Maurice Tutor
$15/per page/Negotiable
FREE CASH FLOW Bailey Corporation’s financial statements (dollars and shares are in millions) are provided here.
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Balance Sheets as of December 31 |
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 |
2008 |
2007 |
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Assets |
 |
 |
|
Cash and equivalents |
$ 14,000 |
$ 13,000 |
|
Accounts receivable |
30,000 |
25,000 |
|
Inventories |
28,125 |
21,000 |
|
Total current assets |
$ 72,125 |
$ 59,000 |
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Net plant and equipment |
50,000 |
47,000 |
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Total assets |
$122,125 |
$106,000 |
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Liabilities and Equity |
 |
 |
|
Accounts payable |
$ 10,800 |
$ 9,000 |
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Notes payable |
6,700 |
5,150 |
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Accruals |
7,600 |
6,000 |
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Total current liabilities |
$ 25,100 |
$ 20,150 |
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Long-term bonds |
15,000 |
15,000 |
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Total debt |
$ 40,100 |
$ 35,150 |
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Common stock (5,000 shares) |
50,000 |
50,000 |
|
Retained earnings |
32,025 |
20,850 |
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Common equity |
$ 82,025 |
$ 70,850 |
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Total liabilities and equity |
$122,125 |
$106,000 |
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Income Statement for Year Ending December 31, 2008 |
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|
Sales |
$214,000 |
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Operating costs excluding depreciation and amortization |
170,000 |
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EBITDA |
$44,000 |
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Depreciation & amortization |
5,000 |
|
EBIT |
$39,000 |
|
Interest |
1,750 |
|
EBT |
$37,250 |
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Taxes (40%) |
14,900 |
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Net income |
$22,350 |
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Dividends paid |
$11,175 |
a. What was net working capital for 2007 and 2008?
b. What was Bailey’s 2008 free cash flow?
c. Construct Bailey’s 2008 statement of stockholders’ equity.