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Calculate the operating assets of the company

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Reference no: EM132621614

Problem - Jane Doe is a private company which a management accountant is analyzing its performance. So it is trying to look at different components that are distributing to its success. The tests he wants to carry out are the following using the table below:

Current liabilities

4500

Notes payable

25600

Equity

150000

Personal car

15000

Tax rate

30%

Net income

19500

Sales

56200

Interest on debt

8%

REQUIRED -

1. Calculate interest expense, tax and EBIT.

2. Calculate the operating assets of the company.

3. In calculating the Plant, Property and Equipment, he decides to use the gross PPE and ignores the accumulated depreciation. Can you mention one of the main reasons why he decides to do so?

4. What are the pro?t margin and the asset turnover of the company?

5. Using Du Pont analysis, calculate the ROI of the company?

6. What are the major criticisms directed towards the use of Return on Investment.

Reference no: EM132621614

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