You look at Company ABC’s financial statements for 2019 and yousee operating income as $50,000....

You look at Company ABC’s financial statements for 2019 and you see operating income as $50,000. Depreciation for the year was $20,000. Interest was $5,000. Capital Expenditure was $10,000. Tax rate is 20%. What is levered cash flow?

Solutions

Expert Solution

Levered Cashflow is the cash flow that is available to both shareholders and debtholders.

Operating Income is the income that is available to both Bondholder and Equity Holder. Depreciation is a noncash expense, so it will not be deducted. and interest will also not be deducted as the Interest portion is what the debtholder receives.

EBITDA = 50,000

less, Capital Expenditure= 10,000

Total = 40,000

Less Tax(20%) = 8,000

Levered Cashflow= 32,000

Net Working Capital is Current asset - Current Liability. CA and CL information is not given.

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

You look at Company ABC’s financial statements for 2019 and yousee operating income as $50,000....

A firm's financial statements showed sales of 400,000 net income of 50,000 operating expense of 80,000...

A firm's financial statements showed sales of 400,000 net income of 50,000 operating expense of 80,000 accounts payable of 160,000 and a cost of goods sold of 200,000. If the company's tax rate is 28% and the only missing expense is interest, what is the company's interest expense?

2019 financial statements are shown below: Income Statement for December 31, 2019 Sales $4,000,000 Operating costs...

2019 financial statements are shown below: Income Statement for December 31, 2019 Sales $4,000,000 Operating costs 3,200,000 EBIT $ 800,000 Interest 120,000 Pre-tax earnings $ 680,000 Taxes (25%) 170,000 Net income 510,000 Dividends $ 190,000 Balance Sheet as of December 31, 2019 Cash $ 160,000 Accounts payable $ 360,000 Receivables 360,000 Line of credit 0 Inventories 720,000 Accruals 200,000 Total CA $1,240,000 Total CL $ 560,000 Fixed assets 4,000,000 Long-term bonds 1,000,000 Total Assets $5,240,000 Common stock 1,100,000 RE 2,580,000...

Choose a company and look at their financial statements. Using the information on the Financial Statements...

Choose a company and look at their financial statements. Using the information on the Financial Statements compute a minimum of four ratios of your choice. For each of the ratios you've calculated explain what these ratios tell about the company?

Choose a company and look at their financial statements. Using the information on the Financial Statements...

COMPANY STARBUCKS Using the financial statements, answer the following questions: Look at the income statement and...

COMPANY STARBUCKS Using the financial statements, answer the following questions: Look at the income statement and comment on the company’s profitability. What is basic earnings per share? It may be listed on the income statement itself, or you might have to calculate it. Look at the balance sheet. Calculate the current ratio and comment on the company’s liquidity. Calculate the debt-to-total-assets ratio and comment on the company’s solvency. Look at the statement of cash flows Comment on the results of...

Income statements for Benson Company for 2018 and 2019 follow: BENSON COMPANY Income Statements 2019 2018...

Income statements for Benson Company for 2018 and 2019 follow: BENSON COMPANY Income Statements 2019 2018 Sales $ 201,800 $ 181,800 Cost of goods sold 142,800 120,800 Selling expenses 21,500 19,500 Administrative expenses 12,800 14,800 Interest expense 3,300 5,300 Total expenses $ 180,400 $ 160,400 Income before taxes 21,400 21,400 Income taxes expense 6,500 3,600 Net income $ 14,900 $ 17,800 Required Perform a horizontal analysis, showing the percentage change in each income statement component between 2018 and 2019. Perform...

Income statements for Burch Company for 2018 and 2019 follow: BURCH COMPANY Income Statements 2019 2018...

Income statements for Burch Company for 2018 and 2019 follow: BURCH COMPANY Income Statements 2019 2018 Sales $ 240,000 $ 200,000 Cost of goods sold 180,000 124,000 Selling expenses 26,000 20,000 Administrative expenses 12,000 18,000 Interest expense 7,500 8,000 Total expenses $ 225,500 $ 170,000 Income before taxes 14,500 30,000 Income taxes expense 1,200 3,000 Net income $ 13,300 $ 27,000 Required a. Perform a horizontal analysis, showing the percentage change in each income statement component between 2018 and 2019....

The 2019 financial statements for Growth Industries are presented below. INCOME STATEMENT, 2019 Sales $ 250,000...

The 2019 financial statements for Growth Industries are presented below. INCOME STATEMENT, 2019 Sales $ 250,000 Costs 175,000 EBIT $ 75,000 Interest expense 15,000 Taxable income $ 60,000 Taxes (at 21%) 12,600 Net income $ 47,400 Dividends $ 28,440 Addition to retained earnings $ 18,960 BALANCE SHEET, YEAR-END, 2019 Assets Liabilities Current assets Current liabilities Cash $ 8,000 Accounts payable $ 15,000 Accounts receivable 13,000 Total current liabilities $ 15,000 Inventories 29,000 Long-term debt 150,000 Total current assets $...

The 2019 financial statements for Growth Industries are presented below. INCOME STATEMENT, 2019 Sales $ 300,000...

The 2019 financial statements for Growth Industries are presented below. INCOME STATEMENT, 2019 Sales $ 300,000 Costs 200,000 EBIT $ 100,000 Interest expense 20,000 Taxable income $ 80,000 Taxes (at 21%) 16,800 Net income $ 63,200 Dividends $ 18,960 Addition to retained earnings $ 44,240 BALANCE SHEET, YEAR-END, 2019 Assets Liabilities Current assets Current liabilities Cash $ 6,000 Accounts payable $ 13,000 Accounts receivable 11,000 Total current liabilities $ 13,000 Inventories 33,000 Long-term debt 200,000 Total current assets $...

Subjects