3-14 FREE CASH FLOW Arlington Corporation's financial statements (dollars and shares are in millions) are provided here. Assets Cash and equivalents Accounts receivable Inventories Total current assets Net plant and equipment Total assets Liabilities and Equity Accounts payable Accruals Notes payable Total current liabilities Long-term bonds Total liabilities Common stock (4,000 shares) Retained earnings Common equity Total liabilities and equity Balance Sheets as of December 31 EBIT Interest EBT Taxes (40%) Net income 2018 $ 15,000 35,000 33,320 $ 83,320 48,000 $131,320 $ 10,100 8,000 7,000 $ 25,100 20,000 $ 45,100 40,000 46,220 $ 86,220 $131,320 Sales Operating costs excluding depreciation and amortization EBITDA Depreciation and amortization Income Statement for Year Ending December 31, 2018 2017 $ 14,000 30,000 27,000 $ 71,000 46,000 $117,000 $ 9,000 6,000 5,050 $ 20,050 20,000 $ 40,050 40,000 36,950 $ 76,950 $117,000 $210,000 160,000 $ 50,000 6,000 $44,000 5,350 $ 38,650 15,460 $ 23,190 $ 13,920 Dividends paid a. What was net operating working capital for 2017 and 2018? Assume that all cash is excess cash; i.e., this cash is not needed for operating purposes. b. What was Arlington's 2018 free cash flow? c. Construct Arlington's 2018 statement of stockholders' equity,
3-14 FREE CASH FLOW Arlington Corporation's financial statements (dollars and shares are in millions) are provided here. Assets Cash and equivalents Accounts receivable Inventories Total current assets Net plant and equipment Total assets Liabilities and Equity Accounts payable Accruals Notes payable Total current liabilities Long-term bonds Total liabilities Common stock (4,000 shares) Retained earnings Common equity Total liabilities and equity Balance Sheets as of December 31 EBIT Interest EBT Taxes (40%) Net income 2018 $ 15,000 35,000 33,320 $ 83,320 48,000 $131,320 $ 10,100 8,000 7,000 $ 25,100 20,000 $ 45,100 40,000 46,220 $ 86,220 $131,320 Sales Operating costs excluding depreciation and amortization EBITDA Depreciation and amortization Income Statement for Year Ending December 31, 2018 2017 $ 14,000 30,000 27,000 $ 71,000 46,000 $117,000 $ 9,000 6,000 5,050 $ 20,050 20,000 $ 40,050 40,000 36,950 $ 76,950 $117,000 $210,000 160,000 $ 50,000 6,000 $44,000 5,350 $ 38,650 15,460 $ 23,190 $ 13,920 Dividends paid a. What was net operating working capital for 2017 and 2018? Assume that all cash is excess cash; i.e., this cash is not needed for operating purposes. b. What was Arlington's 2018 free cash flow? c. Construct Arlington's 2018 statement of stockholders' equity,
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Pls help correct thanks all parts correct
Transcribed Image Text:3-14
FREE CASH FLOW Arlington Corporation's financial statements (dollars and shares are in
millions) are provided here.
Assets
Cash and equivalents
Accounts receivable
Inventories
Total current assets
Net plant and equipment
Total assets
Liabilities and Equity
Accounts payable
Accruals
Notes payable
Total current liabilities
Long-term bonds
Total liabilities
Common stock (4,000 shares)
Retained earnings
Common equity
Total liabilities and equity
Balance Sheets as of December 31
2018
$ 15,000
35,000
33,320
$ 83,320
48,000
$131,320
$ 10,100
8,000
7,000
$ 25,100
20,000
$ 45,100
40,000
46,220
$ 86,220
$131,320
Income Statement for Year Ending December 31, 2018
Sales
Operating costs excluding depreciation and amortization
EBITDA
Depreciation and amortization
2017
b. What was Arlington's 2018 free cash flow?
c. Construct Arlington's 2018 statement of stockholders' equity.
$ 14,000
30,000
27,000
$ 71,000
46,000
$ 117,000
$ 9,000
6,000
5,050
$ 20,050
20,000
$ 40,050
40,000
36,950
$ 76,950
$ 117,000
$210,000
160,000
$ 50,000
6,000
$ 44,000
5,350
$ 38,650
15,460
$ 23,190
$ 13,920
EBIT
Interest
EBT
Taxes (40%)
Net income
Dividends paid
a. What was net operating working capital for 2017 and 2018? Assume that all cash is
excess cash; i.e., this cash is not needed for operating purposes.
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