Q1B - beginning of period invested capital Dividends for 1995 are $85 ABC paid off it’s short term debt in 1995 and sold additional common shares

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QUIZ ONE: BUSINESS 312, Day Section Answer this quiz directly on this sheet of paper. You can use the back if necessary. The following information is available on the financial accounts of ABC Corporation. 1995 Sales 1,600 Cost of Goods Sold 800 General and Administrative Expenses 250 interest 50 depreciation 40 tax at 40% 184 1994 1995 Accounts Receivable 150 ? Inventory 200 ? Net Fixed Assets ? ? Short Term Debt 500 ? Accounts Payable 100 ? Equity ? ? “Equity” represents the sum of all of the accounting equity accounts. The following additional financial information is available for ABC. The rate of return on invested capital (b.o.p.) after tax and after depreciation for 1995 is 15.3%. This return is calculated as EBITDA less depreciation times one minus the tax rate divided by
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Unformatted text preview: beginning of period invested capital. Dividends for 1995 are $85. ABC paid off it’s short term debt in 1995 and sold additional common shares. In 1995, inventory turnover was 4.0, the accounts payable deferral period was 40 days, and the cash conversion cycle was 60 days. The component ratios of the cash conversion cycle are calculated using 365 days in a year. In addition, these ratios use only the 1995 financial statements (i.e., not beginning of period balance sheet amounts). Capital expenditure in 1995 was $135. Required: Based on the information at hand, use the methodologies developed in class to find free cash flow using both the operational and the financial definitions for 1995. Solution...
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This note was uploaded on 02/10/2011 for the course BUS 312 taught by Professor Alan during the Spring '03 term at Simon Fraser.

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