Reference no: EM131848080
A) The following reflects the Income Statement results for the XYZ Company for the period ending 12/31/2016;
($’s)
Sales Revenue 3,000,000
Operating Costs 2,616,000
Depreciation 100,000
Amortization 0
Interest Paid 88,000
Current Taxes 78,000
Based on the above, calculate:
1) EBITDA
2) EBIT
3) EBT
4) Net Income
5) Cash Flow to Investors (CFOA)
B) In February, 2014 Macy’s Inc. reported 4th quarter net income that was 11% greater than the prior year. In response to the announcement, Macy’s stock price fell, despite the increase in earnings. What factors may have contributed to the stock markets valuation of Macy’s? What might those factors signal about the potential future performance of the company? If you were the CEO of Macy’s, what actions would you take in response to the stock market reaction? (Think critically and be creative!)
Part 2
1) An example of a Current Liability on a Balance Sheet is;
a) Long Term Debt
b) Inventory
c) Accrued Wages
d) Treasury Stock
2) Total Assets equal _____ _______ and __________ _________
3) In general, most corporations value inventory using the LIFO method to lower taxable income and related taxes. True or False?
4) The tax rate on the last and next dollar of taxable income is referred to as the ______ tax rate
5) Current Assets minus Current Liabilities equals _______ _______ _______
6) Long Term Assets include (select all that apply)
- Buildings
- Inventory
- Accounts Payable
- Goodwill
7) Market Value accounting reflects assets on the Balance Sheet at their current value, not the price paid. True or False?
8) The most important measure of a Firm’s value is it’s ________ ________
9) The Statement of Cash Flows, reconciles year over year changes in Balance Sheet Cash balances detailed by ________ activities, ________ activities, and ________ activities
10) Dividends that Corporations pay to shareholders are tax deductible. True or False