Management
MSFI 401 OrientationAccountingSample ProblemsA company’s most recent annual income statement had the following selected information:Sales $1,000Selling, general and administrative $200No interestA 50% tax rateCost of good sold of $400Depreciation (broken out separately) of $100No other expensesWhat was the company’s net income?A company sold $40,000 of products during the year to customers on credit. During the year, customers paid $32,000 of their accounts receivable. At the end of the year, accounts receivable were $12,000. What were accounts receivable at the beginning of the year?A company had sales of $25 million in 2014, operating income of $10 million and net income of $5 million. At the beginning of the year, it had $25 million of assets and $15 million of liabilities. If it paid $2 million in dividends and no new shares were issued or repurchased, what was the company’s ending shareholders’ equity?Use the same company and same income statement in problem 1, along with the following information:Changes in working capital required (operating) were an increase of $100Capital expenditures of $50Acquisitions of $150 (which it made on the last few days of the year)On the last few days of the year, it borrowed $75 to partially pay for the acquisitionDividends of $20
What was EBITDA for this year?What was Free Cash Flow for this year?What was the Change in Cash on the Balance Sheet for this year?During 2014, a company had capital expenditures of $200. Its beginning net fixed assets (or net plant, property & equipment) was $1,000. Its ending net fixed assets were $1,100. What was the company’s depreciation during the year, assuming it didn’t sell any assets?A company had the following balance sheet at the end of the year:Cash $145A/R 155Inventories 150Prepaid exp. 20Current assets 470Net PP&E 500Assets 970Bank debt 100A/P 200Wages payable 50Taxes payable 75Current liabilities 425Long-term debt 245Liabilities 670Shareholders equity 300Liabilities and 970 Shareholders equityWhat was the company’s working capital required (net operating working capital) at the end of the year?