Q1C - Dividends for 1995 are $95. ABC incremented the level...

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QUIZ ONE: BUSINESS 312, Evening 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 ? Cost of Goods Sold ? General and Administrative Expenses 250 interest 50 depreciation 40 tax at 40% 274 1994 1995 Accounts Receivable 150 200 Inventory ? ? Net Fixed Assets ? 3056 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 15.0%. This return is calculated as EBITDA less depreciation times one minus the tax rate divided by beginning of period invested capital.
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Unformatted text preview: Dividends for 1995 are $95. ABC incremented the level of its short term debt by $300 in 1995. ABC repurchased $200 of its outstanding shares in 1995. Incremental investment in trade capital in 1995 was $145. In 1995, inventory turnover was 4.0, the accounts receivable collection period was 40 days. The accounts receivable collection period is calculated using 365 days in a year. In addition, inventory turnover and the accounts receivable collection period use only the 1995 financial statements (i.e., not beginning of period balance sheet amounts). 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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