Assignment Cover

Course code: MBA 530

Course name: EVALUATING FINANCIAL INFORMATION

Assignment title: No 4

Instructor’s name: Mr. Stanley Ansel

Student’s name:
Date: 10/12/2013

Comments:
Grade: /100

IVORY TUSKS INC.

Income Statement
For the period ending December 31, 2013
Revenue 600
Less: Discounts 15
Returns 15 (30)
 Net revenue 570
Cost of Sales (290)
Gross Profit 280
Operating Expenses:
Selling Expenses 30
Administrative Exps. 45
Total o/e (75)
Operating Income 205
Financial Income and
Financial Expenses:
Interest Income 10
Interest Expense (25)
Net, financial expenses (15)
Net Income before Income 190
Taxes
Income Tax Expense (40%) (76)
Net Income or 114
Net Earnings

IVORY TUSKS INC.

Balance Sheet
December 31, 2013

Cash and Cash Equivalents 200 Accounts Payable 500

Marketable Securities 25 Notes Payable 700
Accounts Receivables 300 Accrued Liabilities 250
Inventory 700 Total current liabilities 1,450
Prepaid Expenses 40
Total current assets 1,265 Long-term debt 2,500
Total Liabilities 3,950
Property, Plant & Equipment:
Land (in use) 2,000
Building 2,400 Paid-in-capital 1,201
AD (400) Beginning RE 1,000
Book value (net) 2,000 Net Income 114
Machinery 1,500 Ending RE 1,114
AD (500) Total SE 2,315
Book value(net) 1,000

Total Net fixed assets 5,000

Total Assets 6,265 Total Liab. & SE 6,265

Required:
1. Find as follows: EBIT, EBT. NOPAT, Tax savings from debt, Net financing
expenses after tax
2. Find as follows: Operating income before SI and DA(special items is 30 and
depreciation and amortization are 35), EBITDA
3. Find as follows: Invested capital, net operating assets; invested capital
financing; Interest bearing debt; Interest bearing assets; Net interest bearing
debt
4. Find as follows: Current operating assets; Non-interest bearing debt

1. IVORY TUSKS INC.

Analytical Income Statement
For the period ending December 31, 2013

Net Revenue 570

Operating Expenses (365)
EBIT, earnings before 205
Interest and taxes
Income tax expense (40%) 82
NOPAT, net operating after 123
taxes
Net financial expenses (15)
Tax savings from debt 6
Financing (70 – 65)
Net financing expenses (9)
After tax
Net Income, 114
Net earnings

Net Income before Income Taxes (EBT) 190

2. IVORY TUSKS INC

Analytical Income Statement
For the period ending December 31, 2013

Net Revenue 570

Cost of Sales (290)
Gross Profit 280
Operating expenses without (10)
Special items and Depreciation and
Amortization (75-65)
Operating income before SI & DA 270
Special Items (30)
EBITDA 240
Depreciation and Amortization (35)
EBIT 205
Income tax expense (40%) (82)
NOPAT 123
Financial Income 10
Financial Expense (25)
Tax Savings on DF 6
 Net Financial Expenses after taxes (9)
Net Income, 114
Net earnings

3. IVORY TUSKS INC

Analytical Balance Sheet
December 31, 2013

Invested Capital:

Total Assets 6,265

Cash and Cash Equivalents (200)
Marketable Securities (25)
Accounts Payable (500)
Accrued Liabilities (250)
Invested Capital net operating assets 5,290

Shareholders’ Equity 2,315

Notes Payable 700
Long-term Debt 2,500
Cash and Cash Equivalents (200)
Marketable Securities (25)
Invested Capital, Financing 5,290

Net Interest Bearing Debt:

Notes Payable 700

Long-term Debt 2,500
Interest Bearing Debt 3,200
Cash and Cash Equivalents 200
Marketable Securities 25
Interest Bearing Assets (225)
Net Interest Bearing Debt 2,975

4. IVORY TUSKS INC

Analytical Balance Sheet
December 31, 2013
Total Net Fixed Assets 5,000
Accounts Receivables 300
Inventory 700
Prepaid Expenses 40
Current operating assets 1040
Accounts Payable 500
Accrued Liabilities 250
Non Interest Bearing Debt, (750)
Total Operating Liabilities

Invested Capital, Net

Operating Assets 5,290