Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Question - The Financial statements of ABC Steel Fabrications are as shown below with the actual results for year 2020 and the projections for year 2021. Free cash Flow is expected to grow at a rate of six percent rate after 2021. The Weighted Average Cost of Capital for the company is twelve percent.
INCOME STATEMENT
Actual (2020) Sh' Million
Projected (2021) Sh' Million
Sales
500
530
Costs (except Depreciation)
360
381.6
Depreciation
37.5
39.375
Total Operating Costs
397.5
420.975
Earnings Before interest and tax
102.5
109.025
Less interest
13.9
14.65
Earnings before tax
88.6
94.375
Taxes @30%
26.58
28.3125
Net Income before preferred dividends
62.02
66.0625
Preferred dividends
6
56.02
60.0625
Common dividends
40.8
29.7
Addition to retained Earnings
15.22
30.3625
Number of shares
10
Earnings per share
5.602
6.00625
Dividend per share
4.08
2.97
BALANCE SHEET
ASSETS
Cash
5.3
5.6
Marketable Securities
49.9
51.9
Accounts Receivable
53
56.2
Inventories
106
112.4
Total Current Assets
214.2
226.1
Net Plant and Equipment
375
393.75
Total Assets
589.2
619.85
LIABILITIES AND EQUITY
Accounts payable
9.6
11.2
Notes payable
69.9
74.1
Accruals
27.5
28.1
Total Current Liabilities
107
113.4
Long-Term bonds
140.8
146.55
Preferred Stock
35
Common stock
160
Retained Earnings
146.4
164.9
Common equity
306.4
324.9
Total Liabilities and Equity
Required -
(a) Estimate Free Cash Flow as at end of 2021?
(b) Estimate the value of Operations as at the end of year 2020?
(c) Estimate the value of the company and its price per share as at 31st December, 2020?
Financial Statement Analysis and Preparation
Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?
An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.
Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.
This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited
Prepare general journal entries for Goela Ltd
Prepare the journal entry to record the acquisition of the assets.
Prepare general journal entries to record the transactions, assuming use of the periodic inventory system
Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.
Explain the IASB Conceptual Framework's perspective of users and their decisions.
T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .
Computation of Free Cash Flow
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd