inancial statements

Include the procedure and briefly explain each result.

1. Income Statement

At the end of last year, King Power Company achieved $6 million in revenues (EBITDA). Depreciation expense was $1.2 million, interest expense expense was $800,000, and the corporate tax rate was 35%. At the end of the fiscal year, the company had current assets totaling $12 million, $4 million in accounts payable, $1.5 million in accrued debt, $1.3 million in other debt payable, and $8 million in property, plant and equipment. Assume King Power has no excess cash, uses debt and equity to finance its operations, has no current liabilities, and recognizes depreciation periodically. a. Determine the net income or loss of the business. Explain how this result can help the manager in making decisions in the company. b. Calculate net working and operating capital. Explain the difference between the two results. c. If the company had $6 million in property, plant, and equipment last year and net operating working capital remained constant, what is the company's free cash flow? Explain how the cash flow output helps managers in the financial planning process.

2. Status

The assets of the company River & Stone Corp. include current assets, property, plant and equipment and it does not have excess cash (Free Cash). It has assets valued at $4 million and its fixed assets are valued at $3 million. It reports debts payable of $350,000, long-term debt of $650,000, and stockholders' equity of $2 million. Your balance sheet reflects that you have accounts payable and accumulated debts. Generally, the company operates on a debt and equity basis. a. Determine the total amount of the company's debt. b. Calculate the balance of current assets and liabilities. c. Determine the net working capital of the company. d. Calculate net operating working capital. and. Explain how net working capital and operating working capital can support management decisions and strategic goals.

3. Financial statements, cash flow and taxes

The balance sheets at the end of 2018 and 2019 of Kairos Industries are shown below:

	2019	2018
Efectivo	$102,950	$89,825
Cuentas por cobrar	103,465	85,627
Inventarios	38, 544	35,082
Total de activos corrientes	244, 959	210, 534
Propiedad, planta y equipo	67,265	42,536
Total de activos	312,224	253,070
Cuentas por pagar	30,861	23,209
Acumulaciones	30,577	22,756
Obligaciones por pagar	16,817	14,317
Total pasivos corrientes	78,255	60,282
Deudas a largo plazo	76,364	64,014
Total de pasivos	154, 619	124,296
Acciones comunes	100,000	90,100
Ganancias retenidas	57,605	38,874
Total de capital contable	157,605	128,974
Total de pasivos ms capital	$312,224	$253,270

1. In 2019, Kairos Industries achieved sales of $330 million and an EBITDA of 17% of sales. Depreciation as amortization of fixed assets was 11% and interest paid was $2 million. On the other hand, the tax rate was 35% and 38% of net income goes to dividends. A statement of income taking into consideration the data presented.
2. The statement of capital for the period ended December 31, 2019.
3. Taking into consideration that Kairos Industries does not have excess cash available, determine the Free Cash Flow and the operating working capital.
4. Explain the effect it would have on the taxes paid by shareholders and the company if Kairos Industries were to increase the rate it pays out dividends.
5. Calculate the economic value added (EVA) and the market value added (MVA) in 2019, considering that the cost of capital after tax is 12% and the share price of Kairos Industries is $20 with 9 million shares On circulation.