Full exam for Accounting, Finance & Control in the Management Engineering degree programme at Politecnico di Milano. The document covers: 1 ACCOUNTING, FINANCE & CONTROL Written Test - Call III – 28th June 2022 QUESTION 1 - (3 POINTS) ItaFoody Ltd is a multinational company competing in the food industry. You know the following data, as of December 31st, 2021: • EBIT = 360 mln€ • Income Taxes = 105 mln€ • Total
Full exam for Accounting, Finance & Control in the Management Engineering degree programme at Politecnico di Milano. The document covers: 1 ACCOUNTING, FINANCE & CONTROL Written Test - Call III – 28th June 2022 QUESTION 1 - (3 POINTS) ItaFoody Ltd is a multinational company competing in the food industry. You know the following data, as of December 31st, 2021: • EBIT = 360 mln€ • Income Taxes = 105 mln€ • Total
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1 ACCOUNTING, FINANCE & CONTROL Written Test - Call III – 28th June 2022 QUESTION 1 - (3 POINTS) ItaFoody Ltd is a multinational company competing in the food industry. You know the following data, as of December 31st, 2021: • EBIT = 360 mln€ • Income Taxes = 105 mln€ • Total Assets = 2,205 mln€ • Third Part Liabilities / Equity = 1.7 • ROE = 30% • ROI = 27% • Financial Income = 0 Which of the following statements is CORRECT? A. The average cost of financial debts is around – 1.9% B. The average cost of financial debts is around + 1.9% C. The average cost of financial debts is around + 0.8% D. The average cost of financial debts cannot be calculated with the available data Solution You can calculate Equity because you know that: - TPL / Equity = 1.7 - Total Assets = TPL + E = 2,205 Therefore: 1.7*Equity + Equity = 2,205 --> Equity = 816.67 mln€ Knowing Equity and ROE, you can get Net profit as ROE * Equity = 245 mln€ EBT = Net profit + Income taxes = 350 mln€ Financial expenses = EBIT – EBT = 10 mln€ Financial Liabilies = EBIT/ROI – Equity = 516.67 mln€ Average cost of financial debt = 10 mln€ / 516.67 mln€ = + 1.9% Wrong answers: A. The average cost of financial debts is calculated using at denominator the wrong sing B. Correct answer C. The average cost of financial debts is calculated considering TPL at the denominator D. The average cost of financial debts can be calculated with the available data 2 QUESTION 2 - (3 POINTS) Consider the data about ItaFoody Ltd given in the previous question as well as the following additional data, as of December 31st, 2021: • EBIT margin (also known as ROS) = 10.6% • Other operating income = 0 • Selling and Marketing expenses = 600 mln€ • General expenses = 50 mln€ • Administrative expenses = 200 mln€ • Outbound logistics expenses…
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