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P4–6
Finding operating and free cash flows Consider the following
balance sheets and selected data from the income statement of Keith
Corporation.
Keith Corporation Balance Sheets
December 31 Assets 2015 2014 Cash $ 1,500 $ 1,000 Marketable
securities 1,800 1,200 Accounts receivable 2,000 1,800 Inventories
2,900 2,800 $ 8,200 $ 6,800 Gross fixed assets $29,500 $28,100 Less:
Accumulated depreciation 14,700 13,100 Net fixed assets $14,800
$15,000 Total assets $23,000 $21,800 Total current assets Liabilities
and stockholders’ equity Keith Corporation Balance Sheets
December 31 Assets 2015 2014 Cash $ 1,500 $ 1,000 Accounts
payable $ 1,600 $ 1,500 Notes payable 2,800 2,200 200 300 $ 4,600 $
4,000 5,000 5,000 $ 9,600 $ 9,000 $10,000 $10,000 3,400 2,800 Total
stockholders’ equity $13,400 $12,800 Total liabilities and
stockholders’ equity $23,000 $21,800 Accruals
Total current liabilities
Long-term debt
Total liabilities
Common stock
Retained earnings Keith Corporation Income Statement Data (2015)
Keith Corporation Balance Sheets
December 31 Assets
Cash 2015 2014 $ 1,500 $ 1,000 Depreciation expense $1,600
Earnings before interest and taxes (EBIT) 2,700 Interest expense 367
Net profits after taxes 1,400 Tax rate 40% a. Calculate the firm’s net
operating profit after taxes (NOPAT) for the year