5. Analyzing accounting data for managerial decisions A, A3 2 Accounting data are used to analyze cash flows. and this analysis is critical for decision making. Consider the following case: JarH Corp. recently hired Jeffrey. His immediate mandate was to analyze the company. He has to submit a report on the company's operational efficiency and estimate potential investment in working capital. He has the income statement from last year and the following information from the company's financial reports as well as some industry averages. - Last year. JBLH Corp. reported a book value of $800 million in cunent assets. of which 30% is cash. 32% is short-term investments. and the rest is accounts receivable and inventory. - The company reported $630.0 million of current liabilities including accounts payable and accruals. Interestingly. the company had no notes payable claims last year. There were no changes in the accounts payables during the reporting period. - The company. however. invested heavily in plant and equipment to support its operations. It reported a book value of$1.230 million in longtenn assets last year. Income Statement For the Year Ended on December 31 (Million: of dollars} Industry J&H Carp. Average Net sales $3.900 $4.815 Operating costs, except depreciation and amortization 3.120 3,900 Depreciation and amortization 156 195 Total operating costs 3.226 4.095 Operating income (or EBlT) $624- $230 Less: Interest 62 11? Earnings before taxes {EBT) $562 $663 Less: Taxes (40%} 225 265 Net income $33? $398 Based on the information given to Jeffrey. he submits a report on January 1 with some important calculations for management to use. both for analysis and to devise an action plan. Which of the following statements in his report are true? Check all that apply. JarH Corp. has $256.0 million in nonoperating assets. The company is using -$ 136.0 million in net operating working capital acquired by investorsupplied funds. The firm uses $1.144.0 million of total net operating capital to run the business. JarH Corp.'s net operating working capital is $120.0 million. Based on the information on industry averages. other players in the industry would generate higher prots than JarH Corp. if they had no debt and held no financial assets. EIEIEIEIEI