Consider the following table of Actual earnings: Firm A Firm B Firm C Actual earnings $ 6,000 $ 14,000 $ 18,000 r 10 % 8 % 12 % BVt-1 $ 100,000 $ 150,000 $ 190,000 What are the abnormal earnings for Firm A? Multiple Choice $(4,000) $(6,000) $4,000 $6,000
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Consider the following table of Actual earnings:
| Firm A | Firm B | Firm C | |||||||||
| Actual earnings | $ | 6,000 | $ | 14,000 | $ | 18,000 | |||||
| r | 10 | % | 8 | % | 12 | % | |||||
| BVt-1 | $ | 100,000 | $ | 150,000 | $ | 190,000 | |||||
What are the abnormal earnings for Firm A?
Multiple Choice
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$(4,000)
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$(6,000)
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$4,000
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$6,000
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- Two firms have sales of $1.4 million each. Other financial information is as follows: Firm A B EBIT $ 340,000 $ 340,000 Interest expense 20,000 80,000 Income tax 45,000 15,000 Debt 1,990,000 410,000 Equity 1,450,000 2,040,000 What are the operating profit margins and the net profit margins for these two firms? Round your answers to two decimal places. Operating profit margins: Firm A: % Firm B: % Net profit margins: Firm A: % Firm B: % What are their returns on assets and on equity? Round your answers to two decimal places. Return on assets: Firm A: % Firm B: % Return on equity: Firm A: % Firm B: %Q28 If the company’s Earnings before interest and taxes (EBIT) are OMR 60,000, its cost of equity is 8% and overall cost of capital is 12%, what is the total value of the firm under Net Operating Income Approach? a. OMR 500,000 b. OMR 750,000 c. OMR 900,000 d. OMR 600,000What is the return on assets for a firm that has a gross profit of $1.2 million, an operating profit of $550 000, a net profit of $200 000, shortterm assets of $1 million, and longterm assets of $5 million? Question content area bottom Part 1 A. 9.2 percent B. 3.3 percent C. 4 percent D. 20 percent
- Active Fast Berhad has the following income statement items for 2021: Revenue/Sales RM559,236 Cost of goods sold RM311,003 EBIT RM248,233 Interest expenses RM93,938 Income tax expenses RM54,003 Dividend payment 40% of net profit What is the amount of the firm's retained earnings? Select one: a. RM163,438 b. RM60,175 c. RM40,117 d. RM148,910The target company has sales of $2 million, net income of $1 million, and cash flows to equity of $1.1 million. The industry P/E ratio is 16.5. What is the valuation of the target company? Group of answer choices $18.15 million $33 million $16.5 million $10 millionThe figures shown in the table below are an extract from the financial statements of Ridgeway (capital employed is $1.5m). $ Revenue 1,000,000 Cost of sales 400,000 Gross profit 600,000 Distribution expenses and administration cost 300,000 Profit before interest and tax 300,000 Finance cost 50,000 Profit before tax 250,000 Income tax expense 100,000 Profit after tax 150,000 What is the return on capital employed (ROCE)? A 7% B 10% C 40% D 20%
- Problem 9-13 Two firms have sales of $0.9 million each. Other financial information is as follows: Firm A B EBIT $ 190,000 $ 190,000 Interest expense 30,000 85,000 Income tax 65,000 10,000 Debt 1,340,000 850,000 Equity 560,000 730,000 What are the operating profit margins and the net profit margins for these two firms? Round your answers to two decimal places. Operating profit margins: Firm A: % Firm B: % Net profit margins: Firm A: % Firm B: % What are their returns on assets and on equity? Round your answers to two decimal places. Return on assets: Firm A: % Firm B: % Return on equity: Firm A: % Firm B: %The following scenario relates to questions 16 – 20. Summary financial information for ABC Co is given below, covering the last two years. 20X8 20X7 STATEMENT OF PROFIT OR LOSS (EXTRACT) $’000 $’000 Revenue 74,521 68,000 Cost of sales 28,256 25,772 Salaries and wages 20,027 19,562 Other costs 11,489 9,160 Profit before interest and tax 14,749 13,506 Interest 1,553 1,863 Tax 4,347 3,726 Profit after interest and tax 8,849 7,917 Dividends payable 4,800 3,100 20X8 20X7 STATEMENT OF FINANCIAL POSITION (EXTRACT) $’000 $’000 Shareholders’ funds 39,900 35,087 Long term debt 14,000 17,500 53,900 52,587 Other information Number of shares in issue (‘000) 14,000 14,000 P/E ratio (average for year) ABC Co 14.0 13.0 Industry 15.2 15.0 Shareholders’ investment EPS $0.63 $0.57 Share price $8.82 $7.41 Dividend per share $0.34 $0.22 What is the net profit margin for 20X8?Use the information below provided by Angel Baby Angel Company: Sales 8,250,000.00 Operating costs 4,725,000.00 Operating income 3,525,000.00 Interest expense 1,750,000.00 Earnings before taxes 1,775,000.00 Taxes (40%) 621,250.00 Net income 1,153,750.00 WACC = 8%, Total invested capital 24,875,000. Calculate the EVA. (2 decimal places)
- 18. The following financial information was provided by Anya Company: Net Income 8,255,000.00 NOPAT 75,785,000.00 EBITDA 143,000,000.00 Net Profit Margin 6.00% Operating capital 425,070,000.00 After tax cost of capital 12.00% Tax rate 35.00% Refer to Anya Company, calculate its sales. Use 2 decimal places in your final answerA firm has the following current assets. Cash € 250,000 Marketable securities 100,000 Accounts receivable 800,000 Inventories 1,450,000 Total current assets € 2,600,000 If current liabilities are €1,300,000, the firm’s A.Current ratio will not change if a payment of €100,000 is used to pay €100,000 of accounts payable. B.Current ratio will decrease if a payment of €100,000 cash is used to pay €100,000 of accounts payable. C.Acid-test (quick) ratio will not change if a payment of €100,000 cash is used to purchase inventory. D.Acid-test (quick) ratio will decrease if a payment of €100,000 cash is used to purchase inventory.Use the information below provided by Angel Baby Angel Company: Sales 8,250,000.00 Operating costs 4,725,000.00 Operating income 3,525,000.00 Interest expense 1,750,000.00 Earnings before taxes 1,775,000.00 Taxes (40%) 621,250.00 Net income 1,153,750.00 WACC = 8%, Total invested capital 24,875,000. Question 1.) What is its TIE ratio? Use 4 decimal places in your final answer. 2.) What is its Return on Invested Capital? Use 2 decimal places in your final answer. Express in percentage 3.) Calculate the EVA. (2 decimal places)