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Pilot Limited supplies the following informations using which you are required to calculate the Economic Value Added : पाइलट लिमिटेड को निम्नलिखित सूचनाओं से आपको आर्थिक मूल्य-वर्धन की गणना करनी है : Financial Leverage Capital (Equity and Debt) 1.4 times Equity Shares of 1,000 each (number) 34,000 Accumulated Profit 260 lakh 10% Debentures of 10 each (number) 80 lakh Dividend expectations of equity shareholders 17.50% Prevailing Corporate Tax Rate 30%?
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Pilot Limited supplies the following informations using which you are ...
Calculation of Economic Value Added (EVA) for Pilot Limited:
Financial Leverage: Financial leverage refers to the use of debt to finance a company's operations. It is measured as the ratio of total debt to equity. In this case, the financial leverage of Pilot Limited is 1.4 times.
Capital (Equity and Debt): The total capital of a company is the sum of its equity and debt. In this case, the capital of Pilot Limited is determined by multiplying the equity shares by their value and adding the value of the debentures.
Equity capital = Number of equity shares × Face value per share
= 34,000 × ₹1,000
= ₹34,000,000
Debt capital = Number of debentures × Face value per debenture
= 80,00,000 × ₹10
= ₹8,000,000
Total capital = Equity capital + Debt capital
= ₹34,000,000 + ₹8,000,000
= ₹42,000,000
Accumulated Profit: Accumulated profit refers to the retained earnings of a company. In this case, the accumulated profit of Pilot Limited is ₹260,00,000.
Dividend expectations of equity shareholders: Dividend expectation is the percentage of profit that equity shareholders expect to receive as dividends. In this case, the dividend expectation of equity shareholders is 17.50%.
Prevailing Corporate Tax Rate: The prevailing corporate tax rate is the rate at which a company's profits are taxed. In this case, the prevailing corporate tax rate is 30%.
Calculation of Economic Value Added (EVA):
Economic Value Added (EVA) is a measure of a company's financial performance that calculates the value generated by the company in excess of the cost of capital.
EVA = Net Operating Profit After Tax (NOPAT) - (Capital × Cost of Capital)
Net Operating Profit After Tax (NOPAT):
NOPAT is calculated by subtracting the corporate tax from the operating profit of the company.
NOPAT = Operating Profit - Corporate Tax
Operating Profit: Operating profit is the profit earned from the core operations of the company. It is calculated by subtracting the operating expenses from the net sales.
Operating Profit = Net Sales - Operating Expenses
Cost of Capital: The cost of capital is the weighted average cost of equity and debt. It is calculated by multiplying the cost of equity and the cost of debt by their respective weights and summing them.
Cost of Equity = Dividend Expectation × Net Operating Profit After Tax (NOPAT) / Equity Capital
Cost of Debt = Interest Expense / Debt Capital
Summary:
- Financial Leverage: 1.4 times
- Equity Shares: 34,000
- Accumulated Profit: ₹260,00,000
- Debentures: 80,00,000
- Dividend Expectation: 17.50%
- Prevailing Corporate Tax Rate: 30%
Calculation:
1. Calculate Equity Capital: 34,000 × ₹1,000 = ₹34,000,000
2. Calculate Debt Capital: 80,00,000 ×
Financial Leverage: Financial leverage refers to the use of debt to finance a company's operations. It is measured as the ratio of total debt to equity. In this case, the financial leverage of Pilot Limited is 1.4 times.
Capital (Equity and Debt): The total capital of a company is the sum of its equity and debt. In this case, the capital of Pilot Limited is determined by multiplying the equity shares by their value and adding the value of the debentures.
Equity capital = Number of equity shares × Face value per share
= 34,000 × ₹1,000
= ₹34,000,000
Debt capital = Number of debentures × Face value per debenture
= 80,00,000 × ₹10
= ₹8,000,000
Total capital = Equity capital + Debt capital
= ₹34,000,000 + ₹8,000,000
= ₹42,000,000
Accumulated Profit: Accumulated profit refers to the retained earnings of a company. In this case, the accumulated profit of Pilot Limited is ₹260,00,000.
Dividend expectations of equity shareholders: Dividend expectation is the percentage of profit that equity shareholders expect to receive as dividends. In this case, the dividend expectation of equity shareholders is 17.50%.
Prevailing Corporate Tax Rate: The prevailing corporate tax rate is the rate at which a company's profits are taxed. In this case, the prevailing corporate tax rate is 30%.
Calculation of Economic Value Added (EVA):
Economic Value Added (EVA) is a measure of a company's financial performance that calculates the value generated by the company in excess of the cost of capital.
EVA = Net Operating Profit After Tax (NOPAT) - (Capital × Cost of Capital)
Net Operating Profit After Tax (NOPAT):
NOPAT is calculated by subtracting the corporate tax from the operating profit of the company.
NOPAT = Operating Profit - Corporate Tax
Operating Profit: Operating profit is the profit earned from the core operations of the company. It is calculated by subtracting the operating expenses from the net sales.
Operating Profit = Net Sales - Operating Expenses
Cost of Capital: The cost of capital is the weighted average cost of equity and debt. It is calculated by multiplying the cost of equity and the cost of debt by their respective weights and summing them.
Cost of Equity = Dividend Expectation × Net Operating Profit After Tax (NOPAT) / Equity Capital
Cost of Debt = Interest Expense / Debt Capital
Summary:
- Financial Leverage: 1.4 times
- Equity Shares: 34,000
- Accumulated Profit: ₹260,00,000
- Debentures: 80,00,000
- Dividend Expectation: 17.50%
- Prevailing Corporate Tax Rate: 30%
Calculation:
1. Calculate Equity Capital: 34,000 × ₹1,000 = ₹34,000,000
2. Calculate Debt Capital: 80,00,000 ×
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Pilot Limited supplies the following informations using which you are required to calculate the Economic Value Added : पाइलट लिमिटेड को निम्नलिखित सूचनाओं से आपको आर्थिक मूल्य-वर्धन की गणना करनी है : Financial Leverage Capital (Equity and Debt) 1.4 times Equity Shares of 1,000 each (number) 34,000 Accumulated Profit 260 lakh 10% Debentures of 10 each (number) 80 lakh Dividend expectations of equity shareholders 17.50% Prevailing Corporate Tax Rate 30%?
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Pilot Limited supplies the following informations using which you are required to calculate the Economic Value Added : पाइलट लिमिटेड को निम्नलिखित सूचनाओं से आपको आर्थिक मूल्य-वर्धन की गणना करनी है : Financial Leverage Capital (Equity and Debt) 1.4 times Equity Shares of 1,000 each (number) 34,000 Accumulated Profit 260 lakh 10% Debentures of 10 each (number) 80 lakh Dividend expectations of equity shareholders 17.50% Prevailing Corporate Tax Rate 30%? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about Pilot Limited supplies the following informations using which you are required to calculate the Economic Value Added : पाइलट लिमिटेड को निम्नलिखित सूचनाओं से आपको आर्थिक मूल्य-वर्धन की गणना करनी है : Financial Leverage Capital (Equity and Debt) 1.4 times Equity Shares of 1,000 each (number) 34,000 Accumulated Profit 260 lakh 10% Debentures of 10 each (number) 80 lakh Dividend expectations of equity shareholders 17.50% Prevailing Corporate Tax Rate 30%? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Pilot Limited supplies the following informations using which you are required to calculate the Economic Value Added : पाइलट लिमिटेड को निम्नलिखित सूचनाओं से आपको आर्थिक मूल्य-वर्धन की गणना करनी है : Financial Leverage Capital (Equity and Debt) 1.4 times Equity Shares of 1,000 each (number) 34,000 Accumulated Profit 260 lakh 10% Debentures of 10 each (number) 80 lakh Dividend expectations of equity shareholders 17.50% Prevailing Corporate Tax Rate 30%?.
Pilot Limited supplies the following informations using which you are required to calculate the Economic Value Added : पाइलट लिमिटेड को निम्नलिखित सूचनाओं से आपको आर्थिक मूल्य-वर्धन की गणना करनी है : Financial Leverage Capital (Equity and Debt) 1.4 times Equity Shares of 1,000 each (number) 34,000 Accumulated Profit 260 lakh 10% Debentures of 10 each (number) 80 lakh Dividend expectations of equity shareholders 17.50% Prevailing Corporate Tax Rate 30%? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about Pilot Limited supplies the following informations using which you are required to calculate the Economic Value Added : पाइलट लिमिटेड को निम्नलिखित सूचनाओं से आपको आर्थिक मूल्य-वर्धन की गणना करनी है : Financial Leverage Capital (Equity and Debt) 1.4 times Equity Shares of 1,000 each (number) 34,000 Accumulated Profit 260 lakh 10% Debentures of 10 each (number) 80 lakh Dividend expectations of equity shareholders 17.50% Prevailing Corporate Tax Rate 30%? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Pilot Limited supplies the following informations using which you are required to calculate the Economic Value Added : पाइलट लिमिटेड को निम्नलिखित सूचनाओं से आपको आर्थिक मूल्य-वर्धन की गणना करनी है : Financial Leverage Capital (Equity and Debt) 1.4 times Equity Shares of 1,000 each (number) 34,000 Accumulated Profit 260 lakh 10% Debentures of 10 each (number) 80 lakh Dividend expectations of equity shareholders 17.50% Prevailing Corporate Tax Rate 30%?.
Solutions for Pilot Limited supplies the following informations using which you are required to calculate the Economic Value Added : पाइलट लिमिटेड को निम्नलिखित सूचनाओं से आपको आर्थिक मूल्य-वर्धन की गणना करनी है : Financial Leverage Capital (Equity and Debt) 1.4 times Equity Shares of 1,000 each (number) 34,000 Accumulated Profit 260 lakh 10% Debentures of 10 each (number) 80 lakh Dividend expectations of equity shareholders 17.50% Prevailing Corporate Tax Rate 30%? in English & in Hindi are available as part of our courses for B Com.
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Pilot Limited supplies the following informations using which you are required to calculate the Economic Value Added : पाइलट लिमिटेड को निम्नलिखित सूचनाओं से आपको आर्थिक मूल्य-वर्धन की गणना करनी है : Financial Leverage Capital (Equity and Debt) 1.4 times Equity Shares of 1,000 each (number) 34,000 Accumulated Profit 260 lakh 10% Debentures of 10 each (number) 80 lakh Dividend expectations of equity shareholders 17.50% Prevailing Corporate Tax Rate 30%?, a detailed solution for Pilot Limited supplies the following informations using which you are required to calculate the Economic Value Added : पाइलट लिमिटेड को निम्नलिखित सूचनाओं से आपको आर्थिक मूल्य-वर्धन की गणना करनी है : Financial Leverage Capital (Equity and Debt) 1.4 times Equity Shares of 1,000 each (number) 34,000 Accumulated Profit 260 lakh 10% Debentures of 10 each (number) 80 lakh Dividend expectations of equity shareholders 17.50% Prevailing Corporate Tax Rate 30%? has been provided alongside types of Pilot Limited supplies the following informations using which you are required to calculate the Economic Value Added : पाइलट लिमिटेड को निम्नलिखित सूचनाओं से आपको आर्थिक मूल्य-वर्धन की गणना करनी है : Financial Leverage Capital (Equity and Debt) 1.4 times Equity Shares of 1,000 each (number) 34,000 Accumulated Profit 260 lakh 10% Debentures of 10 each (number) 80 lakh Dividend expectations of equity shareholders 17.50% Prevailing Corporate Tax Rate 30%? theory, EduRev gives you an
ample number of questions to practice Pilot Limited supplies the following informations using which you are required to calculate the Economic Value Added : पाइलट लिमिटेड को निम्नलिखित सूचनाओं से आपको आर्थिक मूल्य-वर्धन की गणना करनी है : Financial Leverage Capital (Equity and Debt) 1.4 times Equity Shares of 1,000 each (number) 34,000 Accumulated Profit 260 lakh 10% Debentures of 10 each (number) 80 lakh Dividend expectations of equity shareholders 17.50% Prevailing Corporate Tax Rate 30%? tests, examples and also practice B Com tests.
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