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FINANCE 5 FINANCE Finance Name of the university Student ID

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Webster University

   

Added on  2021-10-11

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Answer C EBIT = fr 880,000 Depreciation expenses = fr 150,000 Tax rate = 35% Net income = 880,000 – (880,000 * 0.35) = fr 572,000 Net cash flow = Net income + depreciation Net cash flow = fr 880,000 + fr 150,000 = fr 6.0 million = fr 1030,000 Part B: Analysis of financial statements Answer 1 Calculation of ratios Ratio Formula Webster Industry average Current ratio Current assets/current liabilities 2.01 2.00 Day sales outstanding Account receivable/(sales/365 days)

FINANCE 5 FINANCE Finance Name of the university Student ID

   

Webster University

   Added on 2021-10-11

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Running head: FINANCE
Finance
Name of the student
Name of the university
Student ID
Author note
FINANCE 5 FINANCE Finance Name of the university Student ID_1
1FINANCE
Table of Contents
Part A: Financial statements and cash flows..............................................................................2
Answer A...............................................................................................................................2
Answer B................................................................................................................................2
Answer C................................................................................................................................2
Part B: Analysis of financial statements....................................................................................3
Answer 1................................................................................................................................3
Answer 2................................................................................................................................3
Answer 3................................................................................................................................3
Reference....................................................................................................................................5
FINANCE 5 FINANCE Finance Name of the university Student ID_2
2FINANCE
Part A: Financial statements and cash flows
Answer A
Net income of the company = fr 2.5 million
EBIT = fr 5 million
Tax rate = 35%
Therefore, pre-tax income = 2.5 / (1-0.35) = fr 3.85 million
Interest expense = EBIT – taxable income
Interest expense = fr 5 million – fr 3.85 million = fr 1.15 million
Answer B
Net income = fr 5.8 million
Depreciation = fr 0.2 million
Net cash flow = Net income + depreciation
Net cash flow = fr 5.8 million + fr 0.2 million = fr 6.0 million.
Answer C
EBIT = fr 880,000
Depreciation expenses = fr 150,000
Tax rate = 35%
Net income = 880,000 – (880,000 * 0.35) = fr 572,000
Net cash flow = Net income + depreciation
FINANCE 5 FINANCE Finance Name of the university Student ID_3

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