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  • Alcarde Catubig Assignment4 1 Fin003

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    Michael Angelo Catubig
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    This document contains financial calculations and comparisons for Sushmita Company and Aishwarya Company. It calculates key metrics like EBIT, net income, return on invested capital (ROIC), return on equity (ROE), debt-to-capital ratio, and interest expense. The analysis shows that while the companies have the same EBIT and ROIC of 12%, their net income, ROE, debt levels, and interest expenses differ based on varying capital structures and debt costs.

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    ALCARDE_CATUBIG_ASSIGNMENT4_1_FIN003

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    This document contains financial calculations and comparisons for Sushmita Company and Aishwarya Company. It calculates key metrics like EBIT, net income, return on invested capital (ROIC), return on equity (ROE), debt-to-capital ratio, and interest expense. The analysis shows that while the companies have the same EBIT and ROIC of 12%, their net income, ROE, debt levels, and interest expenses differ based on varying capital structures and debt costs.

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    Download as XLSX, PDF, TXT or read online from Scribd
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    11 views2 pages

    Alcarde Catubig Assignment4 1 Fin003

    Uploaded by

    Michael Angelo Catubig
    This document contains financial calculations and comparisons for Sushmita Company and Aishwarya Company. It calculates key metrics like EBIT, net income, return on invested capital (ROIC), return on equity (ROE), debt-to-capital ratio, and interest expense. The analysis shows that while the companies have the same EBIT and ROIC of 12%, their net income, ROE, debt levels, and interest expenses differ based on varying capital structures and debt costs.

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    © All Rights Reserved
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    of 2

    JUDY ANN ALCARDE ASSIGNMENT 4.

    1 9/16/2020
    MICHAEL ANGELO CATUBIG

    Sushmita Company Aishwarya Company


    EBIT 4,000,000.00 4,000,000.00
    multiplied by 1-tax 60% 60%
    Net 2,400,000.00 2,400,000.00
    divided by Total Capital 20,000,000.00 20,000,000.00
    ROIC 12% 12%

    EBIT 4,000,000.00 4,000,000.00


    Less: Interest Expense 1,200,000.00 600,000.00
    Income before tax 2,800,000.00 3,400,000.00
    Income tax expense 1,120,000.00 1,360,000.00
    Net Income 1,680,000.00 2,040,000.00 “I affirmth

    Net Income 1,680,000.00 2,040,000.00


    divided by Average Equity 10,000,000.00 14,000,000.00
    Return on Equity 16.80% 14.57%

    Supporting Computation:
    Debt 10,000,000.00 6,000,000.00
    Invested Capital 20,000,000.00 20,000,000.00
    Debt-to-Capital Ratio 50% 30%

    Debt 10,000,000.00 6,000,000.00


    Interest Rate 12% 10%
    Interest Expense 1,200,000.00 600,000.00
    Honor pledge for graded assignments

    “I affirmthat I have not given or received any unauthorized help on this


    assignment and that this work is my own”.

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