Question
South Sea Baubles has the following (incomplete) balance sheet and income statement. BALANCE SHEET AT END OF YEAR (Figures in $ millions) Assets 2021 2022
South Sea Baubles has the following (incomplete) balance sheet and income statement.
BALANCE SHEET AT END OF YEAR | |||||
(Figures in $ millions) | |||||
Assets | 2021 | 2022 | Liabilities and Shareholders' Equity | 2021 | 2022 |
---|---|---|---|---|---|
Current assets | $ 100 | $ 190 | Current liabilities | $ 70 | $ 90 |
Net fixed assets | 900 | 1,000 | Long-term debt | 650 | 850 |
INCOME STATEMENT, 2022 | |
(Figures in $ millions) | |
Revenue | $ 2,000 |
---|---|
Cost of goods sold | 1,080 |
Depreciation | 400 |
Interest expense | 250 |
a&b. What is shareholders equity in 2021 and 2022? c&d. What is net working capital in 2021 and 2022? e. What are taxes paid in 2022? Assume the firm pays taxes equal to 21% of taxable income. f. What is cash provided by operations during 2022? g. Net fixed assets increased from $900 million to $1,000 million during 2022. What must have been South Seas gross investment in fixed assets during 2022? h. If South Sea reduced its outstanding accounts payable by $45 million during the year, what must have happened to its other current liabilities?
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