The net operating working capital for 2015 and 2016. Balance sheet: Balance sheet is a part of the financial statements that lists the company’s assets, liabilities and shareholders’ fund. It is prepared at last of the accounting period and informs about company’s financial position on that day. Income Statement: A part of the 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.

Question

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Answer 1

Question

Chapter 3, Problem 17P

a.

Summary Introduction

To compute: The net operating working capital for 2015 and 2016.

Balance sheet:

Balance sheet is a part of the financial statements that lists the company’s assets, liabilities and shareholders’ fund. It is prepared at last of the accounting period and informs about company’s financial position on that day.

Income Statement:

A part of the 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.

Summary Introduction

To compute: The free cash flow in 2016 for Company P.

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.

Summary Introduction

To explain: The large increase in dividends in 2016.

Balance sheet:

Balance sheet is a part of the financial statements that lists the company’s assets, liabilities and shareholders’ fund. It is prepared at last of the accounting period and informs about company’s financial position on that day.

Income Statement:

A part of the 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.

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Answer 2

Question

Chapter 3, Problem 17P

a.

Summary Introduction

To compute: The net operating working capital for 2015 and 2016.

Balance sheet:

Balance sheet is a part of the financial statements that lists the company’s assets, liabilities and shareholders’ fund. It is prepared at last of the accounting period and informs about company’s financial position on that day.

Income Statement:

A part of the 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.

Summary Introduction

To compute: The free cash flow in 2016 for Company P.

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.

Summary Introduction

To explain: The large increase in dividends in 2016.

Balance sheet:

Balance sheet is a part of the financial statements that lists the company’s assets, liabilities and shareholders’ fund. It is prepared at last of the accounting period and informs about company’s financial position on that day.

Income Statement:

A part of the 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.

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Answer 3

Question

Chapter 3, Problem 17P

a.

Summary Introduction

To compute: The net operating working capital for 2015 and 2016.

Balance sheet:

Balance sheet is a part of the financial statements that lists the company’s assets, liabilities and shareholders’ fund. It is prepared at last of the accounting period and informs about company’s financial position on that day.

Income Statement:

A part of the 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.

Summary Introduction

To compute: The free cash flow in 2016 for Company P.

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.

Summary Introduction

To explain: The large increase in dividends in 2016.

Balance sheet:

Balance sheet is a part of the financial statements that lists the company’s assets, liabilities and shareholders’ fund. It is prepared at last of the accounting period and informs about company’s financial position on that day.

Income Statement:

A part of the 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.

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Answer 4

Question

Chapter 3, Problem 17P

a.

Summary Introduction

To compute: The net operating working capital for 2015 and 2016.

Balance sheet:

Balance sheet is a part of the financial statements that lists the company’s assets, liabilities and shareholders’ fund. It is prepared at last of the accounting period and informs about company’s financial position on that day.

Income Statement:

A part of the 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.

Summary Introduction

To compute: The free cash flow in 2016 for Company P.

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.

Summary Introduction

To explain: The large increase in dividends in 2016.

Balance sheet:

Balance sheet is a part of the financial statements that lists the company’s assets, liabilities and shareholders’ fund. It is prepared at last of the accounting period and informs about company’s financial position on that day.

Income Statement:

A part of the 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.

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Answer 5

Chapter 3, Problem 17P

a.

Summary Introduction

To compute: The net operating working capital for 2015 and 2016.

Balance sheet:

Balance sheet is a part of the financial statements that lists the company’s assets, liabilities and shareholders’ fund. It is prepared at last of the accounting period and informs about company’s financial position on that day.

Income Statement:

A part of the 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.

Summary Introduction

To compute: The free cash flow in 2016 for Company P.

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.

Summary Introduction

To explain: The large increase in dividends in 2016.

Balance sheet:

Balance sheet is a part of the financial statements that lists the company’s assets, liabilities and shareholders’ fund. It is prepared at last of the accounting period and informs about company’s financial position on that day.

Income Statement:

A part of the 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.

Answer 6

Chapter 3, Problem 17P

a.

Summary Introduction

To compute: The net operating working capital for 2015 and 2016.

Balance sheet:

Balance sheet is a part of the financial statements that lists the company’s assets, liabilities and shareholders’ fund. It is prepared at last of the accounting period and informs about company’s financial position on that day.

Income Statement:

A part of the 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.

Answer 7

Chapter 3, Problem 17P

a.

Summary Introduction

To compute: The net operating working capital for 2015 and 2016.

Balance sheet:

Balance sheet is a part of the financial statements that lists the company’s assets, liabilities and shareholders’ fund. It is prepared at last of the accounting period and informs about company’s financial position on that day.

Income Statement:

A part of the 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.

Answer 8

b.

Summary Introduction

To compute: The free cash flow in 2016 for Company P.

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.

Answer 9

b.

Summary Introduction

To compute: The free cash flow in 2016 for Company P.

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.

Answer 10

c.

Summary Introduction

To explain: The large increase in dividends in 2016.

Balance sheet:

Balance sheet is a part of the financial statements that lists the company’s assets, liabilities and shareholders’ fund. It is prepared at last of the accounting period and informs about company’s financial position on that day.

Income Statement:

A part of the 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.

Answer 11

c.

Summary Introduction

To explain: The large increase in dividends in 2016.

Balance sheet:

Balance sheet is a part of the financial statements that lists the company’s assets, liabilities and shareholders’ fund. It is prepared at last of the accounting period and informs about company’s financial position on that day.

Income Statement:

A part of the 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.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 3 - Prob. 1Q Ch. 3 - Who are some of the basic users of financial...Ch. 3 - If a typical firm reports 20 million of retained...Ch. 3 - Explain the following statement: Although the...Ch. 3 - Prob. 5Q Ch. 3 - Prob. 6Q Ch. 3 - Prob. 7Q Ch. 3 - Prob. 8Q Ch. 3 - How are managements actions incorporated in EVA...Ch. 3 - Explain the following statement: Our tax rates are...

Solution Summary: The author explains that Company P has net operating working capital of 192 and 210 in 2015 and 2016.

To compute: The free cash flow in 2016 for Company P.

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.

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Chapter 3 Solutions

Solution Summary: The author explains that Company P has net operating working capital of 192 and 210 in 2015 and 2016.

To compute: The free cash flow in 2016 for Company P. 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.

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Chapter 3 Solutions

To compute: The free cash flow in 2016 for Company P.

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.