Question

*PLEASE PROVIDE ALL SOLUTIONS USING MICROSOFT EXCEL WITH ANY RELEVANT FORMULAS, thank you!*

You have been given the financial statements for Low Risk Inc. You have been asked to determine the free cash flow (FCF) for 2014.

Answer: $16,800

I have provided the answer for reference, I just need to know how to get there.

Income Statement
	2013	2014
Sales	80,000	120,000
Cost of Goods Sold	32,000	48,000
Gross Margin	48,000	72,000
Selling Expense	8,000	12,000
EBITDA	40,000	60,000
Depreciation	4,000	6,000
EBIT	36,000	54,000
interest	150	200
Earnings before taxes	35,850	53,800
taxes	14,340	21,520
Net Income	21,510	32,280

Balance Sheet
Assets	2013	2014		Liabilities and Shareholder’s Equity	2013	2014
Cash	2,400	3,600		Accounts Payable	8,800	13,200
Accounts Receivable	9,600	14,400		Short-term Debt	1,500	1,200
Inventory	12,000	18,000		Total Current Liabilities	10,300	14,400
Total Current Assets	24,000	36,000		Long Term Debt	600	700
Net Plant & Equipment	16,000	24,000		Total Liabilities	10,900	15,100
Total Assets	40,000	60,000		Common Stock	2,600	2,800
				Retained Earnings	26,500	42,100
				Total Equity	29,100	44,900
				Total Liabilities & Equity	40,000	60,000

Answer 1

Free Cash flow (FCF) for 2014 = Operating Cash flow for 2014 - Capital expenditure for 2014
Calculation of operating cash flow for 2014
Net Income for 2014	$32,280.00
Depreciation	$6,000.00
Increase in Current assets	-$12,000.00
Increase in Current Liabilities	$4,100.00
Operating Cash flow for 2014	$30,380.00
Capital expenditure for 2014
Net Plant & Equipment 2014	$24,000.00
Add : Depreciation for 2014	$6,000.00
Less : Net Plant & Equipment 2013	$16,000.00
Capital expenditure for 2014	$14,000.00
Free Cash flow (FCF) for 2014 = $30,380 - $14,000
Free Cash flow (FCF) for 2014 =	$16,380.00