Module-3: Problem Solving Gi Saved 2 Net income $ 73. 47 BALANCE SHEET (Figures in $ millions) 10 End of Start of points Year Year Assets Current assets $ 371 316 X 04:02:38 Long-term assets 262 224 Total assets $ 633 $ 540 Liabilities and shareholders' equity Current liabilities $ 196 159 Long-term debt 110 123 eBook Shareholders' equity 327 258 Total liabilities and shareholders' equity $ 633 $ 540 Print The company's cost of capital is 8.5%. Required: References a. Calculate Watervan's economic value added (EVA). Note: Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places. b. What is the company's return on capital? (Use start-of-year rather than average capital.) Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. c. What is its return on equity? (Use start-of-year rather than average equity.) Note: Enter your answer as a percent rounded to 2 decimal places. d. Is the company creating value for its shareholders? a. Economic value added million b. Return on capital % c. Return on equity d. Is the company creating value for its shareholders?3 Here are simplified financial statements for Phone Corporation in 2020: INCOME STATEMENT 10 (Figures in $ millions) points Net sales $ 12, 400 Cost of goods sold 3, 660 Other expenses X 04:02-22 4,137 Depreciation 2, 278 Earnings before interest and taxes (EBIT) $ 2, 325 Interest expense 645 Income before tax $ 1,680 Taxes (at 21%) 353 Book Net income $ 1, 327 Dividends $ 796 Print BALANCE SHEET (Figures in $ millions) End of Year Start of Year Assets References Cash and marketable securities 6 81 $ 156 Receivables 982 2. 330 Inventories 147 198 Other current assets 827 892 Total current assets $ 3, 037 $ 3,570 Net property, plant, and equipment 19, 893 19, 835 Other long-term assets 4, 136 3, 690 Total assets $ 27, 066 $ 27, 095 Liabilities and shareholders' equity Payables $ 2,484 2, 960 Short-term debt 1, 379 1, 533 Other current liabilities 771 747 Total current liabilities 4, 634 5, 240 Long-term debt and leases 9 , 010 8, 265 Other long-term liabilities 6,098 6,069 Shareholders' equity 7, 324 7,521 Total liabilities and shareholders' equity $ 27, 066 $ 27 ,095 Calculate the following financial ratios for Phone Corporation: Note: Use 365 days in a year. Do not round intermediate calculations. Round your final answers to 2 decimal places. a. Return on equity (use average balance sheet figures) % b. Return on assets (use average balance sheet figures) % C. Return on capital (use average balance sheet figures) % d. Days in inventory (use start-of-year balance sheet figures) days e. Inventory turnover (use start-of-year balance sheet figures) f. Average collection period (use start-of-year balance sheet figures) days g. Operating profit margin % h. Long-term debt ratio (use end of-year balance sheet figures) L. Total debt ratio (use end of-year balance sheet figures) j- Times interest earned k. Cash coverage ratio 1. Current ratio (use end of-year balance sheet figures)A Chik's Chickens has accounts receivable of $6,133. Sales for the year were $9,600. What is its average collection period? Note: Use 365 days in a year. Do not round intermediate calculations. Round your final answer to the nearest whole number. 10 points Average collection period days 04:02:09 eBook Print5 Salad Daze maintains an inventory of produce worth $500. Its total bill for produce over the course of the year was $74,000. How old on average is the lettuce it serves its customers? Note: Use 365 days in a year. Do not round intermediate calculations. Round your answer to 2 decimal places. 10 points Average days 8 04:02:03 eBook Print6 In the past year, TVG had revenues of $3.01 million, cost of goods sold of $2 51 million, and depreciation expense of $154,580. The firm has a single issue of debt outstanding with book value of $1.01 million on which it pays an interest rate of 9%. What is the firm's times interest earned ratio? 10 Note: Do not round intermediate calculations. Round your answer to 2 decimal places. points Times Interest earned 8 040159 sBookLever Age pays an 10% rate of interest on $9.90 million of outstanding debt with face value $9.9 million. The firm's EBIT was $2.1 million. 10 a. What is its times interest earned? points Note: Round your answer to 2 decimal places. b. If depreciation is $190,000, what is its cash coverage ratio? 8 04:01:52 Note: Round your answer to 2 decimal places. a. Times interest earned b. Cash coverage ratio ebook Hintring saved 8 Assume a firm's inventory level of $15,000 represents 40 days' sales Required: 10 points a. What is the annual cost of goods sold? Note: Use 365 days in a year. Do not round intermediate calculations. Round your answer to whole number. 8 04:01:40 b. What is the inventory turnover ratio? Note: Round your answer to 2 decimal places. a. Annual cost of goods sold eBook b. Inventory turnover ratio times per year PrintSaved 9 A firm has a long-term debt-equity ratio of 0.4. Shareholders' equity is $0.98 million. Current assets are $320,000, and the current ratio is 2.0. The only current liabilities are notes payable. What is the total debt ratio? Note: Round your answer to 2 decimal places. 10 points Total debt ratio 8 04:01:32 eBookSaved 10 A firm has a debt-to-equity ratio of 0.85 and a market-to-book ratio of 2.5. What is the ratio of the book value of debt to the market value of equity? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. 10 points Book debt-to-market equity ratio 8 04:01:09