Problem 1

Fill in the income statement

Calculate NOPAT

Calculate GPM, Operating Margin, NPM, ROA, ROE, ROIC, Economic Value Added

Interpret the ROIC

Income statement

Sales revenue $1,200,000

Cost of goods sold (COGS) $730,000

Depreciation & amortization $70,000

Operating expenses $120,000

Interest expense $70,000

Tax paid $63,000

Net income $147,000

Balance Sheet Items

Book value of equity = $1,000,000

Book value of assets = $1,500,000

Invested Capital = $1,300,000

Other Data:

WACC = 12%