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Camel Corporation: free cash flow, DuPont, EPS, inventory

Camel Corporation's financial Statements

Balance Sheet
2008 2009
assets 7,282 57,600
cash 632,160 351,200
account receivable 1,287,360 715,200
inventories 1,926,802 1,124,000
total current assets 1,202,950 491,000
gross fixed assets 263,160 146,200
less accumulated depreciation 939,790 344,800
net fixed assets 2,866,592 1,468,800

Liability and equity

account payable 524,160 145,600
accrualas 636,808 200,000
total current liabilities 489,600 136,000
long term debt 1,650,568 481,600
common stock (100,000 shares) 723,432 321,432
retained earnings 460,000 460,000
total equity 32,592 203,768
total liabilities and equity 492,592 663,768
2,866,592 1,468,800
Income Statement
2008 2009
sales 6,034,000 3,432,000
cost of goods sold 5,528,000 2,864,000
other expenses 519,988 356,672
total operating cost excluding
depreciation and amortization 6,047,988 3,222,672
depreciation and amortization 116,960 18,900
EBIT ($130,984) 190,428
interest expense 136,012 43,828
EBT ($266,960) 146,600
Taxes (40%) ($106,784) 58,640
Net income ($160,176) 87,960

shares outstanding 100,000 shares

a) Determine the free cash flow for Camel for 2008
b) Construct the DuPont Identity for Camel for 2008
c) Determine the EPS for Camel 2008
d) Determine the inventory period for Camel 2008 and explain what it means.

Solution Preview

a) Determine the free cash flow for Camel for 2008

FCF = [EBIT (1 - T) + Depreciation and amortization] - [capital expenditures + change in net operating working capital]

capital expenditures = amount the fixed assets increased by from previous year + depreciation.
= 2,866,592 + 116,960 = $2,983,552.

change in net operating working capital = (cash and cash ...

Solution Summary

This solution is comprised of detailed explanation and step-by-step calculation to financial analysis of Camel Corporation.

$2.19