Q1 (1.5 marks)

Ahlam Company’s net income for the year 2000, is $3,700,214. The company had an EBITDA of $ 10,125,300, and its depreciation and amortization expense was equal to $2,543,790. The company’s average tax rate is 35 percent.

What is the amount of interest expenses for the firm? (Show the details of your calculations).
Prepare a common sized Income Statement if net sales equal $12,000,000

Q2. (1 Mark)

The following are accounts balance (in thousands) for Malak Company. Calculate Net Income after-tax (show intermediate steps) t=35% for the year ended December 31, 2020.

Net property and equipment

$ 2,000

Accounts receivable

$3,000

Notes payable

$37,000

Revenues

$ 983,000

Supply expenses

$ 255,000

Depreciation expenses

$ 35,000

Labor expense

$300,000

Interest Expenses

$11,000

Stockholders’ Equity

$61,500

Cash & cash equivalents

$97,000

Long-term debt

$3,500

Q3. Calculate the following ratios from the Balance Sheet and the Income Statement given below: (1.5 Mark)

Current Ratio
Debt Ratio
Fixed asset turnover
Total asset turnover
Operating profit margin

Balance Sheet:

Cash

30,000

Acct/Rec

72,500

Inventories

50,000

Current assets

152,500

Net fixed assets

240,000

Total assets

392,500

Accts/Pay

44,500

Accrued expenses

31,000

Short-term N/P

9,500

Current liabilities

85,000

Long-term debt

110,000

Owner’s equity

197,500

Total liabilities and owners equity

392,500

Income Statement:

Net sales

450,000

COGS

220,000

Gross profit

230,000

Operating expenses

128,000

Net operating income

102,000

Interest expense

18,500

EBT

83,500

Income taxes

33,000

Net income

50,500

Q4. Using the values below, answer the questions that follow: (1mark)

Amount of annuity: $500

Interest rate: 9%

N=10 years

A) Calculate the future value of the annuity, assuming that it is
1/ An ordinary annuity.
2/ An annuity due.
B) Compare your findings in parts a(1) and a(2).
All else being identical, which type of annuity—ordinary or annuity due—is preferable as an investment? Explain why.