70.2K
Verified Solution
Link Copied!
| Cumberland Industries: Income Statement (Thousands of dollars) | 2019 |
| Sales | | | | $750,000 |
| Operating costs excluding depreciation | | $600,000 |
| EBITDA | | | | $150,000 |
| Depreciation (Cumberland has no amortization charges) | $7,000 |
| EBIT | | | | $143,000 |
| Interest expense | | | $8,000 |
| EBT | | | | $135,000 |
| Taxes (40%) | | | | $54,000 |
| Net income | | | | $81,000 |
| Cumberland Industries December 31 Balance Sheets | | |
| (in thousands of dollars) | | | | |
| | | | | 2019 | 2018 |
| Assets | | | | | |
| Cash and cash equivalents | | | $91,450 | $74,625 |
| Short-term investments | | | 27,300 | 15,100 |
| Accounts Receivable | | | 108,470 | 85,527 |
| Inventories | | | | 38,450 | 34,982 |
| Total current assets | | | $265,670 | $210,234 |
| Net fixed assets | | | 70,000 | 42,436 |
| Total assets | | | | $335,670 | $252,670 |
| | | | | | |
| Liabilities and equity | | | | |
| Accounts payable | | | $30,761 | $23,109 |
| Accruals | | | | 30,405 | 22,656 |
| Notes payable | | | | 12,717 | 14,217 |
| Total current liabilities | | | $73,883 | $59,982 |
| Long-term debt | | | | 80,263 | 63,914 |
| Total liabilities | | | $154,146 | $123,896 |
| Common stock | | | | $100,000 | $90,000 |
| Retained earnings | | | 99,524 | 38,774 |
| Total common equity | | | $199,524 | $128,774 |
| Total liabilities and equity | | | $353,670 | $252,670 |
Using the given information
a) Calculate the firm's free cash flow (FCF) in 2019.
b) Did growth add value?
c) (Bonus; not required) What is the amount of dividend paid by the firm in 2019?
Answer & Explanation
Solved by verified expert
