Computrons

Tofan S. Hans

Mini Case (Chapter 2)

Questions and Answers:

A. What effect did the expansion have on sales and net income? What effect did the expansion have on the asset side of the balance sheet? What effect did it have on liabilities and equity?

The effect of expansion on sales is good because it went up but due to the cost that also raises the net income became negative. Effect on assets is also good the amount of assets went up in 2013 compare to 2012. Liabilities and equity increases by 1,417,792 within 1yr because of the expansion.

B. What do you conclude from the statement of cash flows?


I conclude that; accounts receivable went up that’s which means more sales revenue has bees included in net income than collected. Company used cash to pay dividends to shareholders. And Notes payable went up because they receive from creditors.

D. What is Computron’s net operating profit after taxes (NOPAT)? What are operating current assets? What are operating current liabilities? How much net operating working capital and total net operating capital does Computron have?

NOPAT is the amount of profit Computron would generate if it had no debt and held no financial assets. |

|

| | | | | | | |

NOPAT13 = | EBIT | x | ( 1 - T ) | | | | |

= | $17,440 | x | 60% | | | | |

= | $10,464 | | | | | | |

| | | | | | | |

NOPAT12 = | EBIT | x | ( 1 - T ) | | | | |

= | $209,100 | x | 60% | | | | |

= | $125,460 | | | | | | |

| | | | | | | |

| | | | | | | |

Net Operating Working Capital | | | | | |

Those current assets used in operations are called operating current assets, and the current liabilities that result from operations are called operating current liabilities. Net operating working capital is equal to operating current assets minus operating current liabilities. |

|

|

|...