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Here are simplified financial statements for Watervan Corporation: INCOME STATEMENT ( Figures in $ millions ) Net sales $ 8 9 7 . 0 0
Here are simplified financial statements for Watervan Corporation:
INCOME STATEMENT
Figures in $ millions
Net sales $
Cost of goods sold
Depreciation
Earnings before interest and taxes EBIT $
Interest expense
Income before tax $
Taxes
Net income $
BALANCE SHEET
Figures in $ millions
End of Year Start of Year
Assets
Current assets $ $
Longterm assets
Total assets $ $
Liabilities and shareholders equity
Current liabilities $ $
Longterm debt
Shareholders equity
Total liabilities and shareholders equity $ $
The companys cost of capital is
Required:
Calculate Watervans economic value added EVA
Note: Do not round intermediate calculations. Enter your answer in millions rounded to decimal places.
What is the companys return on capital? Use startofyear rather than average capital.
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to decimal places.
What is its return on equity? Use startofyear rather than average equity.
Note: Enter your answer as a percent rounded to decimal places.
Is the company creating value for its shareholders?
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