1. Given the following data what is the free cash flow?
2. If you assume 6% growth for three years, 3% growth after that, and a required rate of return of 5% what's the NPV of the cash flow going forward?
3. And at what price would you feel it's a strong buy and what price would be a strong sell?
NDNU CORPORATION Common stock (1 million shares)
INCOME STATEMENTS FOR YEAR ENDING SEPTMEBER (THOUSANDS OF DOLLARS)
|
2013
|
2012
|
|
Sales
|
126,508
|
98,249
|
|
Operating costs excluding depreciation
|
47,846
|
34,431
|
|
Earnings before interest and taxes
|
78,662
|
63,818
|
|
Less interest
|
0
|
0
|
|
Earnings before taxes
|
78,662
|
63,818
|
|
Taxes (25%)
|
19,665
|
15,954
|
|
Net income available to common stockholders
|
58,996
|
47,863
|
|
Common dividends
|
0
|
0
|
BALANCE SHEETS FOR YEAR ENDING SEPTEMBER (THOUSANDS OF DOLLARS)
|
2013
|
2012
|
|
Assets
|
|
|
|
Cash and marketable securities
|
59,129
|
35,982
|
|
Accounts receivable
|
41,275
|
13,731
|
|
Inventories
|
7,249
|
5,305
|
|
Total current assets
|
107,673
|
55,018
|
|
Net plant and equipment
and other assets
|
98,621
|
84,782
|
|
Total assets
|
206,294
|
139,800
|
|
|
|
|
Liabilities and equity
|
|
|
|
Accounts payable
|
42,589
|
33,879
|
|
Notes payable
|
0
|
0
|
|
Accruals
|
0
|
0
|
|
Total current liabilities
|
42,589
|
33,879
|
|
Long-term bonds
|
0
|
0
|
|
Total debt
|
42,589
|
33,879
|
|
Retained earnings
|
137,474
|
82,477
|
|
Common stock
|
26,121
|
23,444
|
|
Common Equity
|
163,595
|
101,922
|
|
Total liabilities and equity
|
206,294
|
139,800
|