Essay About Net Income412376Dividends10367Balance Sheet And Income Statement

Financial Statements and Cash Flow
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Income Statement ($ millions)20182019Sales1,5091,250COGS750550Depreciation6550Non-Operating Expense3040EBIT664610Interest Expense4040EBT624570Tax212194Net Income412376Dividends10367Balance Sheet ($ millions)20182019Cash104160A/R455688Inventory553555    Current Assets1,1121,403Fixed Assets (net of depreciation)1,6441,709        Total Assets2,7563,112A/P400300Accuruals2889Notes Payable5042    Total Current Liabilities478431Long-Term Debt358412Total Liabilities836843Equity600640Retained Earnings1,3201,629         Total Liabilities and Equity2,7563,112Change in Net Fixed Assets = 1,709 – 1,644 = 65Change in Gross Fixed Assets (Capital Expenditures) = 1,709 – 1,644 + 50 = 115**To get the change in gross fixed assets, we must add back depreciation to the change in net fixed assets since the annual depreciation was deducted to get to net fixed assets.Change in NOWC = (688 + 555 – 300 – 89) – (455 + 553 – 400 – 28) = 274**I have left out cash as a current asset since we will be adding the cash to the present value of the operating assets when using the free cash flow approach.  I have also left out notes payable, a current liability, since we will be subtracting the debt from the value of the firm when using the free cash flow approach.