What is rosnan economic value added

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Reference no: EM132802326

Rosnan Industries' 2017 and 2016 balance sheets and income statements are shown below. All of the balance of Cash and Equivalents is an operating asset.

Balance Sheets:

 

2017

2016


Cash and equivalents

$100  

$85  


Accounts receivable

275  

200  


Inventories

375  

250  


      Total current assets

$750  

$635  


Net plant and equipment

2,000  

1,490  


Total assets

$2,750  

$2,125  


 

 

 


Accounts payable

$150  

$85  


Accruals

75  

50  


Notes payable

150  

75  


      Total current liabilities

$375  

$210  


Long-term debt

450  

290  


Common stock

1,225  

1,225  


Retained earnings

700  

400  


Total liabilities and equity

$2,750  

$2,125  

 

Income Statements:

 

2017

2016


Sales

$2,000  

$1,500  


Operating costs excluding depreciation

1,250  

1,000  


EBITDA

$750  

$500  


Depreciation and amortization

100  

75  


EBIT

$650  

$425  


Interest

62  

45  


EBT

$588  

$380  


Taxes (40%)

235  

152  


Net income

$353  

$228  


 

 

 


Dividends paid

$53  

$48  


Addition to retained earnings

$300  

$180  


 

 

 


Shares outstanding

180  

180  


Price

$20.83  

$18.33  


WACC

12.00%  

 


Problem 1: Using the financial statements above, what is Rosnan's 2017 market value added (MVA)? Round your answer to the nearest dollar. Do not round intermediate calculations.

Problem 2: Using the financial statements given earlier, what is Rosnan's 2017 economic value added (EVA)? Round your answer to the nearest cent. Do not round intermediate calculations.

Reference no: EM132802326

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