Chapter 2 : Financial Statements, Cash Flow, and Taxes

SECTION 2-2

A firm has $8 million in total assets.  It has $3 million in current liabilities, $2 million in long-term debt, and $1 million in preferred stock.  What is the reported net worth (i.e., the reported common equity)?

SECTION 2-3

A firm has $2,000,000 million in earnings before taxes.  The firm has an interest expense of $300,000 and depreciation of $200,000; it has no amortization.  What is its EBITDA?

Now suppose a firm has the following information: $7 million in sales, $4 million of costs of goods sold excluding depreciation & amortization, $500,000 of other operating expenses. What is its EBITDA?

SECTION 2-4

A firm had a retained earnings balance of $3 million in the previous year.  In the current year, its net income is $2.5 million.  If it pays $1 million in common dividends in the current year, what it its resulting retained earnings balance?

SECTION 2-5

A firm has inventories of $2 million for the previous year and $1.5 million for the current year.  What impact does this have on net cash provided by operations?

SECTION 2-6

A firm has net income of $5 million.  Assuming that depreciation of $1 million is its only noncash expense, what is the firm’s net cash flow?

SECTION 2-7

Suppose a firm has the following information: Sales = $10 million; costs of goods sold (excluding depreciation) = $5 million; depreciation = $1.4 million; other operating expenses = $2 million; interest expense = $1 million. If the tax rate is 25%, what is NOPAT, the net operating profit after taxes?

Suppose a firm has the following information: Cash = $500,000; short-term investments = $2.5 million; accounts receivable = $1.2 million, net plant and equipment = $7.8 million. How much is tied up in operating current assets?

Suppose a firm has the following information: Accounts payable = $1 million; notes payable = $1.1 million; short-term debt = $1.4 million; accruals = $500,000; and long-term bonds = $3 million. What is the amount arising from operating current liabilities?

Suppose a firm has the following information: Operating current assets = $2.7 million; operating current liabilities = $1.5 million, long-term bonds = $3 million, net plant and equipment = $7.8 million; and other long-term operating assets = $1 million. How much is tied up in net operating working capital? How much is tied up in total net operating capital?

A firm’s total net operating capital for the previous year was $2 million.  For the current year, its total net operating capital is $2.5 million and its NOPAT is $1.2 million.  What is its free cash flow for the current year?

SECTION 2-8

A company has sales of $200 million, NOPAT of $12 million, net income of $8 million, new operating working capital (NOWC) of $10 million, total net operating capital of $100 million, and total assets of $110 million. What is it operating profitability (OP) ratio? Its capital requirment (CF) ratio? Its return on invested capital (ROIC)?

A firm has $100 million in total net operating capital.  Its return on invested capital is 14 percent, and its weighted average cost of capital is 10 percent.  What is its EVA?

SECTION 2-9

 If a corporation has $85,000 in taxable income, what is its tax liability?

Attachment:- Ch- 02 ToolKit Data.rar