash. Using the financial statements given above, what is Rosnan's 2022 free cash flow (FCF)? Cash outflow, if any, should be indicated by a minus sign. Round your answer to the nearest cent. $

Fundamentals Of Financial Management, Concise Edition (mindtap Course List)

10th Edition

ISBN:9781337902571

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter3: Financial Statements, Cash Flow, And Taxes

Section: Chapter Questions

Problem 12P

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Quantitative Problem: Rosnan Industries' 2022 and 2021 balance sheets and income statements are shown below.

Balance Sheets:
	2022		2021
Assets
Cash and equivalents	$	100		$	85
Accounts receivable		275			300
Inventories		375			250
Total current assets	$	750		$	635
Net plant and equipment		2,300			1,490
Total assets	$	3,050		$	2,125

Liabilities and Equity
Accounts payable	$	150		$	85
Accruals		75			50
Notes payable		150			75
Total current liabilities	$	375		$	210
Long-term debt		450			290
Total liabilities	$	825		$	500
Common stock		1,225			1,225
Retained earnings		1,000			400
Total common equity	$	2,225		$	1,625
Total liabilities and equity	$	3,050		$	2,125

Income Statements:
	2022		2021
Sales	$	2,405		$	1,585
Operating costs excluding depreciation		1,250			1,000
EBITDA	$	1,155		$	585
Depreciation and amortization		100			75
EBIT	$	1,055		$	510
Interest		63			46
EBT	$	992		$	464
Taxes (25%)		248			116
Net income	$	744		$	348

Dividends paid		$144		$48
Addition to retained earnings		$600		$300

Shares outstanding		100		100
Price	$25.00		$22.50
WACC	10.00%

The balance in the firm's cash and equivalents account is needed for operations and is not considered "excess" cash.

Using the financial statements given above, what is Rosnan's 2022 free cash flow (FCF)? Cash outflow, if any, should be indicated by a minus sign. Round your answer to the nearest cent.

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