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Balance Sheets as of December 31 2015 2014 Assets Cash and equivalents $ 14,000 $ 13,000 Accounts receivable 30,000 25,000 Inventories 28,125 21,000 $ 72,125 50,000 $122,125 Total current assets $ 59,000 Net plant and equipment 47,000 Total assets $106,000 Liabilities and Equity Accounts payable $ 10,800 $ 9,000 Accruals 7,600 6,000 Notes payable 6,700 5,150 Total current liabilities $ 25,100 $ 20,150 Long-term bonds 15,000 15,000 Total liabilities $ 40,100 $ 35,150 Common stock (5,000 shares) 50,000 50,000 Retained earmings 32,025 20,850 $ 82,025 $122,125 Common equity $ 70,850 Total liabilities and equity $106,000 Income Statement for Year Ending December 31, 2015 Sales $214,000 Operating costs excluding depreciation and amortization 170,000 EBITDA $ 44,000 Depreciation & amortization 5,000 EBIT $ 39,000 Interest 1,750 EBT $ 37,250 Taxes (40%) 14,900 Net income $ 22,350 Dividends paid $ 11,175

Balance Sheets as of December 31 2015 2014 Assets Cash and equivalents $ 14,000 $ 13,000 Accounts receivable 30,000 25,000 Inventories 28,125 21,000 $ 72,125 50,000 $122,125 Total current assets $ 59,000 Net plant and equipment 47,000 Total assets $106,000 Liabilities and Equity Accounts payable $ 10,800 $ 9,000 Accruals 7,600 6,000 Notes payable 6,700 5,150 Total current liabilities $ 25,100 $ 20,150 Long-term bonds 15,000 15,000 Total liabilities $ 40,100 $ 35,150 Common stock (5,000 shares) 50,000 50,000 Retained earmings 32,025 20,850 $ 82,025 $122,125 Common equity $ 70,850 Total liabilities and equity $106,000 Income Statement for Year Ending December 31, 2015 Sales $214,000 Operating costs excluding depreciation and amortization 170,000 EBITDA $ 44,000 Depreciation & amortization 5,000 EBIT $ 39,000 Interest 1,750 EBT $ 37,250 Taxes (40%) 14,900 Net income $ 22,350 Dividends paid $ 11,175

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question

Bailey Corporation’s financial statements (dollars and shares are in
‘millions) are provided here.

a.What was net operating working capital for 2014 and 20152
b.What was Bailey’s 2015 free cash flow?
c.Construct Bailey’s 2015 statement of stockholders” equity.
d.What was Bailey’s 2015 EVA? Assume that its after-tax cost of capital is 10%.
e.What was Bailey’s MVA at year-end 20152 Assume that its stock price at December 31, 2015 was $20. LY

 

Balance Sheets as of December 31 2015 2014 Assets Cash and equivalents $ 14,000 $ 13,000 Accounts receivable 30,000 25,000 Inventories 28,125 21,000 $ 72,125 50,000 $122,125 Total current assets $ 59,000 Net plant and equipment 47,000 Total assets $106,000 Liabilities and Equity Accounts payable $ 10,800 $ 9,000 Accruals 7,600 6,000 Notes payable 6,700 5,150 Total current liabilities $ 25,100 $ 20,150 Long-term bonds 15,000 15,000 Total liabilities $ 40,100 $ 35,150 Common stock (5,000 shares) 50,000 50,000 Retained earmings 32,025 20,850 $ 82,025 $122,125 Common equity $ 70,850 Total liabilities and equity $106,000 Income Statement for Year Ending December 31, 2015 Sales $214,000 Operating costs excluding depreciation and amortization 170,000 EBITDA $ 44,000 Depreciation & amortization 5,000 EBIT $ 39,000 Interest 1,750 EBT $ 37,250 Taxes (40%) 14,900 Net income $ 22,350 Dividends paid $ 11,175
Transcribed Image Text:Balance Sheets as of December 31 2015 2014 Assets Cash and equivalents $ 14,000 $ 13,000 Accounts receivable 30,000 25,000 Inventories 28,125 21,000 $ 72,125 50,000 $122,125 Total current assets $ 59,000 Net plant and equipment 47,000 Total assets $106,000 Liabilities and Equity Accounts payable $ 10,800 $ 9,000 Accruals 7,600 6,000 Notes payable 6,700 5,150 Total current liabilities $ 25,100 $ 20,150 Long-term bonds 15,000 15,000 Total liabilities $ 40,100 $ 35,150 Common stock (5,000 shares) 50,000 50,000 Retained earmings 32,025 20,850 $ 82,025 $122,125 Common equity $ 70,850 Total liabilities and equity $106,000 Income Statement for Year Ending December 31, 2015 Sales $214,000 Operating costs excluding depreciation and amortization 170,000 EBITDA $ 44,000 Depreciation & amortization 5,000 EBIT $ 39,000 Interest 1,750 EBT $ 37,250 Taxes (40%) 14,900 Net income $ 22,350 Dividends paid $ 11,175
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