Liabilities and assets of a well established company are as follows : Liabilities $ Assets Equity Capital ( $10 per share) 10% Long-term Debt Surplus A/c Current Liabilities 15,00,000 5,00,000 Net Fixed Assets 6,00,000 8,00,000 2,00,000 4,00,000 Current Assets 20,00,000 20,00,000 The company's total assets turnover ratio is 3. Its fixed operating costs are $ 10,00,000 and its variable operating cost ratio is 40%. The income tax rate is 50%. Calculate for the company : (a) EBIT ; (b) EBT ; (c) PAT ; (d) EPS.
Liabilities and assets of a well established company are as follows : Liabilities $ Assets Equity Capital ( $10 per share) 10% Long-term Debt Surplus A/c Current Liabilities 15,00,000 5,00,000 Net Fixed Assets 6,00,000 8,00,000 2,00,000 4,00,000 Current Assets 20,00,000 20,00,000 The company's total assets turnover ratio is 3. Its fixed operating costs are $ 10,00,000 and its variable operating cost ratio is 40%. The income tax rate is 50%. Calculate for the company : (a) EBIT ; (b) EBT ; (c) PAT ; (d) EPS.
Chapter3: Evaluation Of Financial Performance
Section: Chapter Questions
Problem 19P
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![Liabilities and assets of a well established company are as follows :
Liabilities
$
Assets
Equity Capital ( $10 per share)
10% Long-term Debt
Surplus A/c
Current Liabilities
15,00,000
5,00,000
Net Fixed Assets
6,00,000
8,00,000
2,00,000
4,00,000
Current Assets
20,00,000
20,00,000
The companys total assets turnover ratio is 3. Its fixed operating costs are $ 10,00,000 and its variable
operating cost ratio is 40%. The income tax rate is 50%. Calculate for the company :
(a) EBIT ; (b) EBT ; (c) PAT ; (d) EPS.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F444634cf-7e9b-4b64-9025-562567e02c42%2F43b1cb44-d898-44d2-aa75-d2b14ac8e482%2Fnnobcy_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Liabilities and assets of a well established company are as follows :
Liabilities
$
Assets
Equity Capital ( $10 per share)
10% Long-term Debt
Surplus A/c
Current Liabilities
15,00,000
5,00,000
Net Fixed Assets
6,00,000
8,00,000
2,00,000
4,00,000
Current Assets
20,00,000
20,00,000
The companys total assets turnover ratio is 3. Its fixed operating costs are $ 10,00,000 and its variable
operating cost ratio is 40%. The income tax rate is 50%. Calculate for the company :
(a) EBIT ; (b) EBT ; (c) PAT ; (d) EPS.
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