Question

Suppose you are given the following financial statement information.  Prepare an income statement for 2014 and 2015, and a Balance Sheet for 2014 and 2015.  Next, calculate the value of operating income (EBIT) in 2015.  (Round to 2 decimal places)

	2014	2015
Cost of goods sold	$3,753	4,591
Cash	1,200	1,608
Depreciation	684	877
Interest	53	133
Accounts payable	2,154	2,663
Total Equity	1,334	1,858
Sales	5,505	6,780
Accounts receivable	357	415
Long-term debt	1,636	2,078
Inventory	1,858	2,332
Tax rate	30%	30%
Dividends	321	326

Answer 1

Income Statement
	2014	2015
Sales	5,505	6,780
Cost of goods sold	$3,753	4,591
EBITDA	$1,752	$2,189
Depreciation	684	877
EBIT	$1,068	$1,312
Interest	53	133
EBT	$1,015	$1,179
Less: Tax	$304.50	$353.70
Net Income	$710.50	$825.30
Dividends	321	326
Profits transferred to Equity	$389.50	$499.30

Assuming that Equity value is before transfer from the Income statement and balancing figure is fixed assets.

BALANCE SHEETS

	2014	2015		2014	2015
			Current Assets
Accounts payable	2,154	2,663	Cash	1,200	1,608
Current Liabilities	2,154	2,663	Accounts receivable	357	415
Long-term debt	1,636	2,078	Inventory	1,858	2,332
Total Liabilities	3,790	4,741	Total current assets	3,415	4,355
Total Equity	1,334	1,858	Fixed assets	$2,098.50	$2,743.30
Profits transferred	$389.50	$499.30
Total equity and liabilities	$5,513.50	$7,098.30	Total Assets	$5,513.50	$7,098.30

EBIT in 2015 = $1312

WORKINGS