Finacial Management

QUESTION 1: Keiths Corporation a. interchange determine from consummations currency fertilize from Operations = Net meshing after Taxes + derogation + Accruals = 1400 + 1600 + two hundred = 3cc b.Net Operating scratch after Taxes (NOPAT) NOPAT = EBIT × (1 T) = 2,700 × (1 - .4) = 2,700 × 0.6 = 1,620 c.Operating Cash guide (OCF) OCF = NOPAT + Depreciation = 1,620 + 1,600 = 3,220 d.Free Cash take in (FCF) FCF = OCF Net laid asset Investments (NFAI) Net underway Asset Investment (NCAI) Therefore, NFAI = metamorphose in Fixed Assets + Depreciation = (15,000 14,800) + 1,600 = 200 + 1,600 = 1,800 NCAI = Change in Current Assets Change in (accounts payable + accruals) = (8,200 6,800) (100 + 100) = 1,400 200 = 1,200 FCF = OCF (NFAI) (NCAI) = 1,620 1,800 1,200 = -1,380 e.Interpret, compare and contrast your change flow predicts in parts a, c and d. Cash period estimation in Part A: It is said, adding depreciation cover version to the potents clear profit after taxes provides an estimate of the blind drunks money flow from operation. Cash Flow from Operation represents that the net profit after taxes is added to the depreciation and early(a) non-cash charges. The stanch net profit after taxes of $1,400, depreciation of $1,600 and accruals of $200 are all in all sum to provide a summarise of $3200 which represent the mass cash flow from operation in during 2009. Cash Flow estimation in Part C: A firms Operating Cash Flow OCF is the cash flow it generates from its normal operations (producing and selling its yield of goods and services). However, the firms Net Operating Profits after Taxes (NOPAT) of $1,620 is added to the firm s depreciation of $1,600 which gives a total! of $3,220. Therefore, Keiths Corporation generated $3,220 of cash flow from producing and...If you want to get a full essay, hostel it on our website: BestEssayCheap.com

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