Question

1. During 2019, company X had sales 263658; costs 142213; depreciation expense 36358; interest expense 11698; tax rate 35 percent.Given this information what is company X net income.

2. During 2019, company X had sales 263658; costs 142213; depreciation expense 36358; interest expense 11698; tax rate 35 percent.Calculate company X operating cash flow.

3.During 2019, company X had sales 263658; costs 142213; depreciation expense 36358; interest expense 11698; tax rate 35 percent.If company X had additions to retained earnings 7597 in 2017. What is the dividend payout ratio? Express your answer as %.

Answer 1

1) Sales = $263,659

Less: costs = ($142,213)

Less: Depreciation expense = (36,358)

EBIT = $85,087

Less: Interest expense = (11,698)

Income before tax = $73,389

Income tax (35%) = ($25,686.15)

Net Income = $47,702.85

2) Operating cash flow

Sales = $263,659

Less: costs = ($142,213)

Less: Depreciation expense = (36,358)

EBIT = $85,087

Less: Interest expense = (11,698)

Income before tax = $73,389

Income tax (35%) = ($25,686.15)

Operating cash flow = $85,087 + $36,358 - $25,686.15

Operating cash flow = $95,758.85.

3) Net Income = $47,702.85

Dividends = $47,702.85 - $7,597 = $40,105

Dividends payout ratio = $40,105 / $47,702.85 = 0.8407

or Dividends payout ratio = 84.07%