Forecast income statement - ALL FIGURES IN $ MILLION Financial year ending 31 March 2023 2024 2025 Revenue 165.0 180.0 210.0 Less: Operating expenses 120.0 128.0 145.0 Operating earnings before depreciation 45.0 52.0 65.0 Less: Depreciation 30.0 32.0 25.0 Earnings before interest and tax (EBIT) 15.0 20.0 40.0 Less: Interest expense 5.0 5.0 5.0 Earnings before tax 10.0 15.0 35.0 Less: Tax expense 2.8 4.2 9.8 Net profit (earnings) 7.2 10.8 25.2 In addition, you have collected the following information: Operating working capital (OWC) in each year will be 10% of revenue in that year Capital expenditure (capex) will be $25 million in each year The corporate tax rate is 28%. What is Electrix's free cash flow to the firm (FCF) in year 2025? Thanks!
Forecast income statement - ALL FIGURES IN $ MILLION Financial year ending 31 March 2023 2024 2025 Revenue 165.0 180.0 210.0 Less: Operating expenses 120.0 128.0 145.0 Operating earnings before depreciation 45.0 52.0 65.0 Less: Depreciation 30.0 32.0 25.0 Earnings before interest and tax (EBIT) 15.0 20.0 40.0 Less: Interest expense 5.0 5.0 5.0 Earnings before tax 10.0 15.0 35.0 Less: Tax expense 2.8 4.2 9.8 Net profit (earnings) 7.2 10.8 25.2 In addition, you have collected the following information: Operating working capital (OWC) in each year will be 10% of revenue in that year Capital expenditure (capex) will be $25 million in each year The corporate tax rate is 28%. What is Electrix's free cash flow to the firm (FCF) in year 2025? Thanks!
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
| Financial year ending 31 March | 2023 | 2024 | 2025 |
| Revenue | 165.0 | 180.0 | 210.0 |
| Less: Operating expenses | 120.0 | 128.0 | 145.0 |
| Operating earnings before |
45.0 | 52.0 | 65.0 |
| Less: Depreciation | 30.0 | 32.0 | 25.0 |
| Earnings before interest and tax (EBIT) | 15.0 | 20.0 | 40.0 |
| Less: Interest expense | 5.0 | 5.0 | 5.0 |
| Earnings before tax | 10.0 | 15.0 | 35.0 |
| Less: Tax expense | 2.8 | 4.2 | 9.8 |
| Net profit (earnings) | 7.2 | 10.8 | 25.2 |
In addition, you have collected the following information:
- Operating working capital (OWC) in each year will be 10% of revenue in that year
- Capital expenditure (capex) will be $25 million in each year
- The corporate tax rate is 28%.
What is Electrix's
Thanks!
Expert Solution
Given Information:
Revenue for 2025 is $210million
Working capital requirement for each year is 10% of revenue.
Depriciation for 2025 is $25 million
Tax rate is 28%
Net profit for 2025 is $25.2million
CAPEX per year is $25million in each year
To Find:
- Free Cash flow in yea 2025
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education