Finacial Management

QUESTION 1: Keiths Corporation a. interchange picture from carrying into actions currency menses from Operations = Net benefit after Taxes + derogation + Accruals = 1400 + 1600 + two hundred = 3 two hundred b.Net Operating get after Taxes (NOPAT) NOPAT = EBIT × (1 T) = 2,700 × (1 - .4) = 2,700 × 0.6 = 1,620 c.Operating Cash guide (OCF) OCF = NOPAT + Depreciation = 1,620 + 1,600 = 3,220 d.Free Cash sire (FCF) FCF = OCF Net laid plus Investments (NFAI) Net underway Asset Investment (NCAI) Therefore, NFAI = metamorphose in Fixed Assets + Depreciation = (15,000 14,800) + 1,600 = 200 + 1,600 = 1,800 NCAI = Change in Current Assets Change in (accounts due + accruals) = (8,200 6,800) (100 + 100) = 1,400 200 = 1,200 FCF = OC F (NFAI) (NCAI) = 1,620 1,800 1,200 = -1,380 e.Interpret, compare and contrast your change flow predicts in parts a, c and d.

Cash melt estimation in Part A: It is said, adding depreciation cover version to the unassailables clear profit after taxes provides an estimate of the signs interchange flow from operation. Cash Flow from Operation represents that the net profit after taxes is added to the depreciation and early(a) non-cash charges. The unwaveringly net profit after taxes of $1,400, depreciation of $1,600 and accruals of $200 are every last (predicate) sum to provide a summarise of $! 3200 which represent the community cash flow from operation in during 2009. Cash Flow estimation in Part C: A firms Operating Cash Flow OCF is the cash flow it generates from its normal operations (producing and selling its yield of goods and services). However, the firms Net Operating Profits after Taxes (NOPAT) of $1,620 is added to the firms depreciation of $1,600 which gives a total of $3,220. Therefore, Keiths Corporation generated $3,220 of cash flow from producing and...If you want to get a full essay, point it on our website: BestEssayCheap.com

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