ABC Corp

2014 Income Statement

($ in millions)

Net sales $9,610

Less: Cost of goods sold 6,310

Less: Depreciation 1,370

Earnings before interest and taxes 1,930

Less: Interest paid 630

Taxable Income $1,300

Less: Taxes 455

Net income $ 845

Dividends paid to shareholders $ 275

ABC COrp

2013 and 2014 Balance Sheets

($ in millions)

2018 2019 2018 2019

Cash $ 310 $ 405 Accounts payable $ 2,720 $ 2,570

Accounts rec. 2,640 3,055 Notes payable 100 0

Inventory 3,275 3,850 Total Curr. Liab. $ 2,820 $ 2,570

Total Curr. Assets $ 6,225 $ 7,310 Long-term debt 7,875 8,100

Net fixed assets 10,960 10,670 Common stock 5,000 5,250

Retained earnings 1,490 2,060

Total assets $17,185 $17,980 Total liab.& equity $17,185 $17,980

Q. What is the change in Net Working Capital from 2013 to 2014? What is the amount of Net Capital Spending for 2014? What is the amount of Operating Cash Flow for 2014? What is the Cash Flow to the Creditors for 2014? Calculate the (a) ROA (Return on Assets) and (b) Net Profit Margin Ratios for 2014. Calculate the (a) Total Asset Turnover and (b) Equity Multiplier Ratio for 2014. Using the DuPont Approach and the ratios calculated above, demonstrate the calculation of the Return on Equity (ROE) for 2014?