Here are simplified financial statements of Phone Corporation from a recent year

Question

Here are simplified financial statements of Phone Corporation from a recent year:
INCOME STATEMENT
(Figures in millions of dollars)   Net sales 12,200     Cost of goods sold 3,560     Other expenses 4,037     Depreciation 2,218     Earnings before interest and taxes (EBIT) 2,385     Interest expense 635     Income before tax 1,750     Taxes (at 30%) 525     Net income 1,225     Dividends 746  
BALANCE SHEET
(Figures in millions of dollars) End of Year Start of Year   Assets      Cash and marketable securities 79        148             Receivables 1,882        2,290             Inventories
137        188             Other current assets 817        882                Total current assets 2,915        3,508             Net property, plant, and equipment 19,873        19,815             Other long-term assets 4,116        3,670                Total assets 26,904        26,993          Liabilities and shareholders Here are simplified financial statements of Phone Corporation from a recent year:

Explanation / Answer

Hi,

Please find the answer as follows:

Part A:

Market Capitalization = 74*195000000 = 14.43 billion

Market Value Added = 14.43 - 6.724 = 7.71 billion

Part B:

Market to Book Ratio = 14.43/6.724 = 2.15

Thanks.

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