Chapter 3 Minicase HW - Chapter 3 HW Sales has increased by...

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Chapter 3 HW a. Sales has increased by $2,402,000 from 06 to 07, but do to the expansion the COGS increased substantially cutting into NI, causing it to be a shortfall for the ’07 year. The expansion did increase assets for the 07’ year mainly from increase in AR and larger inventory and the expansion increased liabilities by two-folds from the increase of notes payable and long-term debt b. We can say that in order to make the expansion occur, Computron had to take large loans from banks and and issuing notes payables. The investing activities show a negative because available cash was used to expand the companies operations, meaning more machinery, raw materials, etc. were bought c. FCF is the cash that is available for distribution to the investors to the company after all the necessary cash needed for investment into assets and working capital has been made. It is important because the value of a company depends on the FCF is has available; the greater the amount, the better. Uses of FCF are:
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This note was uploaded on 04/14/2008 for the course BA 4347 taught by Professor Anderson during the Spring '08 term at University of Texas at Dallas, Richardson.

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Chapter 3 Minicase HW - Chapter 3 HW Sales has increased by...

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