Financial Analysis
Analysis of Financial Statements Balance Sheets EXHIBITS: INPUT DATA (XYZ) Table 1 Balance Sheets 2013E 2012 2011 Assets Cash $ 85,632 $ 7,282 $ 57,600 Accounts receivable 878,000 632,160 351,200 Inventories 1,716,480 1,287,360 715,200 Total current assets $2,680,112 $1,926,802 $ 1,124,000 Gross fixed assets 1,197,160 1,202,950 491,000 Less: accumulated depreciation 380,120 263,160 146,200 Net fixed assets $ 817,040 $ 939,790 $ 344,800 Total assets $3,497,152 $2,866,592 $ 1,468,800 Liabilities and equity Accounts payable $ 436,800 $ 524,160 $ 145,600 Notes payable 300,000 636,808 200,000 Accruals 408,000 489,600 136,000 Total current liabilities $1,144,800 $1,650,568 $ 481,600 Long -term bonds 400,000 723,432 323,432 Total debt $1,544,800 $2,374,000 $ 805,032 Common stock (100,000 shares) 1,721,176 460,000 460,000 Retained earnings 231,176 32,592 203,768 Total common equity $1,952,352 $ 492,592 $ 663,768 Total liabilities and equity $3,497,152 $2,866,592 $ 1,468,800 Analysis of Financial Statements Income Statements Table 2 Income Statements 2013E 2012 2011 Sales $7,035,600 $6,034,000 $ 3,432,000 Cost of goods sold 5,875,992 5,528,000 2,864,000 Other expenses 550,000 519,988 358,672 Total operating exp. excl. depreciation and amortization $6,425,992 $6,047,988 $ 3,222,672 EBITDA $ 609,608 $ (13,988) $ 209,328 Depreciation and amortization 116,960 116,960 18,900 Earnings before interest and taxes (EBIT) $ 492,648 $ (130,948) $ 190,428 Interest expense 70,008 136,012 43,828 Earnings before taxes (EBT) $ 422,640 $ (266,960) $ 146,600 Taxes (40%) 169,056 (106,784) 58,640 Net Income $ 253,584 $ (160,176) $ 87,960 Earnings per share (EPS) $ 1.014 $ (1.602) $ 0.880 Dividends per share (DPS) $ 0.220 $ 0.110 $ 0.220 Book value per share (BVPS) $ 7.809 $ 4.926 $ 6.638 Stock price $ 12.17 $ 2.25 $ 8.50 Shares outstanding 250,000 100,000 100,000 Tax rate 40.00% 40.00% 40.00% Lease payments $ 40,000 $ 40,000 $ 40,000 Sinking fund payments 0 0 0 Analysis of Financial Statements Ratio Analysis Industry 2013E 2012 2011 Average Current ratio * 1.2 2.3 2.7 Quick ratio * 0.4 0.8 1.0 Inventory turnover * 4.7 4.8 6.1 Days sales outstanding (DSO) * 38.2 37.4 32.0 Fixed assets turnover * 6.4 10.0 7.0 Total assets turnover * 2.1 2.3 2.6 Debt -to-assets ratio * 82.8% 54.8% 50.0% Times interest earned (TIE) * -1.0 4.3 6.2 Operating margin * -2.2% 5.6% 7.3% Profit margin * -2.7% 2.6% 3.5% Basic earning power (BEP) * -4.6% 13.0% 19.1% Return on assets (ROA) * -5.6% 6.0% 9.1% Return on equity (ROE) * -32.5% 13.3% 18.2% Price/earnings (P/E) * -1.4 9.7 14.2 Market/book (M/B) * 0.5 1.3 2.4 Book value per share (BVPS) * $4.93 $6.64 n.a. *The calculations from your module 2 assignment would complete column 2013E. You are not required to complete the ratio analysis chart as part of your assignment, you will submit the calculations with rationale in a word document.