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a) Calculate Net Working

Capital for 2018 and 2019 for Econ Corporation.


b) Calculate the Operating Cash Flow for 2019 for Econ Corporation.


c) Calculate the Free Cash Flow for 2019 for Econ Corporation.


d) Calculate the Free Cash Flow to Creditors and the Free Cash Flow to Shareholders for 2019 for Econ Corporation.


e) Net Fixed Assets are Gross Fixed Assets - Accumulated Depreciation. Using the numbers given for Econ Corporation, is it true that ∆Gross Fixed Assets - ΔNet Fixed Assets = Depreciation?


f) Briefly explain, if Econ Corporation were to pay down all their corporate bonds in 2020, all else the same would this increase, decrease or not affect the Free Cash Flow to shareholders in 2020?

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Top Answer

Answer a) Commercial paper are usually short term and are issued against inventory or accounts payable Answer e) No. Gross... View the full answer

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Answer b)
Particulars
2019
Sales
70
Less: COGS
40
Less: Interest
8
Less: Depreciation(80-60)
20
PBT
2
Less: Taxes
0.4
PAT
1.6
Add: Depreciation
20
Operating Cash Flow
21.6
Answer c)
Operating Cash...

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