Question

1. You standardize a company’s financial statements as follows. Following the example of Bega Cheese in the textbook, please calculate the following items:

            a. NOPAT

            b. Net operating working capital

c. Net long-term assets

            d. Net debt

BALANCE SHEET
ASSETS			INCOME STATEMENT
Cash and Marketable Securities	11,511.00
Accounts Receivable	4,430.00		Sales	35,200.00
Inventory	2,650.00		Cost of Goods Sold	11,234.00
Other Current Assets	2,988.00		Gross Profit	23,966.00
Total Current Assets	21,579.00		SG&A	13,179.00
			Other Operating Expenses	1,703.00
Long-Term Tangible Assets	16,672.00		Operating Income	9,084.00
Long-Term Intangible Assets	26,909.00		Investment Income	0.00
Other Long-Term Assets	7,663.00		Other Income, net of Other Expense	4,425.00
Total Long-Term Assets	51,244.00		Other Income	5,312.00
Total Assets	72,823.00		Other Expense	887.00
			Net Interest Expense (Income)	291.00
LIABILITIES			Interest Income	317.00
Accounts Payable	1,887.00		Interest Expense	608.00
Short-Term Debt	9,376.00		Non-controlling interests	50.00
Other Current Liabilities	7,245.00		Pretax Income	13,168.00
Total Current Liabilities	18,508.00		Tax Expense	2,384.00
			Unusual Gains, Net of Unusual Losses	1,025.00
Long Term Debt	14,041.00		Net Income	11,809.00
Deferred Taxes	4,163.00		Preferred Dividends	0.00
Other Long-Term Liabilities	4,794.00		Net Income to Common	11,809.00
Total Long-Term Liabilities	22,998.00
Total Liabilities	41,506.00
SHAREHOLDERS' EQUITY
Non-controlling interests	314.00
Preferred Stock	0.00
Common Shareholder's Equity	31,003.00
Total Shareholder's Equity	31,003.00
TOTAL LIABILITIES & EQUITY	72,823.00

         

Answer 1

a. NOPAT = Operating Income - Tax Expenses

= $9,084 - 18.10% of ($9,084)

= $9,084 - 1,644.20

= $7,439.80

Tax % = (2,384 / 13,168) x 100

= 18.10%

b. Net operating working capital = Cash + Account Receivables + Inventory - Account Payable - Short Tern Debt

= 11,511.00 + 4,430.00 + 2,650.00 - 1,887.00 - 9,376.00

= $ 7,328

c. Net long-term assets = Total Fixed Assets - Accumulated

= 16,672.00 + 26,909.00 - 0

= $43,581

d. Net debt = Short Term Debt + Long Term Debt - Cash & Cash Equivalents

= 9,376.00 + 14,041.00 - 11,511.00

= $11,906