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need it as soon as possible Here are simplified financial statements for Watervan Corporation: INCOME STATEMENT $883.00 743.00 (Figures in $ millions) Net sales Cost
need it as soon as possible
Here are simplified financial statements for Watervan Corporation: INCOME STATEMENT $883.00 743.00 (Figures in $ millions) Net sales Cost of goods sold Depreciation Earnings before interest and taxes (EBIT) Interest expense Income before tax 33.00 $107.00 14.00 $ 93.00 19.53 Taxes Net income $ 73.47 BALANCE SHEET (Figures in $ millions) End of Start of Year Year Assets Current assets $ 371 $ 316 Long-term assets 262 224 Total assets $ 633 $ 540 $ 196 $ 159 110 123 Liabilities and shareholders' equity Current liabilities Long-term debt Shareholders' equity Total liabilities and shareholders' equity 327 258 $ 633 $ 540 The company's cost of capital is 8.5%. a. Calculate Watervan's economic value added (EVA). (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) b. What is the company's return on capital? (Use start-of-year rather than average capital.) (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) c. What is its return on equity? (Use start-of-year rather than average equity.) (Enter your answer as a percent rounded to 2 decimal places.) d. Is the company creating value for its shareholders? a. Economic value added million b. % Return on capital Return on equity c. % d. Is the company creating value for its shareholdersStep by Step Solution
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