financial statements19

financial statements19 - Sebring Corporation. SEBRING...

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Free cash flow Answer: a Diff: M N i . A stock market analyst has forecasted the following year-end numbers for Raedebe Technology: Sales $70 million EBITDA $20 million Depreciation $ 7 million Amortization $ 0 The company’s tax rate is 40 percent. The company does not expect any changes in its net operating working capital. This year the company’s planned gross capital expenditures will total $12 million. (Gross capital expenditures represent capital expenditures before deducting depreciation.) What is the company’s forecasted free cash flow for the year? a. $ 2.8 million b. $ 7.0 million c. $ 8.0 million d. $12.8 million e. $26.8 million Multiple Part: (The following information applies to the next four problems.) You have just obtained financial information for the past 2 years for
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Unformatted text preview: Sebring Corporation. SEBRING CORPORATION: INCOME STATEMENTS FOR YEAR ENDING DECEMBER 31 (MILLIONS OF DOLLARS) 2002 2001 Sales $3,600.0 $3,000.0 Operating costs (excluding depreciation and amortization) 3,060.0 2,550.0 EBITDA $ 540.0 $ 450.0 Depreciation and amortization 90.0 75.0 Earnings before interest and taxes $ 450.0 $ 375.0 Interest 65.0 60.0 Earnings before taxes $ 385.0 $ 315.0 Taxes (40%) 154.0 126.0 Net income available to common stockholders $ 231.0 $ 189.0 Common dividends $ 181.5 $ 13.2 i . Free cash flow Answer: a Diff: M N FCF 1 = EBIT(1 - T) + on amortizati and on Depreciati es expenditur capital Gross- NOWC FCF 1 = ($20 - $7)(1 - 0.4 ) + $7 - $12 - $0 FCF 1 = $7.8 + $7 - $12 - $0 FCF 1 = $2.8 million....
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financial statements19 - Sebring Corporation. SEBRING...

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