![Problem 4-3 Calculating EFN (LO2] The most recent financial statements for Kerch, Inc. are shown here (assuming no income tax](http://img.homeworklib.com/questions/536fda70-728a-11ea-ab5d-23fdf69305f1.png?x-oss-process=image/resize,w_560)
Homework Answers
| Increase in Sales =($9,500 - $7,600) / $7,600 =25% | |||
| So if Assets and cost are proportional to sales it means that both will also rise by 25% | |||
| Sales | $ 9,500 | ||
| Cost($5,020*1.25) | $ 6,275 | ||
| Net Income | $ 3,225 | ||
| Assets($19,100*1.25) | $ 23,875 | Debt | $ 7,000 |
| Equity | $ 15,325 | ||
| $ 23,875 | $ 22,325 | ||
| Equity =$12,100 + $3,225 =$15,325 | |||
| So EFN =Total Assets - Total Liabilities and equity | |||
| EFN =$23,875 - $22,325 =$1,550 | |||
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Problem 4-3 Calculating EFN (LO2] The most recent financial statements for Kerch, Inc. are shown here...
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