Use the information to answer the two questions... 17 what is the fcf for marsh
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Question
Use the information to answer the two questions...17 what is the fcf for marsh
18 how much in new equity did marsh issue Use the following information/data to answer the next two questions Marsh Balance Sheet Cash Accounts Receivable Inventory Total Current Assets Net Fixed Assets Non-Operating Assets 2005 2004 2005 2004 850 100 900 150 400 300 1,450 1,250 6,000 5,750 2,250 2,500 200 Accounts Payables 1,700 1,400 1,000 Short-term Debt 1800 1500 Other Current Liabilities 4,900 9,500 10,500 2,700 Total Current Liabilities Long-term Debt 1100 1,300 Non-Operating Liabilities Total Equity 5,8005,000 15,500 14,500 Total Equity and Debt 15,500 14,500 Total Assets Tax Rate 35% Income Statement 12,000 8,500 700 1000 1,800 300 25 975 300 Sales COGS SG&A; Depreciation EBIT Interest Expense Taxes Net Income Dividends
Explanation / Answer
17.
Free cash flow (FCF) = Net income + Depreciation + Interest expense + Decrease in current asset + Increase in current liabilities – Increase in current asset – Decrease in current liabilities – Capital expenditure – Non-operating expenditure + Non-operating liability
= 975 + 1,000 + 300 + 0 + (1,450 – 1,250) – (4,900 – 2,700) – 0 – (9,500 – 10,500) – (1,100 – 1,300) + (2,250 – 2,500)
= 2,275 + 200 – 2,200 + 1,000 + 200 – 250
= $1,225 (Answer)
18.
New equity issued = Difference in total equity
= 15,500 – 14,500
= $1,000 (Answer)
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