Question

Moderately Large Corporation Consolidaed Balance Sheet in thousands except share data) Dec. 31, 2013 Current assets: 1,427 876 s 1,369 Cash and cash equivalents Accounts receivable, net Inventories Prepaid expenses and other current assets Deferred income taxes, net 481 1,489 157 40 4、066 3,137 168 7,371 2,950 2,287 161 5.398 Total current assets Property, plant and equipment, net Other assets TOTAL ASSETS LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: 242 98 Accounts payable Accrued compensation and related costs Accrued taxes Current portion of long-term debt 429 104 132 89 754 2,630 3,384 563 1,830 Total current liabilities Long-term debt Total liabilities Shareholders' equity: Common stock ($0.1 par value)- authorized 4,000,000 shares; issued and outstanding, 3,500,000 Paid-in capital in excess of par 350 2,415 1,222 3,987 350 2,415 241 3,006 Retained earnings Total shareholders' equity TOTAL LIABILITIES AND SHAREHOLDERS EQUITY

Answer 1

Part (a)

Tax Rate=(Income tax / Earning Before Income Tax)*100 =(529/1512)*100= 35%

Profit After Tax-983

Interest Net of tax=10(1-35%)=6.5

NOPAT=983+6.5=989.50

1. Operating Profit Ratio= [Net Operating Profit After Tax(NOPAT) / Net Revenue]*100

=(989.50 / 8935)*100

=11.07%

2. Net profit Ratio = [ Net Profit (PAT) / Net Revenue ]*100

=(983/8935)*100

=11.00%

3.Operating Return on Assets = [ Net Operating Profit After Tax(NOPAT) / Average Net Assets]*100

={989.50/[(7371+5398)/2]}*100

=15.50%

4. Net Return on Assets = [ Net Profit After Tax(PAT) / Average Net Assets]*100

={983/[(7371+5398)/2]}*100

=15.40%

5. Return on equity = [ Net Profit After Tax(PAT) / Average Shareholder Funds]*100

={983/[(3384+2392)/2]}*100

=34.04%

Part (b)

1. Operating Profit Ratio=

Net Operating profit of such co in related to revenue is 11.07%

2. Net profit Ratio=

Net profit of such co in related to revenue is 11.0%

3.Operating Return on Assets=

Operationg Profit given by assets used in business is 15.50

4. Net Return on Assets=

Net Profit given by assets used in business is 15.50

5. Return on equity=

Net Profit earned on Shareholders Fund utilised by the company

Part (c)

Growth rate in cost of sales (21.70) tends to be higher than growth rate in Sales (11.56)