What are the THREE key activities of the finance manager? Explain.

 

 The following table shows the income statement of TV Summit Corporation for the year ended 31 Dec 20X2.

 (i) Calculate the three profit margins (to 2 decimal places) for the year 20X2.

 

 Based on your answers  perform a time-series analysis on the firm's performance over the three years. Your answer should include any possible change in the firm's expenses that might have resulted in the trend.

 

DPA Private Limited is a firm with $200,000 equity capital and $250,000 debt capital. It is considering an opportunity that will provide a net operating profit after-tax (NOPAT) of $70,000. The corporate tax rate is 30%. Assume the firm's after-tax weighted average cost of capital (WACC) is 18%.

 

(i) What is the total dollar amount of funds (capital) employed by the firm?

 

(ii) Calculate the firm's Economic Value Added (EVA) and explain if the firm should accept or reject this investment opportunity.

 

Financial ratio analysis is useful for evaluating a company's performance over time and against its competitors. 

However, there are also limitations that we must be aware of when using ratio analysis. Discuss TWO  such limitations.

TV Summit Corporation Income Statement For the Year Ended 31 Dec 20X2 Sales Less: Cost of Goods Sold Gross Profit Less: Operating Expenses Operating Profits Less Interest Expenses Profit before Taxes Less Taxes (20%) Profit After Taxes $('000) 286.8 194.4 92.4 64.2 28.2 6.2 22.0 4.4 17.6