Question
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)
Solutions
ekkarill92 answered 1 year agoRelated Solutions
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...
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Some industry averages for Anderson’s line of business are
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For 2019, Gourmet Kitchen Products reported $22 million of sales
and $17 million of operating costs (including depreciation). The
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was 25%. What was the firm's economic value added (EVA), that is,
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The Churgin Corp. had sales of $310 million this year, costs
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The Churgin Corp. had sales of $310 million this year, costs were $185 million and net...
The Churgin Corp. had sales of $310 million this year, costs
were $185 million and net investment was $55 million. Each of these
values is project to grow at 10% per year for the next 5 years,
afterwards these values will grow at 4% indefinitely. There are
10.25 million shares outstanding and investors require a 9% rate of
return on their investment. The corporate tax rate is 25%. Use the
growing perpetuity formula to estimate the terminal value,
calculate the...
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Alaska corp. reported the following information for the current year: (1) Net income is $205 million....
Alaska corp. reported the following information for the current
year: (1) Net income is $205 million. (2) Acquisitions were $32
million. (3) Customer accounts receivable increased by $12 million.
(4) Dividends paid to common shareholders were $8 million. (5)
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decreased by $11 million. (7) Long-term debt increased by $28
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sales are expected to increase by 20% from $7.2 million in 2019 to $8.64 million in...
sales are expected to increase by 20% from $7.2 million in 2019
to $8.64 million in 2020. Its assets totaled $2 million at the end
of 2019. Broussard is already at full capacity, so its assets must
grow at the same rate as projected sales. At the end of 2019,
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the...
Carlsbad Corporation's sales are expected to increase from $5 million in 2019 to $6 million in...
Carlsbad Corporation's sales are expected to increase from $5
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totaled $2 million at the end of 2019. Carlsbad is at full
capacity, so its assets must grow in proportion to projected sales.
At the end of 2019, current liabilities are $1 million, consisting
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Assume that...
Carlsbad Corporation's sales are expected to increase from $5 million in 2019 to $6 million in...
Carlsbad Corporation's sales are expected to increase from $5
million in 2019 to $6 million in 2020, or by 20%. Its assets
totaled $4 million at the end of 2019. Carlsbad is at full
capacity, so its assets must grow in proportion to projected sales.
At the end of 2019, current liabilities are $1 million, consisting
of $250,000 of accounts payable, $500,000 of notes payable, and
$250,000 of accrued liabilities. Its profit margin is forecasted to
be 3%.
Assume that...
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