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Sneaker Inc. has come to your financial firm for counsel. Their tax rate is 40%. Income Statement Cost of Goods Sold 300 Interest Expense 30

Sneaker Inc. has come to your financial firm for counsel. Their tax rate is 40%. Income Statement

Cost of Goods Sold

300

Interest Expense

30

Operating Expense (excluding depreciation)

115

Sales

610

Tax

___

Balance Sheet

Accounts Payable

35

Accounts Receivable

65

Accruals

30

Accumulated Depreciation

(175)

Cash

35

Common Stock

120

Fixed Assets (gross)

390

Inventory

135

Long Term Debt

200

Retained Earnings

65

1. What was Sneaker Inc.'s earnings before interest & tax (EBIT)?

a. $185
b. $195
c. $160
d. $215
e. $120

2. Sneaker Inc.'s tax liability?

a. $48
b. $60
c. $55
d. $62
e. $66

3. Sneaker Inc. Net Income?

a. $72
b. $83
c. $99
d. $93
e. $76

4. Sneaker Inc. Total Current Assets?

a. $450
b. $240
c. $625
d. $235
e. $490

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