How do you find the tax shield from NFE ?
Here is my exercise with solution.
) Reformulate the Income Statement so it is useful for statement analysis and valuation purposes.
Here is the answer:
Hildebrando's Beer Group is a Norwegian firm that presented the following income statement for the year 2018 and statements of financial position for the years 2017 and 2018. Assume that the marginal tax rate is 25%. Hildebrando's Beer Group Income statement (NOKM) 2018 Net revenue 65,354 Cost of sales 33,429 Gross Profit 31,925 Sales and distribution costs 6,312 Administrative expenses 4,909 Depreciation expense Other operating income 7,450 925 Other operating expenses 2,100 Operating profit 12,079 Financial income 490 Financial expenses 2,021 Profit before tax 10,548 2,637 Corporation tax Consolidated profit 7,911 Hildebrando's Beer Group Balance Sheet (NOKM) Assets (NOKm) 2017 2018 Non-current assets PP&E 135,700 135,000 Total non-current assets 135,000 135,700 Current assets Operating Current Assets Cash and cash equivalents 16,225 13,945 1,086 2,332 16,277 151,277 Total current assets 17,311 153,011 Total assets Equity and liabilities (NOKm) Total Equity 2017 2018 73,607 72,025 Non-current liabilities 44,537 Long-term Interest Bearing Debt 51,817 Provisions 2,646 3,374 Total non-current liabilities 54,463 47,911 Current liabilities Short-term Interest Bearing Debt 14,492 17,411 12,348 Operating Current Liabilities 12,031 Total current liabilities 29,759 26,523 Total liabilities 80,986 153,011 77,670 Total equity and liabilities 151,277 Hildebrando's Beer Group Reformulated I.S. (NOKm) 2018 Net revenue (0) 65,354 Cost of sales (O) 33,429 Gross Profit 31,925 Sales and distribution costs (O) 6,312 Administrative expenses (O) Other operating income (O) Other operating expenses (O) 4,909 925 2,100 19,529 EBITDA Depreciation expense (O) 7,450 EBIT 12,079 2,637 Corporation tax - Tax shield from NFE 383 9,059 NOPAT Financial income (F) Financial expenses (F) 490 2,021 |+Tax-shield from NFE Consolidated profit 383 7,911 Hildebrando's Beer Group is a Norwegian firm that presented the following income statement for the year 2018 and statements of financial position for the years 2017 and 2018. Assume that the marginal tax rate is 25%. Hildebrando's Beer Group Income statement (NOKM) 2018 Net revenue 65,354 Cost of sales 33,429 Gross Profit 31,925 Sales and distribution costs 6,312 Administrative expenses 4,909 Depreciation expense Other operating income 7,450 925 Other operating expenses 2,100 Operating profit 12,079 Financial income 490 Financial expenses 2,021 Profit before tax 10,548 2,637 Corporation tax Consolidated profit 7,911 Hildebrando's Beer Group Balance Sheet (NOKM) Assets (NOKm) 2017 2018 Non-current assets PP&E 135,700 135,000 Total non-current assets 135,000 135,700 Current assets Operating Current Assets Cash and cash equivalents 16,225 13,945 1,086 2,332 16,277 151,277 Total current assets 17,311 153,011 Total assets Equity and liabilities (NOKm) Total Equity 2017 2018 73,607 72,025 Non-current liabilities 44,537 Long-term Interest Bearing Debt 51,817 Provisions 2,646 3,374 Total non-current liabilities 54,463 47,911 Current liabilities Short-term Interest Bearing Debt 14,492 17,411 12,348 Operating Current Liabilities 12,031 Total current liabilities 29,759 26,523 Total liabilities 80,986 153,011 77,670 Total equity and liabilities 151,277 Hildebrando's Beer Group Reformulated I.S. (NOKm) 2018 Net revenue (0) 65,354 Cost of sales (O) 33,429 Gross Profit 31,925 Sales and distribution costs (O) 6,312 Administrative expenses (O) Other operating income (O) Other operating expenses (O) 4,909 925 2,100 19,529 EBITDA Depreciation expense (O) 7,450 EBIT 12,079 2,637 Corporation tax - Tax shield from NFE 383 9,059 NOPAT Financial income (F) Financial expenses (F) 490 2,021 |+Tax-shield from NFE Consolidated profit 383 7,911
