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Basic Question 2 of 7
Connie's Sporting Goods (CSG) has net income of $805 million for 2011. Using information from the CSG's financial statements below, use the CFO approach to find what FCFF and FCFE should be for CSG. Assume the income tax rate is 30%.
User Contributed Comments 6
| User | Comment |
|---|---|
| StanleyMo | Analyst notes dun repeat questions! |
| aparish | No, it's not a repeat. The first question asks us to calculate FCFF and FCFE from NI. This question asks us to calculate them from CFO. |
| Allen88 | I guess CFO= NI + NCC - WCInv |
| rocyang | agreed, it's the process that counts! |
| Paulvw | Analystnotes is giving us sufficient data for both CFO and NI approaches to make us think about *both*. In the exam we will have sufficient info for one approach, and enough on the other to confuse us if we are unfamiliar. Good question. |
| davcer | Net income approach NI+NCC+int(1-tx)-WCinv-FCinv CFO approach CFO+int(1-tx)-FCinv |
I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach
Learning Outcome Statements
describe approaches for forecasting FCFF and FCFE;
CFA® 2025 Level II Curriculum, Volume 4, Module 22.