South Sea Baubles has the following (incomplete) balance sheet and income statement. YEAR-END BALANCE SHEET (Figures in
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South Sea Baubles has the following (incomplete) balance sheet and income statement.
YEAR-END BALANCE SHEET | ||||||||||||||
(Figures in millions of dollars) | ||||||||||||||
assets | 2018 | 2019 | Liabilities and equity | 2018 | 2019 | |||||||||
current assets | $ | 100 | $ | 190 | current liabilities | $ | 70 | $ | 90 | |||||
net fixed assets | 900 | 1.000 | long-term debt | 650 | 850 | |||||||||
INCOME STATEMENT, 2019 | |||
(Figures in millions of dollars) | |||
Revenues | $ | 2.000 | |
cost of goods sold | 1.080 | ||
Depreciation | 400 | ||
interest expense | 250 | ||
a&b. How much is equity in 2018 and 2019?
C&D. What is net working capital in 2018 and 2019?
e. What taxes were paid in 2019? Suppose the firm pays taxes equal to 21% of taxable income.
F. What is the cash provided by operations in 2019?
G. Net fixed assets increased from $900 million to $1,000 million in 2019. How much should the South Sea's gross investment in fixed assets be in 2019?
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0077861629
8th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
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