26 ENTREPRENEURSHIP

FINANCIAL REPORTING AND CONTROL - MIDTERM EXAM

MONDAY, 4 MARCH 2024
YOU MUST COMPLETE YOUR EXAM USING EXCEL. DO NOT CONVERT TO PDF. YOUR ANSWER SPREADSHEETS MUST BE ON
ONE EXCEL FILE WITH YOUR FULL NAME AS YOUR FILE NAME. PLEASE EMAIL ME YOUR EXCEL FILE IN REPLY TO MINE AT
nani@sbm-itb.ac.id GOOD LUCK.

Problem 1 of 5: Based on the 31 December 2022 financial statements for Mystery Company X and other relevant
data attached to this email, please compute an estimated intrinsic value per share, compare it to the company's
share price, and state whether the company is undervalued or overvalued. EBIT growth rate is to be used for your
computation. EBIT is equal to gross profit less general and administrative expenses less selling expenses. EBIT is NOT
the operating profit stated in the company's statement of profit or loss. Tax rate is designated at 22%. Growth rate
at Terminal Year is based on the CAGR of Indonesia's 11-year GDP growth rate. Capital expenditure (CAPEX)
comprise acquisitions of property, plant and equipment. The company's debt is the sum of short-term bank loans
and other, as well as lease liabilities, contract liabilities, long-term bank loans and others, and bonds payables, in the
current liabilities and/or non-current liabilities section of the statement of financial position. Please take note of the
company's treasury shares. Depreciation expense is to be used to compute net capital spending. Discount rate is
arbitrarily set at 15,5%. Share price is based on adjusted close. Please show your calculations using a 10-year
projection followed by Terminal Year.

Problem 2 of 5: On 31 December 2020, XYZ Co. leases new equipment on a 5-year lease contract, which XYZ
designates as a Right of Use (ROU) lease. The lease is payable semi-annually at 30 June and 31 December in the
amount of $58.490, with the first payment occurring on 31 December 2020. At the end of the lease contract, the
ROU asset reverts to the lessor. The fair value of the equipment at the inception of the lease of $480.490. The
leased equipment is depreciated at 31 December over the 5-year lease term by using the straight-line method with
zero salvage value. The company ends its fiscal year at 31 December. You are kindly requested to a) compute the
lease contract's implicit interest rate, b) complete a lease amortization table, c) record the amortization of the lease
liability over the course of the lease contract, d) record the depreciation expense of the Right of Use Asset over the
course of the lease contract, e) record the journal entry to revert the Right of Use asset to the lessor at the end of
the lease contract, and f) present proof of the present value of the lease payments.

Problem 3 of 5: Please record the following economic events (please disregard the dollar amounts):
a) XYZ Co. recognizes revenue in cash.
b) XYZ Co. records an adjusting entry for accrued salaries expense.
c) XYZ Co. receives an advance from a customer.
d) XYZ Co. pays a one-year insurance premium.
Problem 4 of 5: Based on the financial statements of Mystery Company X attached to this email, please compute the
indicators below for fiscal year ended 31 December 2022.
a) Interest Coverage Ratio
b) DER
c) EV/EBITDA
d) EBIT Margin
Problem 5 of 5: Based on the data below for XYZ Co. (in Rupiah millions), please compute the company's weight of
equity, and the weight of debt. Show your calculation.
8.103.032 MARKET VALUE OF EQUITY
708.254 BOOK VALUE OF DEBT