Question 3:(15 marks)

Below are summary numbers for 2019 and 2020 for Super Mart Ltd. (in million dollars).

2019

2020

Operating assets

17,796

19,057

Operating liabilities

3,927

4,011

Financial assets

372

490

Financial liabilities

4,374

5,496

Operating income (after tax)

2,185

Net financial expense (after tax)

490

Required:

Calculate Super Mart's free cash flow in 2020 using both Method 1 and Method 2.

(Hint: Method 1 focuses on the source of free cash flow; Method 2 focuses on the disposition of free cash flow.)