Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Quantitative Problem: Rosnan Industries' 2019 and 2018 balance sheets and income statements are shown below. Balance Sheets 2019 2018 Assets Cash and equivalents $80 $65

Quantitative Problem: Rosnan Industries' 2019 and 2018 balance sheets and income statements are shown below.

Balance Sheets
2019 2018
Assets
Cash and equivalents $80 $65
Accounts receivable 275 300
Inventories 375 250
Total current assets $730 $615
Net plant and equipment 2,300 1,490
Total assets $3,030 $2,105
Liabilities and Equity
Accounts payable $150 $85
Accruals 75 50
Notes payable 130 55
Total current liabilities $355 $190
Long-term debt 450 290
Common stock 1,225 1,225
Retained earnings 1,000 400
Total liabilities and equity $3,030 $2,105

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)?

$

What is Rosnan's 2019 net working capital (NWC)?

$

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Entrepreneurial Financial Management An Applied Approach

Authors: Jeffrey R Cornwall, David O Vang, Jean M Hartman

5th Edition

0367335417, 978-0367335410

More Books

Students also viewed these Finance questions