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Quantitative Problem: Rosnan Industries' 2020 and 2019 balance sheets and income statements are shown below. Balance...

Quantitative Problem: Rosnan Industries' 2020 and 2019 balance sheets and income statements are shown below.
Balance Sheets:
2020
2019
Cash and equivalents
$90
$75
Accounts receivable
275
300
Inventories
375
250
Total current assets
$740
$625
Net plant and equipment
2,300
1,490
Total assets
$3,040
$2,115
Accounts payable
$150
$85
Accruals
75
50
Notes payable
140
65
Total current liabilities
$365
$200
Long-term debt
450
290
Common stock
1,225
1,225
Retained earnings
1,000
400
Total common equity
$2,225
$1,625
Total liabilities and equity
$3,040
$2,115

Income Statements:
2020
2019
Sales
$2,285
$1,585
Operating costs excluding depreciation
1,250
1,000
EBITDA
$1,035
$585
Depreciation and amortization
100
75
EBIT
$935
$510
Interest
63
46
EBT
$872
$464
Taxes (25%)
218
116
Net income
$654
$348
Dividends paid
$54
$48
Addition to retained earnings
$600
$300
Shares outstanding
100
100
Price
$25.00
$22.50
WACC
10.00%
The balance in the firm's cash and equivalents account is needed for operations and is not considered "excess" cash.
What is Rosnan's 2020 net operating working capital (NOWC)? Round your answer to the nearest dollar.
$
What is Rosnan's 2020 net working capital (NWC)? Round your answer to the nearest dollar.
$
0 0
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Answer #1

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