Question
Jane Doe is a private company which a management accountant is analyzing its performance. So it is trying to look at different components that are
Jane Doe is a private company which a management accountant is analyzing its performance. So it is trying to look at different components that are distributing to its success. The tests he wants to carry out are the following using the table below:
| Current liabilities | $34500 |
| Notes payable | 65600 |
| Bond payable | 28500 |
| Equity | 190,000 |
| Total Assets | ? |
| Accumulated Depreciation on buildings | $15000 |
| Current Assets | 48,600 |
| Core current asset | 27,800 |
| Non operating assets | $12,000 |
| Tax rate | 25% |
| Net income | $39,500 |
| Research and Development | $28200 |
| Training expenses for employees | $19700 |
| Sales | 56200 |
| Interest on debt | 7000 |
| Government Bond Rate | 3% |
| Market Index in January 2021 | 18765 |
| Market Index in December 2021 | 20,000 |
| Beta | 1.8 |
| Beginning Operating assets | $300,000 |
REQUIRED
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Calculate interest expense, tax and EBIT
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Calculate the total capital employed of the company.
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Calculate weighted average cost of capital.
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What is the EVA of the company?
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Calculate Residual Income.
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Find average Operating assets
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Calculate both methods of ROI
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What are the major advantages of using EVA to evaluate performance?
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Exploring Strategic Change
Authors: Julia Balogun, Veronica Hope Hailey, Stafanie Gustafsson
4th Edition
0273778919, 9780273778912
