I only added the last photo for EVA and the final words of the last statement to the right. Thank you!
Company Growth and Performance Metrics Using the change in Extensive's EVA as the decision criterion, which type of investment recommendation should you make to your clients? Metric Percentage Change Year 1 Year 2 General Metrics $5,750,000 $465,750 O O $5,000,000 $360,000 $535,000 A buy recommendation A hold recommendation A sell recommendation $2,066,250 D Sales Net income 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 $1.08 $0.70 $5.00 0.00% 3.73% $19.75 $21.23 MVA Calculation 28.99% Market value of equity Book value of equity Market Value Added (MVA) Which of the following statements are correct? Check all that apply. For any given year, one way to compute Extensive's EVA is as the difference between its NOPAT (such as $435,000) and the product of its operating capital ($3,574,375) and its weighted average cost of capital ($7.30). O Extensive's NCF is calculated by adding its annual depreciation and amortization expense to the corresponding year's EBITDA. The percentage change in Extensive's EVA indicates that management has increased its value. Investor-supplied operating capital is recorded as accounts payable, accruals, and short-term investments. Extensive's net income is growing at a rate greater than its sales. This could imply that either $1,995,000 5 $1,662,500 $4,904,375 EVA Calculation $569,250 20.00% Net operating profit after-tax (NOPAT) Investor-supplied operating capital Weighted average cost of capital Dollar cost of capital 7.98% 7.30% 31.18% $,000,000 $360,000 $535,000 U O A nolu recommendation A sell recommendation D Which of the following statements are correct? Check all that apply. $1.08 $5.00 0.00% 3.73% $19.75 CIT0.70315TTILACCOUNTS IUI Tallal viallageren Sales $3,750,000 Net income $465,750 Net cash flow (NCF) Net operating working capital (NOWC) $2,066,250 Earnings per share (EPS) Dividends per share (DPS) $0.70 Book value per share (BVPS) Cash flow per share (CFPS) Market price per share $21.23 MVA Calculation Market value of equity Book value of equity $1,995,000 Market Value Added (MVA) EVA Calculation Net operating profit after-tax (NOPAT) $569,250 Investor-supplied operating capital C D Weighted average cost of capital 7.98% Dollar cost of capital Return on invested capital (ROIC) Economic Value Added (EVA) $226,901 O 28.99% $1,662,500 $4,904,375 For any given year, one way to compute Extensive's EVA is as the difference between its NOPAT (such as $435,000) and the product of its operating capital ($3,574,375) and its weighted average cost of capital ($7.30) Extensive's NCF is calculated by adding its annual depreciation and amortization expense to the corresponding year's EBITDA. The percentage change in Extensive's EVA indicates that management has increased its value. Investor-supplied operating capital is recorded as accounts payable, accruals, and short-term investments. Extensive's net income is growing at a rate greater than its sales. This could imply that either its revenues are growing more quickly than its expenses or that management is being effective in managing its costs while achieving the reported growth in sales. Other things remaining constant, either event should increase the value of the firm. 20.00% 7.30% 31.18% 9.04% Company Growth and Performance Metrics Using the change in Extensive's EVA as the decision criterion, which type of investment recommendation should you make to your clients? Metric Percentage Change Year 1 Year 2 General Metrics $5,750,000 $465,750 O O $5,000,000 $360,000 $535,000 A buy recommendation A hold recommendation A sell recommendation $2,066,250 D Sales Net income 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 $1.08 $0.70 $5.00 0.00% 3.73% $19.75 $21.23 MVA Calculation 28.99% Market value of equity Book value of equity Market Value Added (MVA) Which of the following statements are correct? Check all that apply. For any given year, one way to compute Extensive's EVA is as the difference between its NOPAT (such as $435,000) and the product of its operating capital ($3,574,375) and its weighted average cost of capital ($7.30). O Extensive's NCF is calculated by adding its annual depreciation and amortization expense to the corresponding year's EBITDA. The percentage change in Extensive's EVA indicates that management has increased its value. Investor-supplied operating capital is recorded as accounts payable, accruals, and short-term investments. Extensive's net income is growing at a rate greater than its sales. This could imply that either $1,995,000 5 $1,662,500 $4,904,375 EVA Calculation $569,250 20.00% Net operating profit after-tax (NOPAT) Investor-supplied operating capital Weighted average cost of capital Dollar cost of capital 7.98% 7.30% 31.18% $,000,000 $360,000 $535,000 U O A nolu recommendation A sell recommendation D Which of the following statements are correct? Check all that apply. $1.08 $5.00 0.00% 3.73% $19.75 CIT0.70315TTILACCOUNTS IUI Tallal viallageren Sales $3,750,000 Net income $465,750 Net cash flow (NCF) Net operating working capital (NOWC) $2,066,250 Earnings per share (EPS) Dividends per share (DPS) $0.70 Book value per share (BVPS) Cash flow per share (CFPS) Market price per share $21.23 MVA Calculation Market value of equity Book value of equity $1,995,000 Market Value Added (MVA) EVA Calculation Net operating profit after-tax (NOPAT) $569,250 Investor-supplied operating capital C D Weighted average cost of capital 7.98% Dollar cost of capital Return on invested capital (ROIC) Economic Value Added (EVA) $226,901 O 28.99% $1,662,500 $4,904,375 For any given year, one way to compute Extensive's EVA is as the difference between its NOPAT (such as $435,000) and the product of its operating capital ($3,574,375) and its weighted average cost of capital ($7.30) Extensive's NCF is calculated by adding its annual depreciation and amortization expense to the corresponding year's EBITDA. The percentage change in Extensive's EVA indicates that management has increased its value. Investor-supplied operating capital is recorded as accounts payable, accruals, and short-term investments. Extensive's net income is growing at a rate greater than its sales. This could imply that either its revenues are growing more quickly than its expenses or that management is being effective in managing its costs while achieving the reported growth in sales. Other things remaining constant, either event should increase the value of the firm. 20.00% 7.30% 31.18% 9.04%
