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MABALANCE CO.
Balance Sheet
Year 2014 & 2013
Cash
Accounts Receivable
Inventories
Prepaid Expenses
Total Current
Assets
Fixed Assets, at
cost
Accumulated
Depreciation
Net Fixed Assets
Total Assets
Accounts Payable
Notes Payable
Accruals
Interest Payable
Dividends Payable
Total Current
Liabilities
Long Term debt
Common Stock
Retained Earnings
Total Equity
Total Liabilities
and Equity
2014
4,076,59
0
7,456,80
7
1,328,06
0
278,500
13,139,9
57
12,354,0
00
6,078,65
0
6,275,35
0
19,415,3
07
2013
4,265,08
7
6,358,01
3
1,290,76
1
240,700
12,154,5
61
11,850,0
00
5,654,30
0
6,195,70
0
18,350,2
61
4,287,95
0
500,000
143,009
75,400
305,816
5,312,17
5
6,000,00
0
7,000,00
0
1,103,13
2
8,103,13
2
19,415,3
07
4,124,56
9
600,000
168,003
48,600
495,100
5,436,27
2
5,000,00
0
7,500,00
0
413,989
7,913,98
9
18,350,2
61
MABALANCE CO.
Income Statement
Year 2014 & 2013
Sales
COGS
Gross Profit
Other Expenses
EBITDA
Dep. & Amort.
EBIT
Interest
2014
10,785,30
0
5,330,988
5,454,312
2,086,521
3,367,791
424,350
2,943,441
203,456
2013
9,749,870
4,765,440
4,984,430
2,100,488
2,883,942
592,500
2,291,442
180,345
Expense
EBT
Taxes
Net Income
2,739,985
1,095,994
1,643,991
2,111,097
844,439
1,266,658
MABALANCE CO.
Cash Flow Statement
Year 2014
NI
Dep.
Interest Ex
Inc. in AR
Inc. in Inv.
Inc. in Pre
Inc. in AP
Dec. in Accrual
Operating CF
1,643,991
424,350
203,456
(1,098,794)
(37,299)
(37,800)
163,381
(24,994)
1,236,291
(504,000)
Financing
Interest Paid
(176,656)
Dividends Paid
(1,144,132)
Payment of NP
(100,000)
Issuance of LTD
1,000,000
Purchase of Treasury
(500,000)
Financing
(920,788)
Net Increase
(188,497)
Cash, beg.
4,265,087
Cash, end
4,076,590
Supporting Schedules/Computation:
Int.
Pay, be
Int. Ex
Interest
end
Interest
Paid
48,600
RE, beg.
NI
Declared
413,989
1,643,99
1
1,103,13
2
954,848
Div. Pay
Declared
Div, End
Div.
Paid
495,100
954,848
305,816
1,144,13
2
RE, end
203,456
75,400
176,656
SEATWORK #2 ANSWER
5.
Total investor - supplied
operating capital02
= P900,000,000 + P576,000,000 = P1,476,000,000.
6.
NOWC01 = Current assets - Non-interest charging current liabilities
= P1,080,000,000 - P450,000,000 = P630,000,000.
Total investor-supplied
operating capital01
FCF02
7. Looking back at the income statement, we realize that the depreciation and amortization
expense can be found as the difference between EBITDA and EBIT.
Therefore, we need to
break down NOPAT to determine EBIT:
NOPAT
P7,800,000
P7,800,000
P13,000,000
=
=
=
=
EBIT(1 - T)
EBIT(1 - 0.4)
EBIT(0.6)
EBIT.
Now that we have EBIT, we can find the depreciation and amortization expense by
subtracting EBIT from EBITDA, which is given in the problem.
EBITDA
Depr. & Amort.
EBIT
P15,500,000
- ?????????
P13,000,000
Taxes
EBIT
Int
EBT
P13,000,000
-??????????
NI
P 3,800,000
NI = EBT(1 - T)
P3,800,000 = EBT(0.6)
P6,333,333 = EBT.
Interest expense simply becomes the difference between EBIT and EBT.
EBIT Int = EBT
P13,000,000 Int = P6,333,333
P6,666,667 = Int.
So, interest expense is P6.67 million.
9. Remember, free cash flow (FCF) can be calculated as after-tax operating income less net
capital expenditures. Therefore,
FCF
FCF
FCF
FCF
=
=
=
=
10. Recall, EVA is after-tax operating income less the after-tax capital costs.
EVA = EBIT(1 - T) AT capital costs
EVA = P7,800,000 - P5,900,000
EVA = P1,900,000.