FINANCIAL ACCOUNTING ANALYSIS ASSIGNMENT
Question 1: Use the data set of P4-46
a. Prepare CFS using the DIRECT method
b. Prepare FCF statement.
c. Compute FCF using the adjustment method: FCF = CFO* - CFI*
d. Compute FCF = NOPAT - ΔNOA with (i) Cash excluded and (ii) Cash included. What is the difference between the two FCFs?
Question 2:
Balance Sheet as of December 31 2014 2015
Assets
Cash $ 1,000 $ 1,100
A/R 1,500 1,650
Inv 2,000 2,200
Total CA $4,500 $4,950
PPE (at cost) 11,000 12,150
Acc. Depreciation (4,500) (5,100)
Net PPE 6,500 7,050
Total assets $11,000 $12,000
Liabilities and Equity
Accrued liabilities $800 $880
A/P 1,200 1,320
Notes/Payable 5,500 6,050
Total CL $7,500 $8,250
Long-term debt 2,000 1,602
Common stock 1,000 1,000
R/E 500 1,148
Total liabilities and equity $11,000 $12,000
Income Statement for the year Ending December 31, 2015 -
Sales $10,000
CGS 6,000
Depreciation 600
SG&A 1,000
Interest expense 600
Taxable Income $ 1,800
Taxes 720
Net Income $ 1,080
Required:
a. Prepare FCF statement.
b. Compute FCF using the adjustment method: FCF = CFO* - CFI*
c. Compute FCF = NOPAT - ΔNOA with (i) Cash excluded and (ii) Cash included. What is the difference between the two FCFs?
Question 3: The income statement, comparative balance sheet, and additional information for LACONIC Corporation for 2015 appear below:
Income Statement:
Revenues:
Sales $1,400
Gain on sale of equipment 30 $1430
Expenses:
CGS 800
Advertising expense 50
Depreciation 70
Rent 40
Wages 110
Interest expense on bonds 14
Income tax 72 1,156
$ 274
Comparative Balance Sheet
2014 2015
Cash $ 75 $282
A/R 32 67
Inv 62 187
Prepaid rent 6 16
Equipment 181 201
Accumulated depreciation (16) (51)
Totals $340 $702
A/P $ 15 $105
Wages payable 20 30
Income tax payable 60 68
Bonds payable 125 125
Common stock 100 100
R/E 20 274
Totals $340 $702
Other data:
a. Equipment with an original cost of $70 and accumulated depreciation of $35 was sold for $65.
b. Additional equipment was purchased for cash.
c. No additional bonds were issued or retired during the year.
d. Cash dividends were declared and paid during the year.
Required:
a. Prepare FCF statement.
b. Compute FCF using the adjustment method: FCF = CFO* - CFI*
c. Compute FCF = NOPAT - ΔNOA with (i) Cash excluded and (ii) Cash included. What is the difference between the two ΔNOAs.
Attachment:- Assignment File.rar