Calculate Computron’s net operating profit after taxes (NOPAT). Identify the opening current assets. Identify the operating current liabilities. Calculate how much net operating working capital and total net operating capital that Computron has. Hint: NOPAT = EBIT * (1 - Tax Rate
Calculate Computron’s net operating profit after taxes (NOPAT). Identify the opening current assets. Identify the operating current liabilities. Calculate how much net operating working capital and total net operating capital that Computron has. Hint: NOPAT = EBIT * (1 - Tax Rate
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Computron's |
||
2019 | 2020 | |
Assets | ||
Cash and equivalents | $ 60 | $ 50 |
Short-term investments | 100 | 10 |
Accounts receivable | 400 | 520 |
Inventories | 620 | 820 |
Total current assets | $ 1,180 | $ 1,400 |
Gross fixed assets | $ 3,900 | $ 4,820 |
Less: Accumulated |
1,000 | 1,320 |
Net fixed assets | $ 2,900 | $ 3,500 |
Total assets | $ 4,080 | $ 4,900 |
Liabilities and equity | ||
Accounts payable | $ 300 | $ 400 |
Notes payable | 50 | 250 |
Accruals | 200 | 240 |
Total current liabilities | $ 550 | $ 890 |
Long-term bonds | 800 | 1,100 |
Total liabilities | $ 1,350 | $ 1,990 |
Common stock | 1,000 | 1,000 |
1,730 | 1,910 | |
Total equity | $ 2,730 | $ 2,910 |
Total liabilities and equity | $ 4,080 | $ 4,900 |
Computron's Income Statement (Millions of Dollars) | 2019 | 2020 |
Net sales | $ 5,500 | $ 6,000 |
Cost of goods sold (Excluding depr. & amort.) | 4,300 | 4,800 |
Depreciation and amortizationa | 290 | 320 |
Other operating expenses | 350 | 420 |
Total operating costs | $ 4,940 | $ 5,540 |
Earnings before interest and taxes (EBIT) | $ 560 | $ 460 |
Less interest | 68 | 108 |
Pre-tax earnings | $ 492 | $ 352 |
Taxes (25%) | 123 | 88 |
Net Income | $ 369 | $ 264 |
Notes: | ||
a Computron has no amortization charges. |
Computron's Income Statement (Millions of Dollars) | 2019 | 2020 |
Net sales | $ 5,500 | $ 6,000 |
Cost of goods sold (Excluding depr. & amort.) | 4,300 | 4,800 |
Depreciation and amortizationa | 290 | 320 |
Other operating expenses | 350 | 420 |
Total operating costs | $ 4,940 | $ 5,540 |
Earnings before interest and taxes (EBIT) | $ 560 | $ 460 |
Less interest | 68 | 108 |
Pre-tax earnings | $ 492 | $ 352 |
Taxes (25%) | 123 | 88 |
Net Income | $ 369 | $ 264 |
Notes: | ||
a Computron has no amortization charges. |
Computron's Statement of Cash Flows (Millions of Dollars)
|
||
2020 | ||
Operating Activities | ||
Net Income before preferred dividends | $ 264 | |
Noncash adjustments | ||
Depreciation and amortization | 320 | |
Due to changes in working capital | ||
Change in accounts receivable | (120) | |
Change in inventories | (200) | |
Change in accounts payable | 100 | |
Change in accruals | 40 | |
Net cash provided by operating activities | $ 404 | |
Investing activities | ||
Cash used to acquire fixed assets | $ (920) | |
Change in short-term investments | 90 | |
Net cash provided by investing activities | $ (830) | |
Financing Activities | ||
Change in notes payable | $ 200 | |
Change in long-term debt | 300 | |
Payment of cash dividends | (84) | |
Net cash provided by financing activities | $ 416 | |
Net change in cash and equivalents | $ (10) | |
Cash and securities at beginning of the year | 60 | |
Cash and securities at end of the year | $ 50 | |
Table 2A-1 | ||||
Individual Tax Table | ||||
If an individual's | He/she pays this | Plus this percentage | Average tax | |
taxable income | amount on the | on the excess | rate at | |
is between: | base of the bracket | over the base | top of bracket | |
(1) | (2) | (3) | (4) | (5) |
$0 | $9,525 | $0.00 | 10.0% | 10.0% |
$9,525 | $38,700 | $952.50 | 12.0% | 11.5% |
$38,700 | $82,500 | $4,453.50 | 22.0% | 17.1% |
$82,500 | $157,500 | $14,089.50 | 24.0% | 20.4% |
$157,500 | $200,000 | $32,089.50 | 32.0% | 22.8% |
$200,000 | $500,000 | $45,689.50 | 35.0% | 30.1% |
$500,000 | and up | $150,689.50 | 37.0% | 37.0% |
Married (Joint Return) Tax Table
|
||||
If a couple's | It pays this | Plus this percentage | Average tax | |
taxable income | amount on the | on the excess | rate at | |
is between: | base of the bracket | over the base | top of bracket | |
(1) | (2) | (3) | (4) | (5) |
$0 | $19,050 | $0.00 | 10.0% | 10.0% |
$19,050 | $77,400 | $1,905.00 | 12.0% | 11.5% |
$77,400 | $165,000 | $8,907.00 | 22.0% | 17.1% |
$165,000 | $315,000 | $28,179.00 | 24.0% | 20.4% |
$315,000 | $400,000 | $64,179.00 | 32.0% | 22.8% |
$400,000 | $600,000 | $91,379.00 | 35.0% | 26.9% |
$600,000 | and up | $161,379.00 | 37.0% | 37.0% |
- Calculate Computron’s
net operating profit after taxes (NOPAT). Identify the opening current assets. Identify the operating current liabilities. Calculate how much net operating working capital and total net operating capital that Computron has.- Hint: NOPAT = EBIT * (1 - Tax Rate
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