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Agata [3.3K]
3 years ago
5

Income Statement For the Year Ended on December 31 J&H Corp. Industry Average Net sales $39,000,000 $48,750,000 Operating co

sts, except depreciation and amortization 31,200,000 39,000,000 Depreciation and amortization 1,560,000 1,950,000 Total operating costs 32,760,000 40,950,000 Operating income (or EBIT) $6,240,000 $7,800,000 Less: Interest expense 624,000 1,170,000 Earnings before taxes (EBT) $5,616,000 $6,630,000 Less: Taxes (40 % ) 2,246,400 2,652,000 Net income $3,369,600 $3,978,000 information given to him, Jeffery submits a report on January 1 with some important calculations for management to use, both for Based on analysis and to devise an action plan. Complete the following statements in his report. If your answer is negative, use the minus sign.
Statement # 1 : J&H Corp.'s NOPAT is,which is _________ than the industry average of_______ $
Statement #2: The company is using_______ in net operating working capital (NOWC).
Statement #3 : )8H Corp . is generating________ in net cash flow from its operations and an accounting profit of__________ S
Statement # 4 : The firm uses s________ of total net operating capital to run the business.The value is computed as the _______of
J8H Corp.'s net operating working capital and its .
Business
1 answer:
noname [10]3 years ago
4 0

Answer:

1.J&H Corp’s NOPAT is $3,744,000, which is $936,000 lower than industry average of $4,680,000

2.Net operating working capital of $18,000 is been used by the company.

3.J&H Corp will be generating $5,019,600 in net cash flow from its operations and an accounting profit of $3,369,600

4.Therefore the firm uses $978,000 of total net operating capital to run the business.

Explanation:

J&H Corp

1. Calculation for NOPAT

NOPAT = 6,240,000 x (1- 40%)

= 6,240,000 x (1 – 0.4)

= 6,240,000 x 0.6

= $3,744,000

Calculation for Industry Average

Industry Average= 7,800,000 x (1- 40%)

7,800,000×(1-0.4)

7,800,000×0.6

=$4,680,000

Hence:

($4,680,000-$3,744,000)=$936,000

J&H Corp’s NOPAT is $3,744,000, which is $936,000 lower than industry average of $4,680,000

2:Calculation for Net Operating Working Capital

Net Operating Working Capital= Current Operating Assets − Current Operating Liabilities

Net Operating Working Capital= (Cash + Accounts Receivable + Inventories)− (Accounts Payable + Accrued Expenses)

Short term investments won't be included in Current Operating Assets

Given current assets = $600,000 ×12% in Short term investments = $72,000

Therefore Current Operating Assets will be: 600,000 – 72,000 = $528,000

Current Operating Liabilities = $510,000

Net Operating Working Capital

= $528,000 - $510,000 = $18,000

Net operating working capital of $18,000 is been used by the company.

3. Calculation for Net cash flow operations

Net cash flow from operations = Net income + Depreciation & Amortization + Changes in Working Capital

Changes in working capital = Working capital of the year

= $600,000 - $510,000

= $90,000

Net cash flow from operations will be:

$3,369,600 + $1,560,000 + $90,000 = $5,019,600

The Accounting profit will be the total revenue less the explicit costs

Explicit costs includes operating expenses, depreciation, interest and taxes.

Hence, the Accounting Profit will be :

Net income = $3,369,600

J&H Corp will be generating $5,019,600 in net cash flow from its operations and an accounting profit of $3,369,600

4. Calculation for the Total net operating capital

Total net operating capital = Net Operating Working Capital + Non-current Operating Assets

$528,000 - $510,000 = $18,000

Net Operating Working Capital = $18,000

Non-current Operating Assets = operating long term assets = $960,000

Total net operating capital

= $18,000 + $960,000

= $978,000

Therefore the firm uses $978,000 of total net operating capital to run the business. Thus the value is been computed as the sum of J&H Corp’s net operating working capital and its Non-current Operating Assets.

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AURORKA [14]

The system is known as <em>Organizational Culture</em>

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8 0
3 years ago
On January 1, 2021, Red Flash Photography had the following balances: Cash, $19,000; Supplies, $8,700; Land, $67,000; Deferred R
ira [324]

Answer:

<u> Red Flash Photography </u>  

<u>Balance Sheet as at January 1, 2018,</u>

<u>     Assets </u>

Cash,............... $26,000  

Supplies,........... $9,400

Land, ........ .......<u>$74,000</u>  

Total..................<u>109, 400</u>  

<u>Capital and Liabilities</u>

Deferred Revenue... $6,400

Common Stock..... ..$64,000  

Retained Earnings...<u>$39,000.</u>  

Total............................<u>109,400 </u>

<u> Red Flash Photography </u>  

Balance Sheet as at 31st December 2018

Revised Balance Sheet on 31st December 2018  

<u>Assets</u>

Cash..........................................42,600

Account Receivable............ 44,000  

Supplies....................................15,800  

Land..........................................74,000  

Prepaid Rent............................<u>19,500 </u>

Total...........................................<u> 195,900</u>  

<u>Capital & Liabilities</u>

Common Stock ......................98,000  

Retained Earnings.................56,500  

Accrued Wages........................5,400  

Accounts Payable...................<u>36,000</u>  

Total........................................... <u>195,900</u>

Explanation:

1. February 15 Issue additional shares of common stock, $34,000.  

ADD 34,000 TO EQUITY, AND TO CASH

2. May 20 Provide services to customers for cash, $49,000, and on account, $44,000.  

LESS 49,000 FROM CASH AND ADD TO RETAINED EARNINGS AS INCOME, ADD 44,000 AS ACCOUNT RECEIVABLES AND ADD TO INCOME IN RETAINED EARNINGS  

3. August 31 Pay salaries to employees for work in 2018, $37,000.  

LESS 37,000 FROM CASH AND FROM RETAINED EARNINGS

4. October 1 Purchase rental space for one year, $26,000.  

LESS FROM CASH AND FROM RETAINED EARNINGS

5. November 17 Purchase supplies on account, $36,000.  

ADD TO STOCK, ADD TO ACCOUNTS PAYABLES

6. December 30 Pay dividends, $3,400.  

LESS FROM CASH AND FROM RETAINED EARNINGS

The following information is available on December 31, 2018:  

1. Employees are owed an additional $5,400 in salaries.  

ADD TO ACCRUED SALARIES,LESS FROM RETAINED EARNINGS AS EXPENSES INCURRED IN THE PERIOD

2. Three months of the rental space has expired.  

CREATE PREPAID RENT FOR 3/4 OF RENT (19,500) AND LESS 6500 FROM RETAINED EARNINGS AS EXPENSE FOR THE PERIOD

3. Supplies of $6,400 remain on hand.  

LESS 19600 (26,000-6400) FROM SUPPLIES AND FROM RETAINED EARNINGS AS EXPENSE FOR THE PERIOD

4. All of the services associated with the beginning deferred revenue have been performed.  

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7 0
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Exotech has an inventory turn ratio of 60 with $50 million in annual sales, and an average inventory of $250,000. What is Exotec
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Answer:

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Explanation:

Data provided in the question:

Inventory turn ratio = 60

Annual sales = $50 million

Average inventory = $250,000

Now,

we know,

Inventory turn ratio  = ( Cost of goods sold ) ÷ ( Average inventory )

thus,

60 = ( Cost of goods sold ) ÷ $250,000

or

Cost of goods sold = 60 × $250,000

or

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The most common type of marketing is product and service promotion. Advertising - You can advertise your product, service, or brand in newspapers, radio, television, magazines, outdoor signage, and online.

Promotional materials, events, or ideas are intended to increase product or service sales.

The most important function of a promotion is to distinguish a company from its competitors. If there was no competition, no business would ever need to run promotions.

To know more about promotional efforts follow the link:

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