Look again at table 18.11 at the end of the fiscal 2008 Estee Lauder had 195 mil
ID: 2670390 • Letter: L
Question
Look again at table 18.11 at the end of the fiscal 2008 Estee Lauder had 195 million shares outstanding with a share price of $45.50. The company’s weighted-average cost of capital was about 10%. Calculate
End of Year
Start of Year
BALANCE SHEET
Assets
Current assets:
Cash and marketable securities
402
254
Accounts receivable
1039
861
Inventories
987
856
Other current assets
360
259
Total current assets
2787
2239
Fixed assets:
Tangible fixed assets
Property, plant, and equipment
2,394
2,113
Less accumulated depreciation
1,351
1,232
Net tangible fixed assets
1,043
881
Long-term investments
24
22
Other long-term assets
1,157
984
Total Assets
5,011
4,126
Liabilities and shareholder’s equity
Current liabilities
Debt due for repayment
119
60
Accounts payable
1,581
1,440
Total current liabilities
1,699
1,501
Long-term debt
1,078
1,028
Other long-term liabilities
581
398
Total Liabilities
3,358
2,927
Total shareholder’s equity
1,653
1,199
Total Liabilities and shareholders equity
5,011
4,126
INCOME STATEMENT
Net sales
7,911
Cost of goods sold
1,997
Selling, general, and administrative expenses
4,852
Depreciation
251
Earnings before interest & taxes (EBIT)
811
Interest expense
67
Taxable income
744
Tax
260
Minority interest
10
Net income
474
Dividends
107
Addition to retained earnings
367
End of Year
Start of Year
BALANCE SHEET
Assets
Current assets:
Cash and marketable securities
402
254
Accounts receivable
1039
861
Inventories
987
856
Other current assets
360
259
Total current assets
2787
2239
Fixed assets:
Tangible fixed assets
Property, plant, and equipment
2,394
2,113
Less accumulated depreciation
1,351
1,232
Net tangible fixed assets
1,043
881
Long-term investments
24
22
Other long-term assets
1,157
984
Total Assets
5,011
4,126
Liabilities and shareholder’s equity
Current liabilities
Debt due for repayment
119
60
Accounts payable
1,581
1,440
Total current liabilities
1,699
1,501
Long-term debt
1,078
1,028
Other long-term liabilities
581
398
Total Liabilities
3,358
2,927
Total shareholder’s equity
1,653
1,199
Total Liabilities and shareholders equity
5,011
4,126
INCOME STATEMENT
Net sales
7,911
Cost of goods sold
1,997
Selling, general, and administrative expenses
4,852
Depreciation
251
Earnings before interest & taxes (EBIT)
811
Interest expense
67
Taxable income
744
Tax
260
Minority interest
10
Net income
474
Dividends
107
Addition to retained earnings
367
Explanation / Answer
.
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