Question

In 2019, Macy’s Co. had the EBIT (earnings before interest and tax) of $1,162, taxes of $164. At the end of 2019, its current assets are $6,810, current liabilities are $5,750, and fixed assets are $14,362. At the end of 2018, its current assets are $7,445, current liabilities are $5,232, and fixed assets are $11,749. The depreciation expense in 2019 is $981. Compute the free cash flow in 2019 for Macy’s. (Note that figures are in millions)

Answer 1

EBIT	$          1,162
Less:
Taxes	$              164
Net Income	$              998
Add:
Depreciation	$              981
Decrease In Working Capital	$          1,153
[($7445-5232)- (6810-5750)]
Less:
Capital Expenditure	$         -2,613
($14362-11749)
Free Cash Flow	$              519