Tater and Pepper Corp. reported free cash flows for 2015 of $54.1 million and investment in operating capital of $37.1 million. Tater and Pepper incurred $15.1 million in depreciation expense and paid $20.1 million in taxes on EBIT in 2015.
Calculate Tater and Pepper’s 2015 EBIT.
To calculate Tater and Pepper's 2015 EBIT (Earnings Before Interest and Taxes), you need to use the following formula:
EBIT = Free Cash Flows + Depreciation Expense + Taxes on EBIT
In the given information, we have the values for Free Cash Flows and Depreciation Expense. However, we need to find Taxes on EBIT. One way to find Taxes on EBIT is by using the Tax Rate and EBIT equation:
Taxes on EBIT = Tax Rate * EBIT
Unfortunately, we don't have the Tax Rate provided in the given information. Without the Tax Rate, we cannot calculate Tater and Pepper's 2015 EBIT accurately.
To find the Tax Rate, you would need to have additional information, such as the company's net income and the tax expense. With these numbers, you can calculate the Tax Rate using the formula:
Tax Rate = Tax Expense / Net Income
Once you have the Tax Rate, you can proceed to calculate Tater and Pepper's 2015 EBIT using the formulas mentioned above.