Prepare an income statement taking into consideration

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Reference no: EM132965290

The balance sheets at the end of 2018 and 2019 of Kairos Industries are shown below:

2019 2018

Cash $102,950 $89,825

Accounts receivable 103,465 85,626

Inventories 38,544 35,082

Total current assets 244,959 210,534

Property, plant and equipment 67,265 42,536

Total assets 312,224 253,070

Debts to pay 30,861 23,209

Accumulations 30,577 22,756

Obligations to pay 16,817 14,317

Total current liabilities 78,255 60,282

Long term debts 76,364 64,014

Total liabilities 154,619 124,296

Common actions 100,000 90,100

Retained earnings 57,605 38,874

Total equity 157,605 128,974

Total liabilities plus equity $312,224 $253,270

Problem 1. In 2019, Kairos Industries achieved sales of $ 330 million and EBITDA of 17% of sales. Depreciation as amortization of fixed assets was 11% and interest paid $ 2 million. On the other hand, the tax rate was 35% and 38% of the net income is awarded to dividends. Prepare an income statement taking into consideration the data presented.

Problem 2. Prepare the capital statement for the period ended December 31, 2019.

Problem 3. Taking into consideration that Kairos Industries does not have any surplus cash available, it determines the available cash flow (Free Cash Flow) and the operating working capital.

Problem 4. Explain the effect it would have on the taxes paid by shareholders and the company if Kairos Industries increased its dividend rate.

Problem 5. Calculate the economic value added (EVA) and the market value added (MVA) in 2019, considering that the cost of capital after tax is 12% and the price of the shares of Kairos Industries is $ 20 with 9 million of outstanding shares.

Reference no: EM132965290

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