Reference no: EM131084350
The following table gives abbreviated balance sheets and income statements for Estée Lauder Companies. ($ in millions) End of Year Start of Year Balance Sheet Assets Current assets: Cash and marketable securities $1,303 $1,126 Accounts receivable 996 751 Inventories 1,001 832 Other current assets 497 433 Total current assets 3,797 3,142 Fixed assets: Property, plant, and equipment 2,867 2,530 Less accumulated depreciation 1,714 1,496 Net fixed assets 1,153 1,034 Other long-term assets 1,449 1,196 Total assets $6,399 $5,372 Liabilities and Shareholders’ Equity Current liabilities: Debt due for repayment $ 143 $ 28 Accounts payable 1,810 1,554 Total current liabilities 1,953 1,582 Long-term debt 1,085 1,210 Other long-term liabilities 626 615 Total liabilities 3,664 3,407 Total shareholders' equity 2,735 1,965 Total liabilities and shareholders’ equity $6,399 $5,372 Income Statement Net sales $8,815 Cost of goods sold 1,942 Selling, general, and administrative expenses 5,491 Depreciation 303 Earnings before interest and taxes (EBIT) 1,079 Interest expense 69 Taxable income 1,010 Tax 327 Net income $ 683 Dividends 153 Addition to retained earnings 530 At the end of fiscal 2011 Estée Lauder had 200 million shares outstanding21 with a share price of $48.0. The company’s weighted-average cost of capital was about 10%. a. Calculate the market value added. (Enter your answer in millions. Round your answer to 2 decimal places.) Market value added $ million b. Calculate the market-to-book ratio. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Market-to-book ratio c. Calculate the economic value added. (Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place.) Economic value added $ million d. Calculate the return on capital. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Return on capital %
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