I need help with question (b) of how to calculate it
For the Year El 2017 2017 Assets 2016 2016 431,000 Sales 3,074,000 2,567,000 Cash 339,000 Cost of Goods Sold 2,088,000 1,711,000 Accounts Receivable 503,000 365,000 Gross Profit 986,000 856,000 Inventories 289,000 300,000 Selling and G&A 294,000 295,000 Total Current Assets 1,223,000 1,004,000 Expenses Fixed Expenses 35,000 35,000 Gross Fixed Assets 4,669,000 4,322,000 Depreciation Expense 239,000 223,000 Accumulated Depreciation 2,295,000 2,056,000 EBIT 418,000 303,000 Net Fixed Assets 2,374,000 2,266,000 Interest Expense 93,000 91,000 Total Assets 3,597,000 3,270,000 Earnings Before Taxes 325,000 212,000 Liabilities and Owners' Equity Taxes 94,000 64,000 Accounts Payable 382,000 270,000 Net Income 231,000 148,000 Short-term Notes Payable 79,000 99,000 Accrued Expenses 159,000 114,000 Total Current Liabilities 620,000 483.000 Long-term Debt 1,023,000 967,000 Total Liabilities 1,643,000 1,450,000 Common Stock 819,000 808,000 Retained Earnings 1,135,000 1,012,000 Total Shareholder's Equity 1,954,000 1,820,000 Total Liabilities and Owners' 3,597,000 3,270,000 Equity a) Using the Altman's model for privately held firms and public ones, calculate the Z-score for Sweet Dreams Corp. Assume that the market value of Sweet Dreams Corp. is $1,200,000. b) Calculate Sweet Dreams Corp.'s economic profit for these years and compare it to net income. Assume that the weighted average cost of capital is 12%. For the Year El 2017 2017 Assets 2016 2016 431,000 Sales 3,074,000 2,567,000 Cash 339,000 Cost of Goods Sold 2,088,000 1,711,000 Accounts Receivable 503,000 365,000 Gross Profit 986,000 856,000 Inventories 289,000 300,000 Selling and G&A 294,000 295,000 Total Current Assets 1,223,000 1,004,000 Expenses Fixed Expenses 35,000 35,000 Gross Fixed Assets 4,669,000 4,322,000 Depreciation Expense 239,000 223,000 Accumulated Depreciation 2,295,000 2,056,000 EBIT 418,000 303,000 Net Fixed Assets 2,374,000 2,266,000 Interest Expense 93,000 91,000 Total Assets 3,597,000 3,270,000 Earnings Before Taxes 325,000 212,000 Liabilities and Owners' Equity Taxes 94,000 64,000 Accounts Payable 382,000 270,000 Net Income 231,000 148,000 Short-term Notes Payable 79,000 99,000 Accrued Expenses 159,000 114,000 Total Current Liabilities 620,000 483.000 Long-term Debt 1,023,000 967,000 Total Liabilities 1,643,000 1,450,000 Common Stock 819,000 808,000 Retained Earnings 1,135,000 1,012,000 Total Shareholder's Equity 1,954,000 1,820,000 Total Liabilities and Owners' 3,597,000 3,270,000 Equity a) Using the Altman's model for privately held firms and public ones, calculate the Z-score for Sweet Dreams Corp. Assume that the market value of Sweet Dreams Corp. is $1,200,000. b) Calculate Sweet Dreams Corp.'s economic profit for these years and compare it to net income. Assume that the weighted average cost of capital is 12%
