Use the following income statements and balance sheets to calculate Garnet Inc."s free cash flow for 2003.
Garnet Inc.
|
INCOME STATEMENT
|
2003
|
2002
|
|
Net sales
|
$530.0
|
$500.0
|
|
Costs (except depreciation)
|
400.0
|
380.0
|
|
Depreciation
|
30.0
|
25.0
|
|
Total operating costs
|
$430.0
|
$405.0
|
|
Earnings before interest and taxes (EBIT)
|
100.0
|
95.0
|
|
Less interest
|
23.0
|
21.0
|
|
Earnings before taxes
|
77.0
|
74.0
|
|
Taxes (40%)
|
30.8
|
29.6
|
|
Net income
|
$ 46.2
|
$ 44.4
|
|
BALANCE SHEET
|
2003
|
2002
|
|
Assets
|
|
|
|
Cash
|
$ 28.0
|
$ 27.0
|
|
Marketable securities
|
69.0
|
66.0
|
|
Accounts receivable
|
84.0
|
80.0
|
|
Inventories
|
112.0
|
106.0
|
|
Total current assets
|
$293.0
|
$279.0
|
|
Net plant and equipment
|
281.0
|
265.0
|
|
Total assets
|
$574.0
|
$544.0
|
Liabilities and Equity
|
Accounts payable
|
$ 56.0
|
$ 52.0
|
|
Notes payable
|
138.0
|
130.0
|
|
Accruals
|
28.0
|
28.0
|
|
Total current liabilities
|
$222.0
|
$210.0
|
|
Long-term bonds
|
$173.0
|
$164.0
|
|
Common stock
|
100.0
|
100.0
|
|
Retained earnings
|
79.0
|
70.0
|
|
Common equity
|
$179.0
|
$170.0
|
|
Total liabilities and equity
|
$574.0
|
$544.0
|