Using your pro forma financial statements from
The income statement expenses are a constant percentage of revenues except for interest, which remains equal in dollar amount to the 2015 level, and taxes, which equal 40% of earnings before taxes.
The cash and marketable securities balance remains equal to $ 500, and the remaining current asset accounts increase in proportion to revenues for 2015.
Net property, plant, and equipment increase in proportion to the increase in revenues and depreciation expenses for 2016 is $ 2,000.
Accounts payable increases in proportion to firm revenues.
Owners’ equity increases by the amount of firm net income for 2011 (no cash dividends are paid).
Long-term debt remains unchanged, and short-term debt changes in an amount that balances the balance sheet.
Estimate the firm’s FCF for 2016.