Development of Free Cash Flow for a business

  1. Compute the firm’s Net Working Capital for both fiscal years. (2 points)
  2. Compute the firm’s Free Cash Flow for the most recent fiscal year. (4 points)

3a. Compute the firm’sTotalAsset Turnoverfor the most recentfiscal year.(2 points)3b. Interpret the Total Asset Turnoveryou just calculated. What does this number mean? (2 points)

4a. Compute the firm’s Profit Marginfor the most recent fiscal year.(2 points)4b. Interpret the Profit Margin you just calculated. What does this number mean? (2 points)

  1. Compute the firm’s Return on Assets (ROA)for the most recent fiscal year.(2 points)
  2. Compute the firm’s Return on Equity (ROE)for the most recent fiscal year.(2 points)
  3. Compare the profitability ratios you computed in questions 4-6 above to the peer group averages. How would you describe the firm’s profitability relative to its peer group? (2 points)

Sample Solution

ACED ESSAYS