a.
To compute: The net operating working capital for 2018 and 2019.
Balance sheet: It is a part of financial statements that lists company’s assets, liabilities and shareholders’ fund. It is prepared at the closure of accounting period and informs about company’s financial position on that day.
Income Statement: A part of financial statements that lists the income and expenses of business for an accounting year is called income statement. It is prepared at the end of accounting period to know the profitability of the` business.
b.
To compute: The
Free Cash Flow: The cash generated over and above required by business operations and capital expenditure is called free cash flow. Statement of cash flow reports the cash flow generated or consumed by the business.
c.
To explain: The large increase in dividends in 2019.
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Chapter 3 Solutions
FUND.OF FINANCIAL MGMT:CONCISE-MINDTAP
- FREE CASH FLOW Arlington Corporation’s financial statements (dollars and shares are in millions) are provided here. a. What was net operating working capital for 2018 and 2019?Assume that all cash is excess cash; i.e., this cash is not needed foroperating purposes.b. What was Arlington's 2019 free cash flow?c. Construct Arlington's 2019 statement of stockholders' equity.d. What was Arlington's 2019 EVA? Assume that its after-tax cost ofcapital is 10%.e. What was Arlington's MVA at year-end 2019? Assume that itsstock price at December 31, 2019 was $25.arrow_forwardAs part of your analysis, you are required to investigate Insignia Corporation Limited’s cash flows. Required: Using the financial statement provided: Calculate the following for 2020: Cash Flow from Assets Cash Flow to Creditors Cash Flow to Stockholdersarrow_forwardYou work as a freelance accounting professional and have been recently engaged by the auditors of Life-Positive Inc. for an assignment. In examining the company's records, you have extracted the following information: Life-Positive's Account 2021 ($) Balances Accounts Payable 24,600.00 21,250.00 Accounts receivable 15,700.00 12,340.00 2022 ($) Cash 23,450.00 28,600.00 Cost of goods sold 19,700.00 23,000.00 Depreciation 3,090.00 4,590.00 Dividends 5,800.00 10,800.00 2,890.00 Inventory 7,050.00 8,640.00 Long-term debt 28,000.00 30,000.00 Net fixed assets 41,500.00 48,000.00 Other expenses 2,400.00 2,800.00 Interest 2,340.00 Sales 58,000.00 62,500.00 Short-term Notes Payable 2,890.00 2,340.00 The tax rate is 32% Shares outstanding 85,000.00 90,000.00arrow_forward
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- Fundamentals Of Financial Management, Concise Edi...FinanceISBN:9781337902571Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage Learning