EBK FUNDAMENTALS OF CORPORATE FINANCE
9th Edition
ISBN: 9781260049237
Author: BREALEY
Publisher: MCGRAW HILL BOOK COMPANY
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Textbook Question
Chapter 3, Problem 6QP
Financial Statements. South Sea Baubles has the following (incomplete)
- a. What is shareholders’ equity in 2015?
- b. What is shareholders’ equity in 2016?
- c. What is net working capital in 2015?
- d. What is net working capital in 2016?
- e. What are taxes paid in 2016? Assume the firm pays taxes equal to 35% of taxable income.
- f. What is cash provided by operations during 2016? Pay attention to changes in net working capital, using Table 3.4 as a guide.
- g. Net fixed assets increased from $800 million to $900 million during 2016. What must have been South Sea’s gross investment in fixed assets during 2016?
- h. If South Sea reduced its outstanding accounts payable by $35 million during the year, what must have happened to its other current liabilities?
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Question Description
Use the table below to answer the questions.
2014
Sales
COGS
Interest
Depreciation
Cash
Accounts receivables
Current liabilities
Inventory
Long-term debt
Net fixed assets
Shareholder's equity
Taxes
$6,318
3.945
303
1,204
672
601
414
1,215
4,780
7,700
4,994
217
1. What is the change in net working capital from 2014 to 2015?
2. What is the net capital spending for 2015?
2015
$7,202
4,460
277
1,196
418
578
463
1,598
4,103
7,330
5.358
317
Cash flow to owners. Use the data from the following financial statements in the popup window,. The company
paid interest expense of $18,900 for 2017 and had an overall tax rate of 40% for 2017. Find the cash flow to owners for
2017 by parts and total, with the parts being dividends paid and increases in borrowing from owners (change in common
stock and paid-in-surplus).
The distributed earnings is $
Net new borrowing from owners is $
The cash flow to owners is $
(Round to the nearest dollar.)
(Round to the nearest dollar.)
(Round to the nearest dollar.)
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).
Chapter 3 Solutions
EBK FUNDAMENTALS OF CORPORATE FINANCE
Ch. 3 - Prob. 1QPCh. 3 - Prob. 2QPCh. 3 - Balance Sheet. Construct a balance sheet for...Ch. 3 - Income Statement. A firm’s income statement...Ch. 3 - Prob. 5QPCh. 3 - Financial Statements. South Sea Baubles has the...Ch. 3 - Prob. 8QPCh. 3 - Prob. 9QPCh. 3 - Prob. 10QPCh. 3 - Prob. 11QP
Ch. 3 - Prob. 12QPCh. 3 - Prob. 13QPCh. 3 - Prob. 14QPCh. 3 - Working Capital. QuickGrow is in an expanding...Ch. 3 - Prob. 16QPCh. 3 - Prob. 17QPCh. 3 - Prob. 18QPCh. 3 - Prob. 19QPCh. 3 - Prob. 20QPCh. 3 - Free Cash Flow. Free cash flow measures the cash...Ch. 3 - Prob. 24QPCh. 3 - Prob. 25QPCh. 3 - Prob. 26QPCh. 3 - Prob. 27QPCh. 3 - Prob. 28QPCh. 3 - Prob. 29QPCh. 3 - Prob. 31QPCh. 3 - Prob. 32QPCh. 3 - Prob. 33QPCh. 3 - Prob. 34QPCh. 3 - Prob. 35QPCh. 3 - Prob. 36QPCh. 3 - Prob. 37QPCh. 3 - Prob. 38QP
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