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04 The following are summary income statement and balance sheet numbers for a firm (in millions of dollars). The firm has a required return for operations of 9% 2019 2020 Sales Operating expenses Operating income Net financial expenses Comprehensive earning 2064 1964 100 2147 1937 210 92 201 1022 Net operating assets Net financial obligations Common share equity 175 1063 120 943 247 (vi) Required: (a) Prepare a table for 2020 showing the following: Return on common equity (ROCE) Return on net operating assets (RNOA) (11) Free cash flow (iv) Net payments to common shareholders (v) Net payments to net debt holders Asset turnover (vii) Net profit margin Growth rate for net operating assets Use beginning-of-period balance sheet numbers in denominators Calculate answers in terms up to 2 decimal points (8 marks) (b) On the basis of these financial statements, forecast SF3: 0) Abnormal operating income for 2021. Growth rate of abnormal operating income for 2022 (1) Abnormal caring for 2021 given cost of equity - 14.76% (iv) Growth rate of abnormal earnings for 2022 (8 marks) (e) Value the equity as at end of 2020 using the two methods: Abnormal operating income valuation Abnormal camning valuation given cost of equity - 14.76% (9 marks) 04 The following are summary income statement and balance sheet numbers for a firm (in millions of dollars). The firm has a required return for operations of 9% 2019 2020 Sales Operating expenses Operating income Net financial expenses Comprehensive earning 2064 1964 100 2147 1937 210 92 201 1022 Net operating assets Net financial obligations Common share equity 175 1063 120 943 247 (vi) Required: (a) Prepare a table for 2020 showing the following: Return on common equity (ROCE) Return on net operating assets (RNOA) (11) Free cash flow (iv) Net payments to common shareholders (v) Net payments to net debt holders Asset turnover (vii) Net profit margin Growth rate for net operating assets Use beginning-of-period balance sheet numbers in denominators Calculate answers in terms up to 2 decimal points (8 marks) (b) On the basis of these financial statements, forecast SF3: 0) Abnormal operating income for 2021. Growth rate of abnormal operating income for 2022 (1) Abnormal caring for 2021 given cost of equity - 14.76% (iv) Growth rate of abnormal earnings for 2022 (8 marks) (e) Value the equity as at end of 2020 using the two methods: Abnormal operating income valuation Abnormal camning valuation given cost of equity - 14.76% (9 marks)

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