Free Cash Flow Assignment

INSTRUCTIONS FOR FREE CASH FLOW

Use the financial statements below to calculate the firm’s Free Cash Flow according to the method used FCF calculation on the Discussion Board.  

Use the method from postings to calculate FCF and post your calculation. Provide the numbers for this calculation: CF = OCF - NWC - NCS. Ultimately, there are about 7 calculations, but you can provide just a summary of the calculations for this formula: FCF = OCF - NWC - NCS.

Real Time Corporation

Balance Sheet as of December 31, 2016 and 2015 (000 omitted)

2015 2016 2015 2016

Cash $500 $500 Accounts Payable $ 350 $ 400

Accounts Receivable 460 600 Other CL 644 726

Inventory 1,180 1,246 Total CL 994 1,126

Total CA 2,140 2,346 Long-term debt 2,869 2,956

Net Fixed Assets 5,770 6,087 Total Liabilities 3,863 4,082

Other Assets 1,000 1,000 Equity:

Total Assets 8,910 9,433 Common Stock 1,000 1,000

Addl. Paid in Surplus 2,200 2,200

Retained Earnings 1,847 2,151

Total Equity 5,047 5,351

Total Liab & St. Equity 8,910 9,433

Real Time Corporation

2016 Income Statement (000 omitted)

Sales $3,990

Cost of Goods Sold 2,137

Depreciation 1,018

EBIT 835

Interest Expense 267

Taxable Income 568

Taxes (34%) 193

Net Income 375

Dividends $ 225

Addition to Ret. Earnings 150