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Financial Analysis and ROI Metrics

This document contains 15 examples showing calculations of financial metrics like return on investment, income, sales revenue, costs, transfer prices, capital turnover, economic value added, weighted average cost of capital, and other ratios. Numbers, calculations, and brief descriptions are provided for each example.

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Christian Paulo Viernes
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8 views2 pages

Financial Analysis and ROI Metrics

This document contains 15 examples showing calculations of financial metrics like return on investment, income, sales revenue, costs, transfer prices, capital turnover, economic value added, weighted average cost of capital, and other ratios. Numbers, calculations, and brief descriptions are provided for each example.

Uploaded by

Christian Paulo Viernes
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd

1 Sales $ 5,900,000

Less: Operating Expenses 4,875,000


Income 1,025,000
Divide: Invested Capital 6,900,000
Return on Investment 14.86%

2 Sales $ 4,600,000
Multiply: Sales Margin 5.00%
Income 230,000
Divide: Invested Capital 5,600,000
Return on Investment 4.11%

3 Income $ 147,000
Return on Investment 10.00%
Invested Capital $ 1,470,000

4 Invested Capital $ 28,000,000


Capital Turnover 2
Sales Revenue $ 56,000,000

5 Profit $ 2,700,000
Invested Capital $ 8,600,000
Multiply: Imputed Interest Rate 15%
Interest 1,290,000
Residual Income $ 1,410,000

6 Income $ 1,700,000
Less: Residual Income 482,000
Total 1,218,000
Divide: Invested Capital 8,700,000
Imputed Interest Rate 14%

7 After-Tax Operating Income $ 3,290,000


Total Asset $ 7,090,000
Less: Current Liabilities 1,890,000
Equity 5,200,000
Multiply: WACC 12%
Total 624,000
Economic Value Added $ 2,666,000

8 After-Tax Operating Income $ 1,680,000


Total Asset $ 10,800,000
Less: Current Liabilities 970,000
Equity 9,830,000
Multiply: WACC 10%
Total 983,000
Economic Value Added $ 697,000

9 Variable Cost per Unit $ 27


Less: Internal Transfers 4
Transfer Price $ 23

13 Standard Variable Cost $ 9.70


Allocated Fixed Overehead 2.85
Transfer Price $ 12.55

14 Sales $ 2,300,000
Divide: Invested Capital 610,000
Capital Turnover 3.77

15 Market Value of Debt Capital $ 52,000,000


Interest Rate on Debt Capital 10%
Multiply: 1 - Income Tax Rate (1 - 40%) 60%
Factor 6%
After-Tax Cost of Debt Capital 3,120,000
Market Value of Equity Capital $ 82,000,000
Cost of Equity Capital Factor 14%
Cost of Equity Capital 11,480,000
Total 14,600,000
Market Value of Debt Capital 52,000,000
Market Value of Equity Capital 82,000,000
Divide: Total Market Value 134,000,000
WACC 10.90%

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