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