IB test accounting question
Hey all,
Applied for an IB analyst gig and was given this question in the written component of their test but couldn't figure it out. Can anyone solve this? Question was to figure out what all the letters should be.
I think the below is right but couldn't get the rest
A: (6) from interest paid and interest accrual
C: 2 from change in NWC on BS
D: (1) from tax paid and no change in tax accrual
E: (18) from plug to balance CFS
F: (11) from change in cash on BS
I: 6 from 2008 debt and change in debt
2009 P&L
Sales: 120
COGS: (71)
Distribution: (12)
SG&A: (27)
Interest: A
Tax: (1)
Net profit: B
2009 CFS
EBITDA: 16
Change NWC: C
Interest paid: (5)
Tax paid: D
Purchase of fixed assets: (5)
Change in debt: E
Net change in cash: F
2008 BS
Cash: 12
NWC: 26
Fixed assets: 58
Total assets: 96
Debt: 24
Interest accrual: 1
Tax accrual: 2
Equity: 69
Total equities and liabilities: 96
2009 BS
Cash: 1
NWC: 28
Fixed assets: G
Total assets: H
Debt: I
Interest accrual: 2
Tax accrual: 2
Equity: J
Total equities and liabilities: K
A: (6) - You accrued 1 dollar of interest and you paid out 5 dollars worth
B: 3 because 120 - 71 - 12 - 27 - 6 -1 = 3
C: (2) - Your NWC went up from 26 to 28, representing a cash outflow of 2 dollars
D: (1) - you paid $1 in tax from your income statement, and no change in accrual
E: (14) - from the equation 16 - 2 - 5 - 1 - 5 + E = -11
F: (11) - from the balance sheets
G: 63 - from 58 + 5
H: 92 - from 1 + 28 + 63
I: 10 from 24 - 14 = 10 (the 14 is negative on the CFS which means it was paid off
J: 78 from 92 - 2 - 2 - 10 = 78
K: 92 because A = L+SHE
Let me know what you think boss
Thanks for the response! Though shouldn’t the change in equity be equal to the net profit due to retained earnings?
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