Question

JCJ Inc. has (NI/EBT ) =  .25

JCJ Inc. has (EBT/EBIT ) =  1

JCJ Inc. has (EBIT/SALES ) =  .80

JCJ Inc. has  an equity multiplier of  3

JCJ Inc. has  a total asset turnover ratio of 1.5

Sales are $500,000

A.) If JCJ Inc. has sales of $100,000, what is JCJ’s Net Income?

1. $100,000
2. $25,000
3. $80,000
4. $20,000
5. None of the above

  

B.) What was JCJ’s interest expense for the year? If there is not enough information, please let me know.

1. $0
2. $20,000
3. $16,000
4. $4,000
5. None of the above

C.) What was JCJ’s operating expenses?  If there is not enough information, please let me know.

1. $100,000

2. $25,000
3. $80,000
4. $20,000
5. None of the above

Answer 1

A)	EBIT / Sales	=	0.8
	EBIT / $ 100000	=	0.8
	EBIT	=	$ 80,000.00
	EBT / EBIT	=	1
	EBT / $ 80000	=	1
	EBT	=	$ 80,000.00
	NI / EBT	=	0.25
	NI / $ 80000	=	0.25
	NI	=	$ 20,000.00
	Answer:	D

B)	Since EBT / EBIT		=	1
	We can say that interest expense is 0
	Answer:	A

C)	EBIT / Sales		=	0.8
	EBIT / $ 500000		=	0.8
	EBIT		=	$ 4,00,000.00
	Operating Expense		=	Sales - EBIT
			=	$ 500000 - $ 400000
			=	$ 1,00,000.00
	Answer:	A