Here are simplified financial statements for Watervan Corporation:INCOME STATEMENT(Figures in $ millions)Net sales$900.00Cost of goods soldDepreciationEarnings before interest and taxes (EBIT)Interest expenseIncome before tax760.0050.00$ 90.0031.00$ 59.0012.39$ 46.61TaxesNet incomeBALANCE SHEET(Figures in $ millions)End ofStartYearof YearAssetsCurrent assets$ 388$ 350Long-term assets296241Total assets$ 684$ 591Liabilities and shareholders' equityCurrent liabilities$ 176$ 213Long-term debtShareholders' equity127140344256Total liabilities and shareholders' equity$ 684$ 572The company's cost of capital is 8.5%.a. Calculate Watervan's economic value added (EVA). (Do not round intermediate calculations. Enter your answer in millionsrounded to 2 decimal places.)b. What is the company's return on capital? (Use start-of-year rather than average capital.) (Do not round intermediate calculations.Enter your answer as a percent rounded to 2 decimal places.)c. What is its return on equity? (Use start-of-year rather than average equity.) (Enter your answer as a percent rounded to 2 decimalplaces.)d. Is the company creating value for its shareholders?

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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

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Condensed financial data are presented below for the Tulsa Corporation: Accounts receivable Inventory C. d. Total current assets Total assets Current liabilities Long-term liabilities Sales Cost of goods sold Interest expense Net income Tax rate 2021 $277,500 310,000 675,000 800,000 700,000 250,000 200,000 77,500 75,000 1,640,000 985,000 10,000 130,000 25% 2020 $230,000 250,000 565,000 The profit margin used to calculate return on assets for 2021 is (rounded): a. b. 8.9% 16.3% 17.2% 18.3%
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Return on Total Assets A company reports the following income statement and balance sheet information for the current year: Net income $661,910Interest expense 116,810Average total assets 6,280,000Determine the return on total assets. If required, round the answer to one decimal place.fill in the blank 1 %
Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total expenses Income before taxes. Income tax expense Net income Assets Current assets Long-term investments Plant assets, net Total assets Sin Comparative Income Statements For Years Ended December 31 2021 $ 420,027 252,856 167,171 59,644 37,802 97,446 69,725 12,969 $ 56,756 Liabilities and Equity Current liabilities Common stock Other paid-in capital Retained earnings Total liabilities and equity Assets Current assets Long-term investments Plant assets, net. Total assets Liabilities and Equity Current liabaties Common stock Other paid-in capital Retained earnings Total liabilities and equity 2020 $ 321,775 202,718 KORBIN COMPANY Comparative Balance Sheets December 31 2021 119,057 44,405 28,316 72,721 46,336 9,499 $ 36,837 $ 55,286 0 102,674 $ 157,960 2020 3. Complete the below table to calculate the balance sheet data in trend percents with 2019 as answers to 2 decimal places.) 111.77 % 0.00 $ 37,003 700…
Bhupatbhai
The income statement of Booker T Industries Inc. for the current year ended June 30 is as follows: Sales $570,960 Cost of merchandise sold 324,190 Gross profit $246,770 Operating expenses: Depreciation expense $43,810 Other operating expenses 115,830 Total operating expenses 159,640 Income before income tax S87,130 Income tax expense 24,180 Net income $62,950 Changes in the balances of selected accounts from the beginning to the end of the current year are as follows: Increase Decrease Accounts receivable (net) S(12,650) Inventories 4,410 Prepaid expenses (4,220) Accounts payable (merchandise creditors) (9,000) Accrued expenses payable (operating expenses) 1,260 Income tax payable (3,020) a. Prepare the Cash Flows from (used for) Operating Activities section of the statement of cash flows, using the direct method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Booker T Industries Inc. Cash Flows from Operating Activities…
Crane Ltd. reported the following for the fiscal year 2021: Sales Cost of goods sold Gross profit Operating expenses Depreciation expense Gain on sale of land Profit before income tax Income tax expense Profit Additional information: 1. 2. CRANE LTD. Income Statement Year Ended September 30, 2021 3. 4. 5. 6. $ 109,000 34,000 (44,000) $583,000 338,000 245,000 99,000 146,000 36,500 $109,500 Accounts receivable decreased by $16,300 during the year. Inventory increased by $7,800 during the year. Prepaid expenses decreased by $5,800 during the year. Accounts payable to suppliers increased by $11,300 during the year. Accrued expenses payable increased by $5,300 during the year. Income tax payable decreased by $7,100 during the year.
Return on total assets A company reports the following income statement and balance sheet information for the current year: Net income $266,220 Interest expense 46,980 Average total assets 4,350,000 Determine the return on total assets. If required, round the percentage to one decimal place. %
A company reports the following income statement and balance sheet information for the current year: Net income $132,370 Interest expense 11,510 Average total assets 2,180,000 Determine the return on total assets. Round the percentage to one decimal place.fill in the blank %
BALANCE SHEET AT END OF YEAR (Figures in $ millions) Assets 2021 2022 Liabilities and Shareholders' Equity 2021 2022 Current assets $ 102 $ 200 Current liabilities $ 74 $ 96 Net fixed assets 920 1,020 Long-term debt 660 870 INCOME STATEMENT, 2022 (Figures in $ millions) Revenue $ 2,010 Cost of goods sold 1,090 Depreciation 410 Interest expense 252 g. Net fixed assets increased from $920 million to $1,020 million during 2022. What must have been South Sea’s gross investment in fixed assets during 2022?........... (M1)
The following financial statements apply to Adams Company: ADAMS COMPANY Income Statements for the Years Ending December 31 Year 1 $180,400 Revenues Expenses Cost of goods sold Selling expenses General and administrative expenses Interest expense Income tax expense Total expenses Net income Assets Current assets Cash Marketable securities Accounts receivable Inventories Prepaid expenses Total current assets Plant and equipment (net) Intangibles Total assets Liabilities and Stockholders Equity Liabilities Current liabilities Accounts payable Other Total current liabilities Bonds payable Total liabilities $ 220,800 Stockholders equity Common stock (49,000 shares) 124, 600 20,200 10,000 2.100 20,400 177,300 $ 43,500 ADAMS COMPANY Balance Sheets As of December 31 F Retained earnings Total stockholders equity Total liabilities and stockholders' equity 102, 100 18.200 9,000 2,100 17,600 149,000 $ 31,400 $ 5,100 1,800 36,000 101, 200 4,800 148,900 107,000 20,600 $ 276,500 $38,200 16,500…

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