In: Accounting
For 2019, MB Corp. reported net sales of $ 830 million, 8% up
from the previous...
- For 2019, MB Corp. reported net sales of $ 830 million, 8% up
from the previous year. Its operating profit (EBIT) amounted to $
80 million in the same period. Due to substantial investments in
net working capital, the company’s net book value grew from $ 430
million to $ 460 million, while net fixed assets remained stable at
$ 260 million. However, the firm managed to maintain its capital
structure with a debt to equity ratio of 0.75 and a 40% Equity
Ratio.
Assuming a corporate income tax rate of 25% and interest rate of
4.0%, please determine the following:
o Net Profit Margin (5 points)
o Working Capital Requirement (WCR) and
working capital ratio over sales for 2018 (5 points)
o Post-tax Return On Invested Capital
(ROIC) for 2019 (10 points)
o Free Cash Flow (FCF) for 2019 (10
points)