I need to know how to calculate the Free Cash Flow Equity of a company. I am sup
ID: 2760518 • Letter: I
Question
I need to know how to calculate the Free Cash Flow Equity of a company. I am suppposed to for this project that I have to do for a class, but the book doesn't give me a formula and there are so many formulas online. I am supposed to use the statements that I got from Mergent and those are pasted below. Could someone aid in explaining to me how to find the FCFE?
PepsiCo Inc (NYS: PEP) Exchange rate used is that of the Year End reported date Standardized Annual Balance Sheet Report Date 12/26/2015 12/27/2014 12/28/2013 Currency USD USD USD Audit Status Not Qualified Not Qualified Not Qualified Consolidated Yes Yes Yes Scale Thousands Thousands Thousands Cash & Equivalents 9096000 6134000 9375000 Short Term Investments 2913000 2592000 303000 Cash & Equivs & ST Investments 12009000 8726000 9678000 Receivables (ST) 6437000 6651000 6954000 Inventories 2720000 3143000 3409000 Other Current Assets 1865000 2143000 2162000 Total Current Assets 23031000 20663000 22203000 Gross Property Plant & Equip 35747000 36300000 36961000 Accumulated Depreciation 19430000 19056000 18386000 Net Property Plant & Equip 16317000 17244000 18575000 Receivables (LT) 140000 93000 105000 Long Term Investments 2311000 2689000 2623000 Intangible Assets 27258000 29053000 32652000 Deferred LT Assets 159000 179000 214000 Other Assets 451000 588000 1106000 Total Assets 69667000 70509000 77478000 Accounts Payable & Accrued Exps 10665000 10104000 9785000 Accounts Payable 5546000 5127000 4874000 Accrued Expenses 5119000 4977000 4911000 Current Debt 4071000 5076000 5306000 Other Current Liabilities 2842000 2912000 2748000 Total Current Liabilities 17578000 18092000 17839000 LT Debt & Leases 29213000 23821000 24333000 Deferred LT Liabilities 4959000 5304000 5986000 Other Liabilities 5994000 5854000 5041000 Total Liabilities 57744000 53071000 53199000 Common Share Capital 24000 25000 25000 Preferred Share Capital 41000 41000 41000 Additional Paid-In Capital 4076000 4115000 4095000 Retained Earnings 50472000 49092000 46420000 Accum Other Comprehensive Income -13319000 -10669000 -5127000 Treasury Stock 29371000 25166000 21175000 For Curr Trans (BS) -11080000 -8255000 -3247000 Other Equity 11080000 8255000 3247000 Total Equity 11923000 17438000 24279000 Total Liabilities & Equity 69667000 70509000 77478000 Standardized Annual Income Statement Report Date 12/26/2015 12/27/2014 12/28/2013 Currency USD USD USD Audit Status Not Qualified Not Qualified Not Qualified Consolidated Yes Yes Yes Scale Thousands Thousands Thousands Sales Revenue 63056000 66683000 66415000 Total Revenue 63056000 66683000 66415000 Direct Costs 28384000 30884000 31243000 Gross Profit 34672000 35799000 35172000 Selling General & Admin 24885000 26126000 25357000 Depreciation & Amortization 75000 92000 110000 Other Operating Expense 1359000 0 0 Total Indirect Operating Costs 26319000 26218000 25467000 Operating Income 8353000 9581000 9705000 Interest Income -911000 -824000 -814000 Other Non-Operating Income 0 0 0 Total Non-Operating Income -911000 -824000 -814000 Earnings Before Tax 7442000 8757000 8891000 Taxation 1941000 2199000 2104000 Minority Interests 49000 45000 47000 Extraordinary Items 0 0 0 Accounting Changes 0 0 0 Net Income 5452000 6513000 6740000 Preference Dividends & Similar -6000 -10000 -8000 Net Income to Common 5446000 6503000 6732000 Average Shares Basic 1469000 1509000 1541000 EPS Net Basic 3.71 4.31 4.37 EPS Continuing Basic 3.71 4.31 4.37 Average Shares Diluted 1485000 1527000 1560000 EPS Net Diluted 3.67 4.27 4.32 EPS Continuing Diluted 3.67 4.27 4.32 Shares Outstanding 1448000 1488000 1529000 Standardized Annual Retained Earnings Report Date 12/26/2015 12/27/2014 12/28/2013 Currency USD USD USD Audit Status Not Qualified Not Qualified Not Qualified Consolidated Yes Yes Yes Scale Thousands Thousands Thousands Retained Earnings at Start 49092000 46420000 43158000 Retained Earnings at End 50472000 49092000 46420000 Change in Retained Earnings 1380000 2672000 3262000 Standardized Annual Cash Flows Report Date 12/26/2015 12/27/2014 12/28/2013 Currency USD USD USD Audit Status Not Qualified Not Qualified Not Qualified Consolidated Yes Yes Yes Scale Thousands Thousands Thousands Net Income 5501000 6558000 6787000 Adjustments from Inc to Cash 4372000 3058000 2292000 Change in Working Capital 992000 1159000 958000 Other Operating Cash Flows -285000 -269000 -349000 Cash Flow from Operations 10580000 10506000 9688000 Purchase of Pty Plant & Equip -2758000 -2859000 -2795000 Purchase of Investments -4514000 -6393000 -109000 Proceeds from Pty Plant & Equip 86000 115000 109000 Disposal of Investments 4111000 3891000 - Change in Business Activities 76000 203000 133000 Other Investing Cash Flows -570000 106000 37000 Cash Flow from Investing -3569000 -4937000 -2625000 Change in ST Debt 25000 -1997000 1165000 Change in LT Debt 4607000 1666000 301000 Change in Equity -4368000 -4153000 -1768000 Payment of Dividends -4040000 -3730000 -3434000 Other Financing Cash Flows -52000 -50000 -53000 Cash Flow from Financing -3828000 -8264000 -3789000 Effect of Exchange Rate -221000 -546000 -196000 Change in Cash 2962000 -3241000 3078000 Opening Cash 6134000 9375000 6297000 Closing Cash 9096000 6134000 9375000 Depn & Amortn (CF) 2416000 2625000 2663000 Net Purch of Pty Plant & Equip -2672000 -2744000 -2686000Explanation / Answer
Computation of the free cash flow for equity.We have,
Particulars 12/26/2015 12/27/2014 12/28/2013 Net Income to Common equity 5,446,000 6,503,000 6,732,000 Add: Depreciation & Amortn. 2,416,000 2,625,000 2,663,000 Free Cash Flow for Equity $ 7,862,000 $ 9,128,000 $ 9,395,000