Solved by verified expert :Critical Analysis
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compare and contrast the differing views an investor and management may have on
financial statements. How should investors and management view EVA and FCF?
Pick a publically traded company. Go to the company Web site. Try one that you
are familiar with—you shop at their store, eat at their restaurants, or wear
their clothes. On their Web site, try to find their annual financial report. If
you cannot find it on their site, do an Internet search. Sometimes these are
found under Investor Relations on a company’s site. Yahoo finance is also a
good source. If you still cannot find the annual report, try another search
until you find one (for example, search for “GAP Annual Report”). Search for
the economic profit, EVA, and free cash flow in the firm’s annual report, and
discuss your findings. Discuss the firm’s operations as indicated by their
annual report. You must submit your backup in Excel or other supporting
documentation showing how answers were reached.
EVA=EBIT (1-T)- (Total
investors capital x after-tax cost of capital)
Free Cash Flow = EBIT(1-T)
+ Depreciation – (Capital Expenditures+ Increase in Net Working Capital)
Clickherefor an example Excel spreadsheet.
Submit your assignment in theW1:
Assignment 3 Dropbox
Identify a
company Web site. MACY’S Annual
financial report
10
Analyzed the company’s annual report by calculating the EVA and
FCF.
30
.
