To calculate the Free Cash Flow (FCF) for 2012, we need to use the formula:

$\text{FCF} = \text{EBIT} \times (1 - \text{Tax rate}) + \text{Depreciation} - \text{Change in Net Working Capital} - \text{Capital Expenditure}$

From the provided image, let's extract the necessary details:

• EBIT (Earnings Before Interest and Taxes): $11,540$
• Tax Rate: $36.5\%$
• Depreciation: Not directly given, but it can be inferred from the difference in Accumulated Depreciation.
• Net Working Capital (NWC): $\text{NWC} = \text{Current Assets} - \text{Current Liabilities}$
• Capital Expenditure (CapEx): Can be inferred from the change in Net Fixed Assets.

Step 1: Calculate NWC for 2011 and 2012

• Current Assets 2012: $19,599$ (sum of Cash, Receivables, Inventory)

• Current Liabilities 2012: $3,726$ (sum of Commercial paper, Payables, Other short-term debt)

• NWC 2012: $19,599 - 3,726 = 15,873$

• Current Assets 2011: $21,514$ (sum of Cash, Receivables, Inventory)

• Current Liabilities 2011: $4,075$ (sum of Commercial paper, Payables, Other short-term debt)

• NWC 2011: $21,514 - 4,075 = 17,439$

• Change in NWC: $15,873 - 17,439 = -1,566$

Step 2: Estimate Depreciation

Depreciation can be found by the difference in Accumulated Depreciation:

• Accumulated Depreciation 2012: $30,371$
• Accumulated Depreciation 2011: $27,070$
• Depreciation Expense: $30,371 - 27,070 = 3,301$

Step 3: Estimate Capital Expenditure (CapEx)

CapEx can be inferred from the change in Net Fixed Assets:

• Net Fixed Assets 2012: $27,367$
• Net Fixed Assets 2011: $25,429$
• CapEx: $27,367 - 25,429 + 3,301 = 5,239$

Step 4: Calculate FCF

Now we have all the needed values:

$\text{FCF} = 11,540 \times (1 - 0.365) + 3,301 - (-1,566) - 5,239$

$\text{FCF} = 11,540 \times 0.635 + 3,301 + 1,566 - 5,239$

$\text{FCF} = 7,326.9 + 3,301 + 1,566 - 5,239 = 6,954.9 \approx 6,955$

So, the Free Cash Flow (FCF) for 2012 is approximately $6,955.

Would you like to go into further details or have any other questions?

Related Questions:

1. How would changes in the tax rate affect the Free Cash Flow calculation?
2. What impact does an increase in working capital have on Free Cash Flow?
3. How do we interpret negative Free Cash Flow in a business?
4. What could cause large changes in Net Fixed Assets between two years?
5. How does EBIT relate to overall profitability and Free Cash Flow?

Tip: Always double-check the components of Free Cash Flow, especially working capital and capital expenditures, as they can significantly impact the final number.