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# Problem 131 Free Cash Flow Use the following income statements and balance sheets to calculate Garnet Inc.'s free cash flow for 2011. Round your...

Problem 13-1 "TUTOR WILL PLEASE PLACE HOMEWORK RESULTS ON A EXCEL SPREADSHEET THANK YOU, ALSO PLEASE CHECK ATTACHED WORD DOCUMENT FOR A CLEARER PICTURE OF THE PROBLEM.
Free Cash Flow

Use the following income statements and balance sheets to calculate Garnet Inc.'s free cash flow for 2011. Round your answer to the nearest cent.
Garnet Inc.
Income Statement 2011 2010
Net sales \$530.0 \$500.0
Costs (except depreciation) 400.0 380.0
Depreciation 30.0 25.0
Total operating costs \$430.0 \$405.0
Earnings before interest and taxes (EBIT) 100.0 95.0
Less interest 23.0 21.0
Earnings before taxes \$77.0 \$74.0
Taxes (40%) 30.8 29.6
Net income 46.2 44.4

Balance Sheet 2011 2010
Assets
Cash \$28.0 \$27.0
Marketable securities 72.0 66.0
Accounts receivable 81.0 80.0
Inventories 112.0 106.0
Total current assets \$293.0 \$279.0
Net plant and equipment 281.0 265.0
Total assets \$574.0 \$544.0

Liabilities and Equity
Accounts payable \$56.0 \$52.0
Notes payable 138.0 130.0
Accruals 28.0 28.0
Total current liabilities \$222.0 \$210.0
Long-term bonds 173.0 164.0
Common stock 100.0 100.0
Retained earnings 79.0 70.0
Common equity \$179.0 \$170.0
Total liabilities and equity \$574.0 \$544.0
\$
Problem 13-1   Free Cash Flow Use the following income statements and balance sheets to calculate Garnet Inc.'s free cash flow for 2011. Round  your answer to the nearest cent. Garnet Inc. Income  Statement 2011   2010 Net sales \$530.0 \$500.0 Costs (except  depreciation) 400.0 380.0 Depreciation 30.0 25.0 Total  operating  costs \$430.0 \$405.0 Earnings  before  interest and  taxes (EBIT) 100.0 95.0 Less interest 23.0 21.0 Earnings  before taxes \$77.0 \$74.0 Taxes (40%) 30.8 29.6 Net income 46.2 44.4   Balance  Sheet 2011   2010 Assets Cash \$28.0 \$27.0 Marketable  securities 72.0 66.0 Accounts  receivable 81.0 80.0 Inventories 112.0 106.0 Total current  assets \$293.0 \$279.0 Net plant and  equipment 281.0 265.0 Total assets \$574.0 \$544.0   Liabilities and Equity Accounts payable \$56.0 \$52.0 Notes payable 138.0 130.0 Accruals 28.0 28.0
Total current liabilities \$222.0 \$210.0 Long-term bonds 173.0 164.0 Common stock 100.0 100.0 Retained earnings 79.0 70.0 Common equity \$179.0 \$170.0 Total liabilities and equity \$574.0 \$544.0 \$

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