Home / Expert Answers / Finance / quantitative-problem-rosnan-industries-39-2020-and-2019-balance-sheets-and-income-statements-are-sho-pa532

(Solved): Quantitative Problem: Rosnan Industries' 2020 and 2019 balance sheets and income statements are show ...



Quantitative Problem: Rosnan Industries' 2020 and 2019 balance sheets and income statements are shown below.

Balance Sheets:
20202019
Assets
Cash and equivalents$100 $85
Accounts receivable275 300
Inventories375 250
Total current assets$750 $635
Net plant and equipment2,300 1,490
Total assets$3,050 $2,125
Liabilities and Equity
Accounts payable$150 $85
Accruals75 50
Notes payable150 75
Total current liabilities$375 $210
Long-term debt450 290
Total liabilities$825 $500
Common stock1,225 1,225
Retained earnings1,000 400
Total common equity$2,225 $1,625
Total liabilities and equity$3,050 $2,125



Income Statements:
20202019
Sales$2,345 $1,565
Operating costs excluding depreciation1,250 1,000
EBITDA$1,095 $565
Depreciation and amortization100 75
EBIT$995 $490
Interest63 46
EBT$932 $444
Taxes (25%)233 111
Net income$699 $333
Dividends paid$99 $33
Addition to retained earnings$600 $300
Shares outstanding100 100
Price$25.00 $22.50
WACC10.00%

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 2020 free cash flow (FCF)? Cash outflow, if any, should be indicated by a minus sign. Round your answer to the nearest cent.



We have an Answer from Expert

View Expert Answer

Expert Answer



We have an Answer from Expert

Buy This Answer $5

Place Order

We Provide Services Across The Globe