Social Insecurity economic Development Kenya
  • June 7, 2018
  • David Marks
  • 0

KIMBERLY-CLARK CORPORATION

 comprehensive incomePV of Cv are to be calculated by the formula of FCTT +1 / ( R-g)  where free cash flow for the last year is taken and r is the discount rate and the expected growth rate is also taken for doing the calculation. In this case, also enterprise value at $ 18189 is calculated after adjusting the growth rate and discount rate

Question 2: Free cash flow in Kimberly- Clark Corporation

Reformulation of balance sheet

 

Particulars  2007 2006
Operating assets$ 18057.0$ 16796.2
Operating liabilities6011.805927.20
Financial assets( operating assets – operating liabilities )$ 18057.0 -$ 6011.80= $ 12045.20( $ 16796.2-5927.20) $ 10869
Financial obligations6496.40$ 4395.40
Financial assetsLess: 382.706113.70270.804395.40
Common equity ( CSE) ( net operating assets – financial assets) –( 12045.20- 6113.70)= $ 5931.50($ 10869-4124.60= $ 6744.40.

 Table 2: Free cash flow

(Source: created by author)

By the method type 1:

Free cash flow = $ operating income – change in the net operating assets

= $ 2740.1 – (12045.20-10869.0) $ 1563.90

By the method type 2,

Free cash flow = $ operating income – change in the net operating assets

= 147.1 – (6113.70 – 4124.60) + 3405.90

= $ 1563.90

Net payout to the shareholders (D) = comprehensive income – NFO + d

= (2740.1 -147.1) – (- 812.90)

= $ 3405.90

KIMBERLY-CLARK CORPORATION

Table 1: Free cash flow

(Source: created by author)

Calculation of continuing value (No growth)

Value per share on 369 million shares = $ 32.82 (12112/369) = $ 32.8238

1637 /0.09 = $ 18189

PV of CV = 18189/1.4116= 12885

PV of Cv are to be calculated by the formula of FCTT +1 / ( R-g)  where free cash flow for the last year is taken and r is the discount rate and the expected growth rate is also taken for doing the calculation. In this case, also enterprise value at $ 18189 is calculated after adjusting the growth rate and discount rate

Question 2: Free cash flow in Kimberly- Clark Corporation

Reformulation of balance sheet

 

Particulars  2007 2006
Operating assets$ 18057.0$ 16796.2
Operating liabilities6011.805927.20
Financial assets( operating assets – operating liabilities )$ 18057.0 -$ 6011.80= $ 12045.20( $ 16796.2-5927.20) $ 10869
Financial obligations6496.40$ 4395.40
Financial assetsLess: 382.706113.70270.804395.40
Common equity ( CSE) ( net operating assets – financial assets) –( 12045.20- 6113.70)= $ 5931.50($ 10869-4124.60= $ 6744.40.

 Table 2: Free cash flow

(Source: created by author)

By the method type 1:

Free cash flow = $ operating income – change in the net operating assets

= $ 2740.1 – (12045.20-10869.0) $ 1563.90

By the method type 2,

Free cash flow = $ operating income – change in the net operating assets

= 147.1 – (6113.70 – 4124.60) + 3405.90

= $ 1563.90

Net payout to the shareholders (D) = comprehensive income – NFO + d

= (2740.1 -147.1) – (- 812.90)

= $ 3405.90

KIMBERLY-CLARK CORPORATION

Table 1: Free cash flow

(Source: created by author)

Calculation of continuing value (No growth)

Value per share on 369 million shares = $ 32.82 (12112/369) = $ 32.8238

1637 /0.09 = $ 18189

PV of CV = 18189/1.4116= 12885

PV of Cv are to be calculated by the formula of FCTT +1 / ( R-g)  where free cash flow for the last year is taken and r is the discount rate and the expected growth rate is also taken for doing the calculation. In this case, also enterprise value at $ 18189 is calculated after adjusting the growth rate and discount rate

Question 2: Free cash flow in Kimberly- Clark Corporation

Reformulation of balance sheet

 

Particulars  2007 2006
Operating assets$ 18057.0$ 16796.2
Operating liabilities6011.805927.20
Financial assets( operating assets – operating liabilities )$ 18057.0 -$ 6011.80= $ 12045.20( $ 16796.2-5927.20) $ 10869
Financial obligations6496.40$ 4395.40
Financial assetsLess: 382.706113.70270.804395.40
Common equity ( CSE) ( net operating assets – financial assets) –( 12045.20- 6113.70)= $ 5931.50($ 10869-4124.60= $ 6744.40.

 Table 2: Free cash flow

(Source: created by author)

By the method type 1:

Free cash flow = $ operating income – change in the net operating assets

= $ 2740.1 – (12045.20-10869.0) $ 1563.90

By the method type 2,

Free cash flow = $ operating income – change in the net operating assets

= 147.1 – (6113.70 – 4124.60) + 3405.90

= $ 1563.90

Net payout to the shareholders (D) = comprehensive income – NFO + d

= (2740.1 -147.1) – (- 812.90)

= $ 3405.90

KIMBERLY-CLARK CORPORATION

Table 1: Free cash flow

(Source: created by author)

Calculation of continuing value (No growth)

Value per share on 369 million shares = $ 32.82 (12112/369) = $ 32.8238

1637 /0.09 = $ 18189

PV of CV = 18189/1.4116= 12885

PV of Cv are to be calculated by the formula of FCTT +1 / ( R-g)  where free cash flow for the last year is taken and r is the discount rate and the expected growth rate is also taken for doing the calculation. In this case, also enterprise value at $ 18189 is calculated after adjusting the growth rate and discount rate

Question 2: Free cash flow in Kimberly- Clark Corporation

Reformulation of balance sheet

 

Particulars  2007 2006
Operating assets$ 18057.0$ 16796.2
Operating liabilities6011.805927.20
Financial assets( operating assets – operating liabilities )$ 18057.0 -$ 6011.80= $ 12045.20( $ 16796.2-5927.20) $ 10869
Financial obligations6496.40$ 4395.40
Financial assetsLess: 382.706113.70270.804395.40
Common equity ( CSE) ( net operating assets – financial assets) –( 12045.20- 6113.70)= $ 5931.50($ 10869-4124.60= $ 6744.40.

 Table 2: Free cash flow

(Source: created by author)

By the method type 1:

Free cash flow = $ operating income – change in the net operating assets

= $ 2740.1 – (12045.20-10869.0) $ 1563.90

By the method type 2,

Free cash flow = $ operating income – change in the net operating assets

= 147.1 – (6113.70 – 4124.60) + 3405.90

= $ 1563.90

Net payout to the shareholders (D) = comprehensive income – NFO + d

= (2740.1 -147.1) – (- 812.90)

= $ 3405.90

David Marks

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