The corporate tax rate is 40%.

The following financial statement and reports were made available by the finance department for analysis:

Computron's Income Statement
	2019	2020
Net sales	2,059,200	3,500,640
Cost of Goods Sold	1,718,400	2,988,000
Other Expenses	204,000	432,000
Depreciation and amortization	11,340	70,176
Total Operating Costs	1,933,740	3,490,176
Earnings before interest and taxes (EBIT)	125,460	10,464
Less interest	37,500	105,600
Pre-tax earnings	87,960	(95,136)
Taxes (40%)	35,184	(38,054)
Net Income	52,776	(57,082)
Computron's Balance Sheet
Assets
Cash and equivalents	5,400	4,369
Short-term investments	29,160	12,000
Accounts receivable	210,720	379,296
Inventories	429,120	772,416

Total current assets	674,400	1,168,081
Gross fixed assets	294,600	721,770
Less: Accumulated depreciation	87,720	157,896
Net plant and equipment	206,880	563,874
Total assets	881,280	1,731,955
Liabilities and equity
Accounts payable	87,360	194,400
Notes payable	120,000	432,000
Accruals	81,600	170,976
Total current liabilities	288,960	797,376
Long-term bonds	194,059	600,000
Common Stock	276,000	276,000
Retained Earnings	122,261	58,579
Total Equity	398,261	334,579
Total Liabilities and Equity	881,280	1,731,955

1. Explain to the chairman of the board three properties of future cashflows that would likely help increase Computron's value.
2. What is Computron's net operating profit after taxes (NOPAT) for 2020?
3. Calculate Computron's free cash flow for 2020 if net investment in total operating capital is $671,419.
4. Explain to the chairman of the board five uses of free cash flow to help maximize the value of the firm.
5. Explain Economic Value Added (EVA) and compute Computron's EVA for 2020 if total net operating capital is $1,354,579? The company's weighted average cost of capital (WACC) is 10.0%.
6. Calculate the following profitability ratios for Computron in 2020:
7. 1. Operating profit margin
   2. Return on assets (ROA)
   3. Return on equity (ROE)
   4. Basic Earning Power (BEP)
8. Calculate the following asset management ratios for Computron in 2020:
   1. total assets turnover
   2. Days sales outstanding (DSO)
9. Calculate the following liquidity and debt management ratios for Computron in 2020:
   1. Current ratio
   2. Quick ratio
   3. Debt-to-assets ratio
   4. Times-interest earned ratio