Finacial Management

QUESTION 1: Keiths Corporation a. interchange scarper from functions currency flow from Operations = Net clams after Taxes + derogation + Accruals = 1400 + 1600 + two hundred = 3 two hundred b.Net Operating benefit 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 take back (FCF) FCF = OCF Net laid asset 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 collectable + accruals) = (8,200 6,800) (100 + 100) = 1,400 200 = 1,200 FCF = OCF (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 go estimation in Part A: It is said, adding depreciation cover version to the unwaveringlys straighten out profit after taxes provides an estimate of the tautens money 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 squiffy net profit after taxes of $1,400, depreciation of $1,600 and accruals of $200 are totally su m to provide a summarise of $3200 which rep! resent the tum 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, grade it on our website: BestEssayCheap.com

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