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Quantitative Problem: Rosnan Industries' 2019 and 2018 balance sheets and income statements are shown below. Balance Sheets 2019 2018 Assets Cash and equivalents $120 $105
Quantitative Problem: Rosnan Industries' 2019 and 2018 balance sheets and income statements are shown below.
Balance Sheets | |||
2019 | 2018 | ||
Assets | |||
Cash and equivalents | $120 | $105 | |
Accounts receivable | 275 | 300 | |
Inventories | 375 | 250 | |
Total current assets | $770 | $655 | |
Net plant and equipment | 2,300 | 1,490 | |
Total assets | $3,070 | $2,145 | |
Liabilities and Equity | |||
Accounts payable | $150 | $85 | |
Accruals | 75 | 50 | |
Notes payable | 170 | 95 | |
Total current liabilities | $395 | $230 | |
Long-term debt | 450 | 290 | |
Common stock | 1,225 | 1,225 | |
Retained earnings | 1,000 | 400 | |
Total liabilities and equity | $3,070 | $2,145 |
Income Statements | |||
2019 | 2018 | ||
Sales | $2,285 | $1,585 | |
Operating costs excluding depreciation | 1,250 | 1,000 | |
EBITDA | $1,035 | $585 | |
Depreciation and amortization | 100 | 75 | |
EBIT | $935 | $510 | |
Interest | 63 | 46 | |
EBT | $872 | $464 | |
Taxes (25%) | 218 | 116 | |
Net income | $654 | $348 | |
Dividends paid | $54 | $48 | |
Addition to retained earnings | $600 | $300 | |
Shares outstanding | 100 | 100 | |
Price | $25.00 | $22.50 | |
WACC | 10.00% |
The balance in the firm's cash and equivalents account is needed for operations and is not considered "excess" cash.
What is Rosnan's 2019 net operating working capital (NOWC)?
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What is Rosnan's 2019 net working capital (NWC)?
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