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Imaginary Dreams Inc. provides the following income statement and balance sheet: For the year ending 2013 For the year ending 2012 Sales 1,548,000 1,642,500 Less, Cost of Goods Sold 695,700 755,000 Gross Profit 852,300 887,500 Less, Operating Expenses: Depreciation 33,090 40,590 Other Expenses 242,400 552,800 Total Operating Expense 275,490 593,390 Operating Profit (EBIT) 576,810 294,110 Less, Interest 112,340 129,890 Net Profit before taxes 464,470 164,220 Less, Taxes @40% 185,788 65,688 Net Profit after taxes 278,682 98,532 Less, Dividend 115,800 110,800 Addition to Retained Earnings 162,882 (12,268) Assets As at end of 2012 As at end Liabilities and Equity of 2013 As at end of 2012 As at end of 2013 Current Assets: Current Liabilities: Cash 223,450 228,600 A/P 124,600 121,250 A/R 115,700 112,340 N/P 32,890 32,340 Inventory 74,050 84,640 Total Current Liabilities 157,490 153,590 Total Current Assets 413,200 425,580 Long Term Debt 628,000 730,000 Net Fixed Assets 1,241,500 1,460,000 Total Liabilities 785,490 883,590 Stockholders' Equity: Retained Earnings 162,882 150,614 Equity Capital 706,328 851,376 Total Stockholders' Equity 869,210 1,001,990 Total Assets 1,654,700 1,885,580 Total Liabilities and Stockholders' 1,654,700 1,885,580 Equity Compute the FCF for the company for the year 2013 and depending on your answer, choose the most correct statement from the options given below: O a. The company is highly profitable and using its cash flow to fund new investments. O b. The company is having idle cash in its bank account O c. The company has most likely undertaken risky projects such that its FCF is what it is. O d. The company has limited internal cash generation and is investing heavily in new

Imaginary Dreams Inc. provides the following income statement and balance sheet: For the year ending 2013 For the year ending 2012 Sales 1,548,000 1,642,500 Less, Cost of Goods Sold 695,700 755,000 Gross Profit 852,300 887,500 Less, Operating Expenses: Depreciation 33,090 40,590 Other Expenses 242,400 552,800 Total Operating Expense 275,490 593,390 Operating Profit (EBIT) 576,810 294,110 Less, Interest 112,340 129,890 Net Profit before taxes 464,470 164,220 Less, Taxes @40% 185,788 65,688 Net Profit after taxes 278,682 98,532 Less, Dividend 115,800 110,800 Addition to Retained Earnings 162,882 (12,268) Assets As at end of 2012 As at end Liabilities and Equity of 2013 As at end of 2012 As at end of 2013 Current Assets: Current Liabilities: Cash 223,450 228,600 A/P 124,600 121,250 A/R 115,700 112,340 N/P 32,890 32,340 Inventory 74,050 84,640 Total Current Liabilities 157,490 153,590 Total Current Assets 413,200 425,580 Long Term Debt 628,000 730,000 Net Fixed Assets 1,241,500 1,460,000 Total Liabilities 785,490 883,590 Stockholders' Equity: Retained Earnings 162,882 150,614 Equity Capital 706,328 851,376 Total Stockholders' Equity 869,210 1,001,990 Total Assets 1,654,700 1,885,580 Total Liabilities and Stockholders' 1,654,700 1,885,580 Equity Compute the FCF for the company for the year 2013 and depending on your answer, choose the most correct statement from the options given below: O a. The company is highly profitable and using its cash flow to fund new investments. O b. The company is having idle cash in its bank account O c. The company has most likely undertaken risky projects such that its FCF is what it is. O d. The company has limited internal cash generation and is investing heavily in new

Essentials Of Investments
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
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Imaginary Dreams Inc. provides the following income statement and balance sheet: For the year ending 2013 For the year ending 2012 Sales 1,548,000 1,642,500 Less, Cost of Goods Sold 695,700 755,000 Gross Profit 852,300 887,500 Less, Operating Expenses: Depreciation 33,090 40,590 Other Expenses 242,400 552,800 Total Operating Expense 275,490 593,390 Operating Profit (EBIT) 576,810 294,110 Less, Interest 112,340 129,890 Net Profit before taxes 464,470 164,220 Less, Taxes @40% 185,788 65,688 Net Profit after taxes 278,682 98,532 Less, Dividend 115,800 110,800 Addition to Retained Earnings 162,882 (12,268)
Transcribed Image Text:Imaginary Dreams Inc. provides the following income statement and balance sheet: For the year ending 2013 For the year ending 2012 Sales 1,548,000 1,642,500 Less, Cost of Goods Sold 695,700 755,000 Gross Profit 852,300 887,500 Less, Operating Expenses: Depreciation 33,090 40,590 Other Expenses 242,400 552,800 Total Operating Expense 275,490 593,390 Operating Profit (EBIT) 576,810 294,110 Less, Interest 112,340 129,890 Net Profit before taxes 464,470 164,220 Less, Taxes @40% 185,788 65,688 Net Profit after taxes 278,682 98,532 Less, Dividend 115,800 110,800 Addition to Retained Earnings 162,882 (12,268)
Assets As at end of 2012 As at end Liabilities and Equity of 2013 As at end of 2012 As at end of 2013 Current Assets: Current Liabilities: Cash 223,450 228,600 A/P 124,600 121,250 A/R 115,700 112,340 N/P 32,890 32,340 Inventory 74,050 84,640 Total Current Liabilities 157,490 153,590 Total Current Assets 413,200 425,580 Long Term Debt 628,000 730,000 Net Fixed Assets 1,241,500 1,460,000 Total Liabilities 785,490 883,590 Stockholders' Equity: Retained Earnings 162,882 150,614 Equity Capital 706,328 851,376 Total Stockholders' Equity 869,210 1,001,990 Total Assets 1,654,700 1,885,580 Total Liabilities and Stockholders' 1,654,700 1,885,580 Equity Compute the FCF for the company for the year 2013 and depending on your answer, choose the most correct statement from the options given below: O a. The company is highly profitable and using its cash flow to fund new investments. O b. The company is having idle cash in its bank account O c. The company has most likely undertaken risky projects such that its FCF is what it is. O d. The company has limited internal cash generation and is investing heavily in new
Transcribed Image Text:Assets As at end of 2012 As at end Liabilities and Equity of 2013 As at end of 2012 As at end of 2013 Current Assets: Current Liabilities: Cash 223,450 228,600 A/P 124,600 121,250 A/R 115,700 112,340 N/P 32,890 32,340 Inventory 74,050 84,640 Total Current Liabilities 157,490 153,590 Total Current Assets 413,200 425,580 Long Term Debt 628,000 730,000 Net Fixed Assets 1,241,500 1,460,000 Total Liabilities 785,490 883,590 Stockholders' Equity: Retained Earnings 162,882 150,614 Equity Capital 706,328 851,376 Total Stockholders' Equity 869,210 1,001,990 Total Assets 1,654,700 1,885,580 Total Liabilities and Stockholders' 1,654,700 1,885,580 Equity Compute the FCF for the company for the year 2013 and depending on your answer, choose the most correct statement from the options given below: O a. The company is highly profitable and using its cash flow to fund new investments. O b. The company is having idle cash in its bank account O c. The company has most likely undertaken risky projects such that its FCF is what it is. O d. The company has limited internal cash generation and is investing heavily in new
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