Please describe how you arrived at the correct answer including the work written
ID: 427219 • Letter: P
Question
Please describe how you arrived at the correct answer including the work written out. Thank you.
2. Given the following Year 12 Financial Statement data for a footwear company Year 12 (in 000s) Income Statement Data Net Revenues from Footwear Sales Operating Profit (Loss) Net Profit (Loss) Balance Sheet Data Cash on Hand Total Current Assets $ 350,000 100,000 63,000 Total Assets Overdraft Loan Payable 1-Year Bank Loan Payable Current Portion of Long-term Loans Total Current Liabilities L-T Bank Loans Outstanding 10,000 70,000 313,000 5,000 10,000 17,000 48,000 90,000 Year 11 Year 12 Year 12 Shareholder Equity alance Change Balance 0 10,000 Common Stock 10,000 123,000 Additional Capital 0 123,000 29,000 13,000 42,000 175,000 Retained Earnings Total Shareholder Equity 162,000 +13,000 Other Financial Data Depreciation 11,650 15,000 Dividend Payments Based on the above figures, the company's "free cash flow" in Year 12 was A. $63,000 B. ($3,350) C. $59,650 D. $38,500 E. None of theseExplanation / Answer
Free cash flow = Net profit + Depreciation - Dividend payments
= 63,000 + 11,650 -15,000
= 59,650