Income statement Taco Hut for year ending 12-31-2017 sales 2000000 Cost of goods
ID: 2610447 • Letter: I
Question
Income statement
Taco Hut for year ending 12-31-2017
sales
2000000
Cost of goods sold
-600000
Operating income
1400000
expense
-120000
Expense
-180000
ebit
1100000
interest
-100000
ebt
1000000
taxes
-250000
Net income
750000
Balance sheet
Taco Hut on 12-31-2017
cash
200,000
accounts receivable
300,000
Mortgage
1,250,000
land
650,000
Preferred equity
0
goodwill
350,000
Net equipment
500,000
Common equity
?
Total assets
[RR1] 2,000,000
Total debt & equity
?
1. What is the tax rate?
2. What percentage of sales is cost of goods sold?
3. What is the interest rate that the company is paying for its debt?
4. How much does Taco Hut have is current assets?
5. What is the common equity?
sales
2000000
Cost of goods sold
-600000
Operating income
1400000
expense
-120000
Expense
-180000
ebit
1100000
interest
-100000
ebt
1000000
taxes
-250000
Net income
750000
Explanation / Answer
1. Tax Rate = Taxes/EBT = 250000/1000000 = 25%
2. COGS/Sales = 600000/2000000 = 30%
3. Interest Rate = Interest/Debt = 100000/1250000 = 8%
4. Current Assets = Cash + AR = 200000+300000 = $500000