Question # 3-14 a , b & c FREE CASH FLOW Arlington Corporation\'s financial stat
ID: 1172769 • Letter: Q
Question
Question # 3-14 a , b & c FREE CASH FLOW Arlington Corporation's financial statements (dollars and shares are in millions) are provided here. Balance Sheets as of December 31 s 14000 Accounts receivable 83320 71000 Net plant and equipment Liabilibies and Equity 10,100 Accounts payable Notes paryable Long-term bonds $ 8000 5 25,100 20050 Total labiltes Common stock (4000 share) Retained eamings 40050 76950 Income Statement for Year Ending December 31, 2016 Operating costs excluding depreciation and amortization 50,000 44,000 38,650 14a What was net operating working capital for 2015 & 2016? 4b What was Arlington's 2016 free cash flow? 14c Construct Arlington's 2016 statement of Stockholders' equityExplanation / Answer
What was net operating working capital for 2015 and 2016? 2016 2015 NOWC = Total CA – (Current liabilities – Notes payable) Total current assets $83,320.00 $71,000.00 Less: Total current liabilities $25,100.00 $20,050.00 Less: Notes Payable $7,000.00 $5,050.00 Net operating working capital $65,220.00 $56,000.00 $ million What was Arlington's 2016 free cash flow? FCF2016 = [EBIT(1 – T) + Deprec.] – [Capital expenditures + DNOWC] FCF = [44000 x (1 - 40%) + 6000] - [(48000-46000) + ($65,220 - $56,000) $15,180.00 million Note: To arrive at capital expenditures you add depreciation to the change in net FA, Construct Arlington’s 2016 statement of stockholders’ equity Common Stock Retained Earnings Total Stockholders' Equity Shares Amount Balances, 12/31/15 4000 $40,000.00 $36,950.00 $76,950.00 2016 Net Income $23,190.00 Cash Dividends $13,920.00 Addition to retained earnings $9,270.00 Balances, 12/31/16 $86,220.00