At the end of last year, River Side Company achieved $9 million in revenues (EBITDA). Depreciation expense was $2.2 million, with interest paid of $900,000 and a corporate tax rate of 32%. At the end of the fiscal year it had current assets totaling $12 million, $2 million in accounts payable, $1.4 million in accrued liabilities, $1.2 million in other payables, and $7 million in property, plant, and equipment. Assume that River Side has no excess cash, uses debt and equity to finance its operations, has no current liabilities, and recognizes depreciation periodically. Determine the company's net income or loss. Calculate net working capital and operating working capital.
At the end of last year, River Side Company achieved $9 million in revenues (EBITDA). Depreciation expense was $2.2 million, with interest paid of $900,000 and a corporate tax rate of 32%. At the end of the fiscal year it had current assets totaling $12 million, $2 million in accounts payable, $1.4 million in accrued liabilities, $1.2 million in other payables, and $7 million in property, plant, and equipment. Assume that River Side has no excess cash, uses debt and equity to finance its operations, has no current liabilities, and recognizes depreciation periodically. Determine the company's net income or loss. Calculate net working capital and operating working capital.
Chapter2: Financial Statements, Cash Flow, And Taxes
Section: Chapter Questions
Problem 1STP
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At the end of last year, River Side Company achieved $9 million in revenues (EBITDA).
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