PLEASE SEE ATTACHED
Item 4
South Sea Baubles has the following (incomplete) balance sheet and income statement.
BALANCE SHEET AT END OF YEAR
(Figures in $ millions)
Assets
2018
2019
Liabilities and Shareholders’ Equity
2018
2019
Current assets
$
104
$
210
Current liabilities
$
78
$
102
Net fixed assets
940
1,040
Long-term debt
670
890
INCOME STATEMENT, 2019
(Figures in $ millions)
Revenue
$
2,020
Cost of goods sold
1,100
Depreciation
420
Interest expense
254
a&b. What is shareholders’ equity in 2018 and 2019?
c&d. What is net working capital in 2018 and 2019?
e. What are taxes paid in 2019? Assume the firm pays taxes equal to 21% of taxable income.
f. What is cash provided by operations during 2019?
g. Net fixed assets increased from $940 million to $1,040 million during 2019. What must have been South Sea’s gross investment in fixed assets during 2019?
Complete this question by entering your answers in the tabs below.
· Req A and B
· Req C and D
· Req E
· Req F
· Req G
What is shareholders’ equity in 2018 and 2019? (Enter your answers in millions.)
2018
_______ million
2019
_____ million
