Exhibit below for Frits Seegers Inc. and measure the free cash flow for Seegers for Year 0 and six years

Exhibit below for Frits Seegers Inc. and measure the free cash flow for Seegers for Year 0 and six years

Question:

Exhibit below for Frits Seegers Inc. and measure the free cash flow for Seegers for Year 0 and six years of forecasts (Year +1 to Year +6) shown. The company does not hold any excess cash, so the change in the cash balance is equal to the change in required cash. The change in Retained Earnings in a year is equal to the company’s net income minus the dividends declared by the company in that year. Discuss the major factors that caused the free cash flows to change from year to year. 

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Income Statement Revenue Cost of goods sold.. Gross margin. Selling, general & administrative Operating income. Interest expense… Income before taxes.. Income tax expense. Net income… Balance Sheet Cash balance….. Accounts receivable.. Inventory… Total current assets. Land… Total assets.. Accounts payable… Other current operating liabilities… Total current liabilities.. Debt… Total liabilities.. Common stock. Retained earnings.. Total shareholders equity… Total liabilities and equities…. Exhibit may contain small rounding errors Year -1 $1,000.0 FRITS SEEGERS INC. Income Statement and Balance Sheet Forecasts (for the vears ended December 31) Actual -610.0 $ 390.0 -120.0 $ 270.0 -77.0 $ 193.0 -77.2 $115.8 $ 50.0 166.7 118.6 . $335.3 1,550.0 . $1.885.3 $50.8 35.0 $85.8 1,200.0 $1,285.8 $383.6 215.8 .$ 599.4 $1.885.3 Year 0 $1,100.0 $1,650.0 -671.0 -1,006.5 $ 429.0 -132.0 $ 297.0 -96.0 $201.0 -80.4 $ 120.6 $ 55.0 183.3 130.5 $55.9 38.5 $94.4 1,400.0 $1,494.4 $383.6 Year 1 315.7 $ 699.4 $2,193.8 $ 643.5 -198.0 $445.5 -112.0 $333.5 -133.4 $ 200.1 $82.5 275.0 195.7 $83.9 57.8 $368.8 $ 553.2 $774.5 1,825.0 2,155.0 $2.193.8 $2.708.2 2.501.5 $3.276.0 $ 141.6 1,600.0 $1,741.6 $450.7 Year 2 515.8 $2,310.0 -1.409.1 $ 900.9 -277.2 $ 623.7 -128.0 $495.7 -198.3 $ 297.4 $ 115.5 385.0 274.0 $117.4 80.9 $198.3 1,700.0 $1.898.3 $ 564.5 813.3 Forecast Year 3 $3,003.0 -1,831.8 $1,171.2 -360.4 $ 810.8 -136.0 $ 674.8 -269.9 $ 404.9 $ 150.2 500.5 _356.2 $ 152.7 105.1 Year 4 $257.8 1,800.0 $2,057.8 $ 564.5 $3,303.3 -2,015.0 $1,288.3 -396.4 $ 891.9 -144.0 $ 747.9 -299.2 $448.7 $ 165.2 550.6 391.8 $ 167.9 115.6 $ 283.5 Year 5 1,900.0 $2,183.5 $ 564.5 $3,402.4 -2,075.5 $1,006.8 $1,107.5 2,651.7 2,701.2 2,752.2 $3.658.5 $3.808.7 $3.893.0 1.060.7 $1,326.9 -408.3 $918.6 -152.0 $766.6 -306.7 $ 460.0 $ 170.1 567.1 403.6 $ 173.0 119.1 $ 292.0 2,000.0 $2,292.0 $564.5 Year 6 $1.140.7 $1,175.0 2,804.8 $3.979.8 1,036.5 $3,504.5 -2,137.7 1,036.3 $966.6 $1,377.7 $1,600.7 $2,708.2 $3,276.0 $3,658.5 $3,808.7 $3,893.0 $1,366.7 -420.5 $946.2 -160.0 $ 786.2 -314.5 $471.7 $ 300.8 2,100.0 $2,400.8 $ 564.5 1,014.5 $1,625.2 $1,600.9 $1,579.0 $3,979.8 $ 175.2 584.1 415.7 $ 178.1 122.7

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