Financial manager for Computrol Inc.

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Dilli Bista, MBA is the financial manager for Computron Inc. a large public corporation specializing in software manufacturing. The company designs and develops software programs that allow users to create their own documents, apps, animations, and other media content. Despite a huge investment made last three years in fixed assets, the company’s sales revenue and profit margins have decreased over the years because of the Covid-19 pandemic and complaints of some parents about the effect of video games on their kids’ social life and academic performance. Dilli is analyzing the company’s financial statements and annual reports to determine the financial performance of the company for the year and see how the performance can be improved.

Dilli noticed that last year the company had $4 million in operating income (EBIT). The company had a depreciation expense of $1 million and an interest expense of $1 million. The company’s tax rate is 25%. The company has $14 million in operating current assets and $4 million in operating current liabilities and has $15 million in net plant and equipment. The company has after-tax cost of capital of 10%.

1. List four types of financial statements that the company’s annual report typically include. State three items that can be found in each of the financial statement of Computron Inc.

2. Determine Computron’s net income for the year. Show your calculations.

3. What was Computron’s net cash flow?

4. What was Computron’s net operating profit after taxes (NOPAT)?

5. Calculate net operating working capital and total net operating capital for the year.

6. Calculate Computron’s free cash flow for the year if net operating capital in the previous year was $24 million.

7. Explain to the chairman of the board five uses of free cash flow that can help maximize the value of the firm.

8. Explain Economic Value Added (EVA) and compute Computron’s EVA if total net operating capital is $25 million? The company’s after-tax cost of capital is 10.0%.

9. Compute and explain market value added (MVA) for Computron using the following information:

i. total number of shares outstanding is 2 million

ii. current stock price is $35 per share

iii. total common equity is $68.2 million

10. Calculate the company’s return on invested capital (ROIC). Do you think Computron’s growth added value?

Sample Solution

o him. This is further supported by Aristotle’s Politics ((1996), Page 28): ‘a king is the natural superior of his subjects.’ However, he does later emphasise to put all faith in the prince is wrong and has consequences; a thorough examination of the cause of war is required along with the willingness to negotiate rival party (Begby et al (2006b), Page 312& 318). This is supported by the actions of Hitler are deemed unjustly. Also, in today’s world, wars are no longer fought only by states but also non-state actors like Al-Queda and ISIS, showing Vittola’s normative claim on authority is outdated. This is further supported by Frowe’s claim that the leader needs to represent the people’s interests, under legitimate authority, which links on to the fourth condition: Public declaration of war. Agreed with many, there must be an official announcement on a declaration of war (Frowe (2011), Page 59-60&63).
Finally, the most controversial condition is that wars should have a reasonable chance of success. As Vittola reiterated, the aim of war is to establish peace and security; securing the public good. If this can’t be achieved, Frowe argues it would be better to surrender to the enemy. This can be justified because the costs of war would have been bigger (Frowe (2011), Page 56-7).
Consequently, jus ad bellum comprises several conditions but most importantly: just cause and proportionality. This gives people a guide whether it’s lawful to enter a war or not. However, this is only one part of the theory of the just war. Nevertheless, it can be seen above that jus ad bellum can be debated throughout, showing that there is no definitive theory of a just war, as it is normatively theorised.

Jus in bello

The second section begins deciphering jus in bello or what actions can we classify as permissible in just wars (Begby et al (2006b), Page 323).
First, it is never just to intentionally kill innocent people in wars, supported by Vittola’s first proposition. This is widely accepted as ‘all people have a right not to be killed’ and if a soldier does, they have violated that right and lost their right. This is further supported by “non-combatant immunity” (Frowe (2011), Page 151), which leads to the question of combatant qualification mentioned later in the essay. This is

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