7. Analyzing accounting data for managerial decisions Accounting data are used to analyze cash flows, and this analysis is critical for decision making. Consider the following case: 38H Corp. recently hired Jeffrey. His immediate mandate was to analyze the company. He has to subrrut a report on the company's operational efficiency and estimate potential investment in working capital. He has the income statement from last year and the following information from the company's financial reports as well as some industry averages. Last year, 3BH Corp. reported a book value of $350 million in current assets, of which 40% is cash, 42% is short-term investments, and the rest is accounts receivable and inventory. The company reported $297.5 million of current liabilities including accounts payable and accruals. Interestingly, the company had no notes payable claims last year. There were no changes in the accounts payables during the reporting period. The company, however, invested heavily in plant and equipment to support its operations. It reported a book value of $560 million in long-term assets last year Income Statement l'or the Year Ended on December 31 (Millions of dollars) 18H Corp. Industry Average Net sales $3,700 $4,625 Operating costs, except depreciation and amortization 2,960 3.700 Depreciation and amortization 148 155 Total operating costs 3.108 3,885 Operating income (or EBIT) $592 5740 Less Interest 59 111 5533 5629 Earnings before torces (ET) Les taxes (40%) 213 252 Net income $320 $377 ased on the information given to Jeffrey, he subentro on January 1 with some important calculation for management to use both for analysis and to devise an action plan. Which of the following statements his report wete? Check at that ply Comp-4.5 milion of nonstore bearing current assets niet of noninterest charging lates Based on the formation on industry average other players in the industry would generate higher profits than dorp. they ne debt and held no financatat DAH Cocha 1470 milioni monoperating sets Corp. 1260,7 million of net operating Capital The 54555 million of total net operating to run the business 7. Analyzing accounting data for managerial decisions Accounting data are used to analyze cash flows, and this analysis is critical for decision making. Consider the following case: 38H Corp. recently hired Jeffrey. His immediate mandate was to analyze the company. He has to subrrut a report on the company's operational efficiency and estimate potential investment in working capital. He has the income statement from last year and the following information from the company's financial reports as well as some industry averages. Last year, 3BH Corp. reported a book value of $350 million in current assets, of which 40% is cash, 42% is short-term investments, and the rest is accounts receivable and inventory. The company reported $297.5 million of current liabilities including accounts payable and accruals. Interestingly, the company had no notes payable claims last year. There were no changes in the accounts payables during the reporting period. The company, however, invested heavily in plant and equipment to support its operations. It reported a book value of $560 million in long-term assets last year Income Statement l'or the Year Ended on December 31 (Millions of dollars) 18H Corp. Industry Average Net sales $3,700 $4,625 Operating costs, except depreciation and amortization 2,960 3.700 Depreciation and amortization 148 155 Total operating costs 3.108 3,885 Operating income (or EBIT) $592 5740 Less Interest 59 111 5533 5629 Earnings before torces (ET) Les taxes (40%) 213 252 Net income $320 $377 ased on the information given to Jeffrey, he subentro on January 1 with some important calculation for management to use both for analysis and to devise an action plan. Which of the following statements his report wete? Check at that ply Comp-4.5 milion of nonstore bearing current assets niet of noninterest charging lates Based on the formation on industry average other players in the industry would generate higher profits than dorp. they ne debt and held no financatat DAH Cocha 1470 milioni monoperating sets Corp. 1260,7 million of net operating Capital The 54555 million of total net operating to run the business