Question

Please calculate the expected free cash flow (FCF) for year 2024 given the following information: Income...

  1. Please calculate the expected free cash flow (FCF) for year 2024 given the following information:
Income Statement
2023 E 2024 E
Sales 11388031 14804441
COGS except depr. 7102598 8523118
Other expenses 714603.5 778917.8
Depreciation 138240 165888
       Total Expenses 7955442 9467924
        EBIT 3432589 5336517
Int. expense 987681.9 967651.3
        EBT 2444907 4368865
Taxes (21%) 513430.6 917461.7
Net Income 1931477 3451404
Balance Sheet: Asset
2023 E 2024 E
Cash 24336 31636.8
S-T Investment 80216.06 96259.28
Accounts Receivable (AR) 1448636 2028090
Inventories 1529384 1376445
Total CA 3082572 3532432
Net FA 1202003 1298163
Total Assets 4284575 4830595
Balance Sheet: Liabilities & Equity
2023 E 2024 E
Accounts Payable (AP) 419904 503884.8
Notes Payable (NP) 1460160 1898208
Accruals 402135.6 482562.7
Total CL 2282200 2884655
Long-term debt 1382777 1286742
Common Stock 487600 487600
Retained Earnings 131998.5 171598
Total Equity 619598.5 659198
Total L&E 4284575 4830595
Business   Finance   
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Homework Answers

Answer #1

FCF = Free Cash Flow

FCF is calculated as follows

FCF = net income + non-cash expenses – change in working capital – change in Capital expenditures

Net income for 2024 = 3451404

Non cash expenses = Depreciation and Amortization= 165888

Change in working capital = working capital of 2024 - working capital of 2023

working capital of 2024 = current assets – current liabilities = 3532432 - 2884655 = 647777

working capital of 2023 = current assets – current liabilities = 3082572 – 2282200 = 800372

Change in working capital = 647777 – 800372 = -152595

Change in Capital expenditures = PPE in 2024 – PPE in 2023 + Depreciation and Amortization

PPE = Plant property and equipment = fixed assets

change in Capital expenditures = 1298163 – 1202003 + 165888 = 262048

FCF = 3451404 + 165888 - (-152595) – 262048 = 3507839

Therefore FCF for year 2024 = 3507839

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