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Quantitative Problem: Rosnan Industries' 2019 and 2018 balance sheets and income statements are shown below. Balance Sheets   2019 2018 Assets     Cash and equivalents $100   $85   Accounts receivable 275   300   Inventories 375   250         Total current assets $750   $635   Net plant and equipment 2,300   1,490   Total assets $3,050   $2,125   Liabilities and Equity     Accounts payable $150   $85   Accruals 75   50   Notes payable 150   75         Total current liabilities $375   $210   Long-term debt 450   290         Total liabilities 825   500   Common stock 1,225   1,225   Retained earnings 1,000   400   Common equity 2,225   1,625   Total liabilities and equity $3,050   $2,125   Income Statements   2019 2018 Sales $2,065   $1,525   Operating costs excluding depreciation and amortization 1,250   1,000   EBITDA $815   $525   Depreciation and amortization 100   75   EBIT $715   $450   Interest 63   46   EBT $652   $404   Taxes (25%) 163   101   Net income $489   $303         Dividends paid $54   $48   Addition to retained earnings $435   $255         Shares outstanding 100   100   Price $25.00   $22.50   WACC 10.00%        The balance in the firm's cash and equivalents account is needed for operations and is not considered "excess" cash. Using the financial statements given above, what is Rosnan's 2019 free cash flow (FCF)? Use a minus sign to indicate a negative FCF. Round your answer to the nearest cent.

Quantitative Problem: Rosnan Industries' 2019 and 2018 balance sheets and income statements are shown below. Balance Sheets   2019 2018 Assets     Cash and equivalents $100   $85   Accounts receivable 275   300   Inventories 375   250         Total current assets $750   $635   Net plant and equipment 2,300   1,490   Total assets $3,050   $2,125   Liabilities and Equity     Accounts payable $150   $85   Accruals 75   50   Notes payable 150   75         Total current liabilities $375   $210   Long-term debt 450   290         Total liabilities 825   500   Common stock 1,225   1,225   Retained earnings 1,000   400   Common equity 2,225   1,625   Total liabilities and equity $3,050   $2,125   Income Statements   2019 2018 Sales $2,065   $1,525   Operating costs excluding depreciation and amortization 1,250   1,000   EBITDA $815   $525   Depreciation and amortization 100   75   EBIT $715   $450   Interest 63   46   EBT $652   $404   Taxes (25%) 163   101   Net income $489   $303         Dividends paid $54   $48   Addition to retained earnings $435   $255         Shares outstanding 100   100   Price $25.00   $22.50   WACC 10.00%        The balance in the firm's cash and equivalents account is needed for operations and is not considered "excess" cash. Using the financial statements given above, what is Rosnan's 2019 free cash flow (FCF)? Use a minus sign to indicate a negative FCF. Round your answer to the nearest cent.

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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Quantitative Problem: Rosnan Industries' 2019 and 2018 balance sheets and income statements are shown below.

Balance Sheets
  2019 2018
Assets    
Cash and equivalents $100   $85  
Accounts receivable 275   300  
Inventories 375   250  
      Total current assets $750   $635  
Net plant and equipment 2,300   1,490  
Total assets $3,050   $2,125  
Liabilities and Equity    
Accounts payable $150   $85  
Accruals 75   50  
Notes payable 150   75  
      Total current liabilities $375   $210  
Long-term debt 450   290  
      Total liabilities 825   500  
Common stock 1,225   1,225  
Retained earnings 1,000   400  
Common equity 2,225   1,625  
Total liabilities and equity $3,050   $2,125  



Income Statements
  2019 2018
Sales $2,065   $1,525  
Operating costs excluding depreciation and amortization 1,250   1,000  
EBITDA $815   $525  
Depreciation and amortization 100   75  
EBIT $715   $450  
Interest 63   46  
EBT $652   $404  
Taxes (25%) 163   101  
Net income $489   $303  
     
Dividends paid $54   $48  
Addition to retained earnings $435   $255  
     
Shares outstanding 100   100  
Price $25.00   $22.50  
WACC 10.00%     

 

The balance in the firm's cash and equivalents account is needed for operations and is not considered "excess" cash.

Using the financial statements given above, what is Rosnan's 2019 free cash flow (FCF)? Use a minus sign to indicate a negative FCF. Round your answer to the nearest cent.

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