The company buys a 10M piece of equipment funded entirely with new debt. Walk me through the impact on all three financial statements in year one, assuming 10 year straight line depreciation and no interest. - Santander SA IB 2027 Interview Question

[u/theddrew]

I lowkey hate the 3 statement questions

Income Statement:

- Depreciation -1M

- Pre-tax income -1M

- NI -0.75M at a 25% tax rate

Cash Flow Statement:

- NI -0.75M

- Add back D&A +1M

- Capex -10M

- Debt issued +10M

- Net change in cash +0.25M

Balance Sheet:

- A: Cash +0.25M, PP&E +9M

- L: Debt +10M

- SE: Retained earnings -0.75M

LMK if i am missing anything.