6 HyperVentures, Inc (HV) has the following income statement, but lost some numbers Fill in the missing numbers INCOME STATEMENT For the three months ended December 31, 2017 Net Revenues $ 3,000,000 Cost of Goods Sold $ Gross Margin $ 1,950,000 Administrative Expenses $ 675,000 Sales and Marketing Expenses $ 900,000 Depreciation $ 235,000 Operating Profit $ Interest Expense $ Earnings Before Taxes $ 50,000 a What is HVs EBIT b What is HVs EBITDA c What is HVs Net Income Assume their tax rate is 20 7 Suppose HV received an equity investment sufficient for them to pay off all debts Then what would their EBITDA be 8 Treating all operating expenses as fixed costs, what dollar volume does HV need to sell to reach breakeven 9 HVs P L was created using accrual accounting If HV used cash accounting, and their accounts payable increased by $10,000 and their accounts receivable increased by $20,000, what would their cash profit be Hint recall that in cash accounting, expenses arent counted until you write the check for them, and sales arent counted until the customer pays for them How does this change HVs income and expenses 10 Another way of looking at profitability for a company is to calculate their NOPAT net operating profit after taxes Since we know what operating profit is, we should be able to calculate NOPAT for HV What is HVs NOPAT for 2017 Based on what is left out of the NOPAT calculation (interest expenses), what does NOPAT tell us and why would we be interested in it Another way of looking at profitability for a company is to calculate their NOPAT Net Operating Profit After Taxes Since we know what operating profit is (see question 6) we should be able to calculate NOPAT for HV Using 20 as HVs tax rate, what is HVs NOPAT for 2017 Based on what is left out of the NOPAT calculation (interest expenses), what does NOPAT tell us and why would we be interested in it

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6  HyperVentures, Inc  (HV) has the following income statement, but lost some numbers  Fill in the missing numbers  INCOME STATEMENT For the three months ended December 31, 2017 Net Revenues $ 3,000,000 Cost of Goods Sold $ Gross Margin $ 1,950,000 Administrative Expenses $ 675,000 Sales and Marketing Expenses $ 900,000 Depreciation $ 235,000 Operating Profit $ Interest Expense $ Earnings Before Taxes $ 50,000 a What is HVs EBIT  b  What is HVs EBITDA  c What is HVs Net Income  Assume their tax rate is 20   7  Suppose HV received an equity investment sufficient for them to pay off all debts  Then what would their EBITDA be  8  Treating all operating expenses as fixed costs, what dollar volume does HV need to sell to reach breakeven  9  HVs P L was created using accrual accounting  If HV used cash accounting, and their accounts payable increased by $10,000 and their accounts receivable increased by $20,000, what would their cash profit be   Hint  recall that in cash accounting, expenses arent counted until you write the check for them, and sales arent counted until the customer pays for them  How does this change HVs income and expenses  10  Another way of looking at profitability for a company is to calculate their NOPAT  net operating profit after taxes  Since we know what operating profit is, we should be able to calculate NOPAT for HV  What is HVs NOPAT for 2017  Based on what is left out of the NOPAT calculation (interest expenses), what does NOPAT tell us and why would we be interested in it  Another way of looking at profitability for a company is to calculate their NOPAT  Net Operating Profit After Taxes  Since we know what operating profit is (see question 6)  we should be able to calculate NOPAT for HV  Using 20  as HVs tax rate, what is HVs NOPAT for 2017  Based on what is left out of the NOPAT calculation (interest expenses), what does NOPAT tell us and why would we be interested in it

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6. HyperVentures, Inc. (HV) has the following income statement, but lost some numbers. Fill in the missing numbers. INCOME STATEMENT For the three months ended

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