Reference no: EM132538499

You are asked by a Swedish company that assembles computers to draw up a by-nature and by-function income statement for year n. You are provided with the following information:

Retail price of a PC: €1500.

Cost of various components:

Parts                Price                 Opening inventory               Closing inventory

Case                 50                           5                             13

Motherboard       200                           8                            2

Processor           300                            4                          11

Memory             100                            6                          4

Graphic card        50                            1                          13

Hard disk           150                           5                           10

Screen              200                           3                            3

DVD combo         50                             7                        19

• Over the financial period, the company paid out €60 000 in salaries and social security contributions of 50% of that amount. The company produced 240 PCs. Closing stock of finished products was 27 units and opening stock 14 units.

• At the end of the financial period, the manager of the company sells the premises that he had bought for €200 000 three years ago (which was depreciated over 40 years) for €230 000, it now occupies old premises that are fully depreciated, and pays off a €12 000 loan on which the company was paying interest at 5%.

Question 1: What impact do these transactions have on EBITDA, operating profit and net income? Tax is levied at a rate of 35%. Over the course of the financial period, by how much did the company/the lenders/the company manager (who owns 50% of the shares) get richer/poorer?