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