Income Statements and Market Value
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I need assistance solving the following problems related to the income statement and market value.
1. Mike's Machine Shop has an EBITDA of $512,725.20, EBIT of $362,450.20, and cash flow of $348,461.25. What is the firm's net income after taxes?
2. Larry's Landscaping reported the following information to its' stockholders: Total current assets worth $237,513 at book value and $219,344 at market value. Long-term assets (plant & equipment) valued at market for $343,222, while their book value is $362,145. Total current liabilities valued at market for $134,889, while their book value is $129,175. Both the book value and the market value of its long-term debt is $144,000. If the company's total assets are equal to a market value of $562,566 (book value of $599,658), what is the difference in the book value and market value of its stockholders' equity?
3. Belco, Inc. has net income of $9,054,000 on net sales of $256,329,812. The company has total assets of $104,912,112 and shareholders' equity of $43,623,445. Use the extended DuPont identity to find the return on assets and return on equity for the firm.
4. Anna's Linens has an operating profit margin of 10.3% on revenues of $24,547,125 and total assets of $8,652,352.
a. Find the company's total asset turnover ratio and its operating profit (EBIT).
b. If the company's management has set a target for the total asset turnover ratio to be 3.25 next year without any change to the total assets of the company, what will have to be the new sales level for the next year? Calculate change in sales necessary and the percentage sales necessary.
c. If the operating profit margin now shrinks to 10%, what will be the EBIT at the new level of sales?
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