I have answered some of the blocks but can't figure out the other ones. Please answer and show how you did it. Thank you!
Ch 06: Assignment - Accounting for Financial Management value has changed over the past year. The investment firm for which you work will make a positive (or "buy") recommendation to its investing clients if Westem G&E's value has increased over the past year, a neutral (or "hold") recommendation if the value has remained constant, or a negative (or "sell") recommendation if the value has decreased. He has recommended that you use several metrics to ascertain how the firm's value has changed, and he has provided you with the following income statement and balance sheet. Year 1 Year 1 Western Gas & Electric Co. Income Statement January 1 - December 31, Year 2 Year 2 Sales $10,175,000 Expenses! 8,140,000 EBITDA 2,035,000 Depreciation and amortization expense 356,125 EBIT 1,678,875 Interest expense EBT 1,373,625 Tax expense (40%) 549,450 Net income $824,175 $9,250,000 7,585,000 1,665,000 323,750 1,341,250 231,250 1,110,000 444,000 $666,000 $527,250 1,757,500 3,075,625 5,360,375 3,427,125 $8,787,500 305,250 Western Gas & Electric Co. Balance Sheet December 31, Year 2 Assets: Year 2 Cash and cash equivalents $553,613 Receivables 1,845,375 Inventory 3,229,406 Current assets 5,628,394 Net fixed assets 3,598,481 Total assets $9,226,875 Liabilities and Equity: Accounts payable $1,384,031 Accruals 899,620 Notes payable 1,937,644 Total current liabilities 4,221,295 Long-term debt 1,776,173 Total liabilities 5,997,469 Common stock ($1 par) 645,881 Retained earnings 2,583,525 Total equity 3,229,406 Total debt and equity $9,226,875 Common dividends $494,505 $329,670 $399,600 $266,400 Addition to retained earnings 1Excludes depreciation and amortization $1,318,125 856,781 1,845,375 4,020,281 1,691,594 5,711,875 615,125 2,460,500 3,075,625 $8,787,500 Shares outstanding Weighted average cost of capital 645,881 7.98% 615,125 7.30% Ch 06: Assignment - Accounting for Financial Management decimal places. Company Growth and Performance Metrics Using the change in Western G&E's EVA as the decision Percentage criterion, which type of investment recommendation Change should you make to your clients? Metric Year 2 Year 1 Sales 10.00% General Metrics $10,175,000 5824,175 $1,180,300 $3,344,743 O A buy recommendation A hold recommendation O A sell recommendation Net income 23.75% $9,250,000 $666,000 $989,750 $3,185,469 19.25% 5.00% Which of the following statements are correct? Check all that apply. 18.15% Net cash flow (NCF) Net operating working capital (NOWC) Earnings per share (EPS) Dividends per share (DPS) Book value per share (BVPS) Cash flow per share (CFPS) Market price per share $1.28 $0.77 $1.08 $0.62 $5.00 24.46% $5.00 0.00% 13.66% 10.03% 15.53% Market value of equity Book value of equity Market Value Added (MVA) 5.00% $21.73 $19.75 MVA Calculation $14,034,994 $12,148,719 $3,229,406 $3,075,625 $9,073,094 EVA Calculation $1,007,325 $804,750 $5,005,580 $4,767,219 7.98% 7.30% X For any given year, one way to compute Western G&E's EVA is as the difference between its NOPAT (such as $804,750) and the product of its operating capital ($6,612,594) and its weighted average cost of capital ($7.30). The percentage change in Western G&E's MVA indicates that its management has increased the firm's value. An increase in the number of common shares outstanding must increase the market value of the firm's equity. The percentage change in Western G&E's EVA indicates that management has increased its value. Western G&E's NCF is calculated by adding its annual interest expense to the corresponding year's net income. 25.17% 5.00% Net operating profit after-tax (NOPAT) Investor-supplied operating capital Weighted average cost of capital Dollar cost of capital Return on invested capital (ROIC) Economic Value Added (EVA) 14.78% 19.23% $453,393
