Case study: Financial ratios

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School of Business Administration

Fall 2009
Case consume


FIN 5305




Case study: Financial ratios

You’ve been recently employ as a financial analyst by conscription Industries, a manufacturer of
electronic calculators. Your first task was to mete out a financial analysis of the firm
covering the drop dead two years. To begin, you gathered the following financial statements
and other data.





match SHEETS 2008 2007

Assets:
Cash $52,000 $57,600
Accounts receivable 402,000 351,200
Inventories 836,000 715,200
center authorized assets $1,290,000 $1,124,000
Gross furbish up assets $ 527,000 $491,000
Less accumulated depreciation 166,200 146,200
Net fixed assets $360,800 $344,800
follow assets $1 650 800 $1468800

Liabilities and Equity:
Accounts payable 175,200 145,600
Notes payable 225,000 200,000
Accruals 140,000 136,000
Total current liabilities $540,200 $481,600
Long-term debt $424,612 $323,432
Common song (100,000 shares) $460,000 $460,000
Retained earnings 225,988 203,768
Total equity $685,988 $663,768
Total liabilities and equity $1650800 $1,468,800

INCOME STATEMENTS
Sales $3,850,000 $3,432,000
Cost of goods exchange $3,250,000 $2,864,000
Other expenses 430,300 340,000 Depreciation 20,000 18,900
Total operating costs $3,700,300 $3,222,900
EBIT $149,700 $ 209,100
relate expense 76,000 62,500
EBT $73,700 $ 146,600
Taxes (40%) 29,480 58,640
Net income $44,220 $87,960

EPS $0,442 $0,880

Other Data..
December 31 stock price $6.00 $8.50
Number of shares 100,000 100,000
Dividends per share $0.22 $0.22
Lease payments $40,000 $40,000

STATEMENT OF cash FLOWS FOR 2008

Operating Activities:
Net income $ 44,220
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