How do you forecast the working capital for years 1965 - 1960 in order to calculate the free cash flows equation?

How do you forecast the working capital for years 1961 - 1967 in order to calculate the free cash flows equation?

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Exhibit 3 Five-Year Summary of Financial Data on American Rayon, Inc. (dollar figures in millions except per share data) 1956 1957 1958 1959 1960 Results of Operations Net sales $59.3 $58.1 $47.9 $62.1 $54.5 Earnings before taxes 9.4 (2.3) (6.2) 1.7 4.8 Pre-tax profit margin 15.9% 2.7% 8.8% Net earnings $4.5 $(1.2) $(3.2) $.8 $2.5 Depreciation and amortization 3.9 4.0 4.1 4.3 3.3 Cash funds from operations 8.4 2.8 .9 5.1 5.8 Return on total capital 5.3% 1.0% 3.4% Return on common equity (%) 5.9% 1.1% 3.6% Common Stock Net earnings per share $2.45 $(.63) $(1.69) $.44 $1.34 Common dividend per share 3.00 1.75 Book value per share 39.68 39.05 37.37 37.79 36.42 Market price range (high-low) 48-37 24-11 14-6 13-8 19-9 Average price-earnings ratio 17 23.9 10.4 Financial Position Working capital $39.1 $38.8 $36.6 $37.9 $41.2 Net property, plant, and equipment 36.6 34.1 34.2 33.8 23.9 Long-term debt 0 0 0 0 0 Common shareholders' equity 75.4 74.2 71.0 71.8 65.2 a. Based on 1,851,255 common shares outstanding. Exhibit 4 Balance Sheet of American Rayon, Inc., as of December 31, 1960 (in thousands of dollars) Assets Cash $2,564 U.S. government securities" Accounts receivable, net Inventories Finished goods In process 20,024 11,863 4,376 2,161 Raw materials and supplies 3,919 Total $10,456 Prepaid expenses 283 Total current assets $45,190 Property, plant, and equipment, net 23,912 Other 125 Total assets $69,227 Retained earnings Liabilities and Shareholders' Equity Accounts payable Accrued items Total current liabilities Common stock Total shareholders' equity $2,863 1,145 $ 4,008 26,959 38,260 $65,219 Total liabilities and shareholders' equity $69.227 a. Carried at cost plus accrued interest, which approximates market. Exhibit 3 Five-Year Summary of Financial Data on American Rayon, Inc. (dollar figures in millions except per share data) 1956 1957 1958 1959 1960 Results of Operations Net sales $59.3 $58.1 $47.9 $62.1 $54.5 Earnings before taxes 9.4 (2.3) (6.2) 1.7 4.8 Pre-tax profit margin 15.9% 2.7% 8.8% Net earnings $4.5 $(1.2) $(3.2) $.8 $2.5 Depreciation and amortization 3.9 4.0 4.1 4.3 3.3 Cash funds from operations 8.4 2.8 .9 5.1 5.8 Return on total capital 5.3% 1.0% 3.4% Return on common equity (%) 5.9% 1.1% 3.6% Common Stock Net earnings per share $2.45 $(.63) $(1.69) $.44 $1.34 Common dividend per share 3.00 1.75 Book value per share 39.68 39.05 37.37 37.79 36.42 Market price range (high-low) 48-37 24-11 14-6 13-8 19-9 Average price-earnings ratio 17 23.9 10.4 Financial Position Working capital $39.1 $38.8 $36.6 $37.9 $41.2 Net property, plant, and equipment 36.6 34.1 34.2 33.8 23.9 Long-term debt 0 0 0 0 0 Common shareholders' equity 75.4 74.2 71.0 71.8 65.2 a. Based on 1,851,255 common shares outstanding. Exhibit 4 Balance Sheet of American Rayon, Inc., as of December 31, 1960 (in thousands of dollars) Assets Cash $2,564 U.S. government securities" Accounts receivable, net Inventories Finished goods In process 20,024 11,863 4,376 2,161 Raw materials and supplies 3,919 Total $10,456 Prepaid expenses 283 Total current assets $45,190 Property, plant, and equipment, net 23,912 Other 125 Total assets $69,227 Retained earnings Liabilities and Shareholders' Equity Accounts payable Accrued items Total current liabilities Common stock Total shareholders' equity $2,863 1,145 $ 4,008 26,959 38,260 $65,219 Total liabilities and shareholders' equity $69.227 a. Carried at cost plus accrued interest, which approximates market.

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To forecast working capital for 19611967 we can make the following assumptions 1 Current assets apar... View the full answer