CFA II - Reading 14 Financial Statement
Modeling (2)
Cash tax rate - ANS-Cash taxes paid as a percent of pretax earnings
Confirmation bias & Prevention - ANS-a tendency to look for facts that supports our
preconceptions and to disregard or distort contradictory proof
B2P175
Conservatism (Anchoring) bias & prevention - ANS-A faulty heuristic as a result of basing an
estimate on a totally unrelated quantity.
Faulty heuristic in that you fixate on a single factor of a hassle to discover a solution
B2P175
Cynbo Industries Limited operates in nations Mazat and Napat. The effective tax quotes of
Cynbo's operations in Mazat and Napat are 15% and 22% respectively. For the maximum
recent financial year, Cynbo pronounced earnings before tax of $350 and $2 hundred for Mazat
and Napat respectively. For the subsequent yr, it's far anticipated that Cynbo's income will
develop at 5% and eight% for Mazat and Napat respectively. The effective tax charge for Cynbo
for the subsequent economic 12 months is closest to: - ANS-Given the increase forecasts,
Cynbo's forecasted income before tax, taxes and earnings after tax are 583.50, 102.65, and
480.86 respectively. Effective tax fee = 102.65/583.50 = 17.60%
Current PBT Growth Rate E(PBT) Tax Rate Tax EAT
Mazat 350 5% 367.50 15% fifty five.Thirteen 312.38 Napat two hundred 8% 216.00 22% forty
seven.52 168.48 Total 550 583.50 102.Sixty five 480.86
Deluxe Toys Inc. Produces digital toys for 2-12 12 months olds. Ben Sharpe, Analyst with AP
Partners, is forecasting Deluxe's working income for the following monetary yr. Sharpe notices
that Deluxe's selling charges have expanded from 5% of sales to 8% of sales over last few
years. This is maximum probable to be because of the force(s) of: - ANS-Intra-industry
contention and chance of substitutes.
Increased selling costs are regular with an funding in constructing emblem loyalty, that is the
suitable response to a threat of substitutes and intra-enterprise competition. By spending more
Modeling (2)
Cash tax rate - ANS-Cash taxes paid as a percent of pretax earnings
Confirmation bias & Prevention - ANS-a tendency to look for facts that supports our
preconceptions and to disregard or distort contradictory proof
B2P175
Conservatism (Anchoring) bias & prevention - ANS-A faulty heuristic as a result of basing an
estimate on a totally unrelated quantity.
Faulty heuristic in that you fixate on a single factor of a hassle to discover a solution
B2P175
Cynbo Industries Limited operates in nations Mazat and Napat. The effective tax quotes of
Cynbo's operations in Mazat and Napat are 15% and 22% respectively. For the maximum
recent financial year, Cynbo pronounced earnings before tax of $350 and $2 hundred for Mazat
and Napat respectively. For the subsequent yr, it's far anticipated that Cynbo's income will
develop at 5% and eight% for Mazat and Napat respectively. The effective tax charge for Cynbo
for the subsequent economic 12 months is closest to: - ANS-Given the increase forecasts,
Cynbo's forecasted income before tax, taxes and earnings after tax are 583.50, 102.65, and
480.86 respectively. Effective tax fee = 102.65/583.50 = 17.60%
Current PBT Growth Rate E(PBT) Tax Rate Tax EAT
Mazat 350 5% 367.50 15% fifty five.Thirteen 312.38 Napat two hundred 8% 216.00 22% forty
seven.52 168.48 Total 550 583.50 102.Sixty five 480.86
Deluxe Toys Inc. Produces digital toys for 2-12 12 months olds. Ben Sharpe, Analyst with AP
Partners, is forecasting Deluxe's working income for the following monetary yr. Sharpe notices
that Deluxe's selling charges have expanded from 5% of sales to 8% of sales over last few
years. This is maximum probable to be because of the force(s) of: - ANS-Intra-industry
contention and chance of substitutes.
Increased selling costs are regular with an funding in constructing emblem loyalty, that is the
suitable response to a threat of substitutes and intra-enterprise competition. By spending more
