In-Class Exercise Chapter 8 1. Excells Corporation financial statements for year 8 and 9 are reproduced below:
Financial Statement analysis Financial Statement analysis Given that the effective tax rates for Excell are 37% in year 8 and 36% in year 9, calculate 1. Return on operating asset (RNOA) for year 9 2. Return on common equity (ROCE) for year 9
Financial Statement analysis Financial Statement analysis Equity Common stock 413,783 9,208 540.901 (201,438)(201.438 772,454 $2.314.492 413,783 2. 19,208 436,752 Below is selected date for ABC Co. Use this information to answer the following questions Retained eamings Treasury stock Total stockholders equity Total liabilities and equity 2006 2005 $4,650 $4.730 668,305 Current assets Long-term assets Current liabilities Long-term debt Common equity 2,120,735 7.120 6.450 1-440 3.830 3.760 6.300 6.080 1.340 Given that the effective tax rates for Excell are 37% in year 8 and 36% in year 9, calculate Operating income Interest expense Tax expense (40%) Net income 2.140 240 760 1.140 1. Return on operating asset (RNOA) for year 9 2. Return on common cquity (ROCE) for year9 Assume all assets are operating assets; all current liabilities are operating liabilities A- Calculate return on net opcration assets for 2006. B- Calculate return on cquity for 2006. 3. Selected ratios from ABC Co. for year 1 and year 2 are presented below; Year Net operating assets common equity Net operating profit margin Income tax rate Revenues average net operating assets EBIT revenues Year 2 1.53 21% 28% 0.61 19% 47% 0.81 38% 32% A- Calculate return on net opcrating assets for Year 1. B- Calculate return on common equity for yearl. Untitled Q Search Financial Statement analysis In-Class Exercise- Chapter8 1. Excell's Corporation financial statements for year 8 and 9 are reproduced below EXCEL, C( PORAJIQy . Income Statements For Years Ended December 31, Year 8 and Year 9 S thousands) Year B Tear 9 1635,298 $1,782,254 1598,679 Cost of goods sold and operating expenses.1,473,293 Operating profit interest ense Pretax profit Tax experse Net incone 163,005 21,825 162,732 58,584 141,180 88,943 104,148 Balance Sheets At December 31, Year 8 and Year 9 s theusands Year 115,397 177,538 Year 9 71,546 Marketable securities Accourts receivable, net Total current assets Investments in unconsoll dated subsidiaries.33,728 Property, plast, and equipment, net 182,859 535,305 2,390 1,633.458 Total long-term assets Total assets $2 120,735 $2.314.492 Accounts payable Texes payeble Current maturities of long-term debt Total curment labilities Long-term debt 7,850 138,662 24,370 0,440 $ 13,734 155,482 13,256 201,322 507,329 216,294 and OPEB Iliabilities 852 237 0tal long-term liabilities 251,108 Financial Statement analysis Financial Statement analysis Equity Common stock 413,783 9,208 540.901 (201,438)(201.438 772,454 $2.314.492 413,783 2. 19,208 436,752 Below is selected date for ABC Co. Use this information to answer the following questions Retained eamings Treasury stock Total stockholders equity Total liabilities and equity 2006 2005 $4,650 $4.730 668,305 Current assets Long-term assets Current liabilities Long-term debt Common equity 2,120,735 7.120 6.450 1-440 3.830 3.760 6.300 6.080 1.340 Given that the effective tax rates for Excell are 37% in year 8 and 36% in year 9, calculate Operating income Interest expense Tax expense (40%) Net income 2.140 240 760 1.140 1. Return on operating asset (RNOA) for year 9 2. Return on common cquity (ROCE) for year9 Assume all assets are operating assets; all current liabilities are operating liabilities A- Calculate return on net opcration assets for 2006. B- Calculate return on cquity for 2006. 3. Selected ratios from ABC Co. for year 1 and year 2 are presented below; Year Net operating assets common equity Net operating profit margin Income tax rate Revenues average net operating assets EBIT revenues Year 2 1.53 21% 28% 0.61 19% 47% 0.81 38% 32% A- Calculate return on net opcrating assets for Year 1. B- Calculate return on common equity for yearl. Untitled Q Search Financial Statement analysis In-Class Exercise- Chapter8 1. Excell's Corporation financial statements for year 8 and 9 are reproduced below EXCEL, C( PORAJIQy . Income Statements For Years Ended December 31, Year 8 and Year 9 S thousands) Year B Tear 9 1635,298 $1,782,254 1598,679 Cost of goods sold and operating expenses.1,473,293 Operating profit interest ense Pretax profit Tax experse Net incone 163,005 21,825 162,732 58,584 141,180 88,943 104,148 Balance Sheets At December 31, Year 8 and Year 9 s theusands Year 115,397 177,538 Year 9 71,546 Marketable securities Accourts receivable, net Total current assets Investments in unconsoll dated subsidiaries.33,728 Property, plast, and equipment, net 182,859 535,305 2,390 1,633.458 Total long-term assets Total assets $2 120,735 $2.314.492 Accounts payable Texes payeble Current maturities of long-term debt Total curment labilities Long-term debt 7,850 138,662 24,370 0,440 $ 13,734 155,482 13,256 201,322 507,329 216,294 and OPEB Iliabilities 852 237 0tal long-term liabilities 251,108
