Required information Problem 9-5A (Static) Computing and analyzing times interest earned LO A1 [The following information applies to the questions displayed below.] Shown here are condensed income statements for two different companies (assume no income taxes). Miller Company Sales $ 1,000,000 800,000 Variable expenses (80%) Income before interest 200,000 Interest expense (fixed) 60,000 Net income $ 140,000 Sales $ 1,000,000 Variable expenses (60%) Income before interest Interest expense (fixed) Net income 600,000 400,000 260,000 $ 140,000 lem 9-5A (Static) Part 6 ich company would have a greater ability to pay interest expense if sales were to decrease? Miller Company Weaver Company Weaver Company

Required information Problem 9-5A (Static) Computing and analyzing times interest earned LO A1 [The following information applies to the questions displayed below.] Shown here are condensed income statements for two different companies (assume no income taxes). Miller Company Sales $ 1,000,000 800,000 Variable expenses (80%) Income before interest 200,000 Interest expense (fixed) 60,000 Net income $ 140,000 Sales $ 1,000,000 Variable expenses (60%) Income before interest Interest expense (fixed) Net income 600,000 400,000 260,000 $ 140,000 lem 9-5A (Static) Part 6 ich company would have a greater ability to pay interest expense if sales were to decrease? Miller Company Weaver Company Weaver Company

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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16. 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% Assuming the Company has no amortization expense, how much is its depreciation expense? Use 2 decimal places in your final answer
17. 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 Interest Expense. Use 2 decimal places in your final answer
15. Refer to the following financial information of Scholz Company: NOPAT                    8,250,000.00 EBITDA                  17,725,000.00 Net Income                    5,050,000.00 Capital Expenditures                    6,820,000.00 After tax capital costs                    6,280,000.00 Tax rate 40% Refer to Scholz Company, calculate its EVA. Use 2 decimal places for your final answer.
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 answer
Refer to the following financial information of Scholz Company: NOPAT 8,250,000 FBITDA 17,725,000 Net Income 5,050,000 Capital Expenditures 6,820,000 After tax capital costs 6,280,000 Tax rate 40% 1.Calculate the Company's depreciation and amortization expense 2. Refer to Scholz Company, calculate its interest expense. Use 2 decimal places for your final answer. 3. Refer to Scholz Company, calculate its EVA. Use 2 decimal places for your final answer
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?
1. Refer to the following financial information of Scholz Company: NOPAT 8,250,000.00 EBITDA 17,725,000.00 Net Income 5,050,000.00 Capital Expenditures 6,820,000.00 After tax capital costs 6,280,000.00 Tax rate 40% Calculate the Company’s depreciation and amortization expense 2. Refer to Scholz Company, calculate its interest expense. Use 2 decimal places for your final answer. 3. Refer to Scholz Company, calculate its EVA. Use 2 decimal places for your final answer.
Refer to the following financial information of Scholz Company: NOPAT 8.250.000.00 EBITDA 17,725.000.00 Net Income 5,050,000.00 Capital Expenditures 6,820,000.00 After tax capital costs 6,280.000.00 Tax rate 40% 1. Calculate the Company's depreciation and amortization expense 2. calculate its interest expense. Use 2 decimal places for your final answer. 3. calculate its EVA. Use 2 decimal places for your final answer.
Times interest earned Averill Products Inc. reported the following on the company’s income statement in 20Y8 and 20Y9: 20Y9 20Y8 Interest expense $410,000 $380,000 Income before income tax expense 4,756,000 3,914,000 a. Determine the times interest earned ratio for 20Y8 and 20Y9. Round to one decimal place. 20Y9 20Y8 Times Interest Earned fill in the blank 1 fill in the blank 2 b. Is the change in the times interest earned ratio favorable or unfavorable?
7.The following data were available for ABC Corp at Dec 31, 20X2:Net purchases P345,000Inventory, Dec 31 P11,000Gross Sales, 446,250Sales returns, P10,000Gross profit is 25% of costHow much was the cost of sales during the year? 109,063 111,563 349,000 357,000
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)
Shown here are condensed income statements for two different companies (assume no income taxes). Ellis CompanySales . . . . . . . . . . . . . . . . . . . . . . . . . . . . $240,000Variable expenses (50%) . . . . . . . . . . . . 120,000Income before interest . . . . . . . . . . . . . 120,000Interest expense (fixed) . . . . . . . . . . . . . 90,000Net income . . . . . . . . . . . . . . . . . . . . . . . $ 30,000 Seidel CompanySales . . . . . . . . . . . . . . . . . . . . . . . . . . . . $240,000Variable expenses (75%) . . . . . . . . . . . . 180,000Income before interest . . . . . . . . . . . . . 60,000Interest expense (fixed) . . . . . . . . . . . . . 30,000Net income . . . . . . . . . . . . . . . . . . . . . . . $ 30,000 Required 1. Compute times interest earned for Ellis Company and for Seidel Company. 2. What happens to each company’s net income if sales increase by 10%? 3. What happens to each company’s net income if sales increase by 40%? 4. What happens to each company’s net…