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Financial Statement Analysis MG 770 Final Exam ? Fall 2014 Part 2 - Problem Solving

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Question;Financial;Statement Analysis;MG;770;Final Exam ?;Fall 2014;Part 2 - Problem;Solving ?;All;Answers to be submitted on Excel Answer Sheet;(show work or use formulas when;appropriate);Use;the following information about XYZ Plumbing (FY=12/31), a public company with;the most recent;closing;stock price of $5.00, to answer the following three problems;-;------------------------------------------------------------------------------------------------------;Income;Statement;2012;2013;Revenue;$;10,000,000;$;12,000,000;CGS;4,000,000;4,800,000;Gross;Profit;$;6,000,000;$;7,200,000;SG&A;1,800,000;2,000,000;R&D;1,000,000;1,000,000;Deprec;Amort;500,000;550,000;Total Op.;Expense;3,300,000;3,550,000;Operating;Profit;$;2,700,000;$;3,650,000;Interest cost;520,000;600,000;Interest income;90,000;110,000;Pre-Tax;$;2,270,000;$;3,160,000;Tax (35% rate);794,500;1,106,000;Net Income;$;1,475,500;$;2,054,000;EPS - Basic;$;0.15;$;0.21;Average Shares;Outstanding;10,000,000;10,000,000;Balance Sheet;2012;2013;2013;2013;ASSETS;LIABILITIES;Cash;3,000,000;4,154,000;Accounts;Payable;500,000;500,000;A/R;1,000,000;1,500,000;Notes Payable;1,500,000;1,000,000;Inventory;2,000,000;2,300,000;Current portion;of LTD;1,000,000;1,000,000;Pre-paid;expenses;500,000;670,000;Accrued;Liabilities;500,000;520,000;Total Current;Assets;6,500,000;8,624,000;Total Current;Liabilities;3,500,000;3,020,000;Building and;Improvements;15,000,000;15,000,000;Long-Term Debt;12,000,000;14,000,000;Equipment;5,000,000;7,000,000;20,000,000;22,000,000;Stockholder's;Equity;Common Stock at;Par;100,000;100,000;Depreciation;500,000;1,050,000;Paid in Capital;9,900,000;9,900,000;Net PP&E;19,500,000;20,950,000;Retained;Earnings;500,000;2,554,000;Total;Stockholder's Equity;10,500,000;12,554,000;Total;Assets;26,000,000;29,574,000;Total;Liabilities + Equity;26,000,000;29,574,000;Financial;Statements - Final Exam Fall 2014 - 1 -;1.;(26 Points);Complete;the following cash Flow Statement for XYZ Plumbing for 2013;Statement of Cash;Flows;2013;Net Income;Adjustments;Depreciation and amortization;Cash Provided by Operating Assets;and Liabilities;Accounts Receivable;Inventories;Pre-paid expenses;Accounts payable;Accrued liabilities;Net Cash provided (used) by;operating activities;Cash Provided from Investing;Activities;Additions to property, plant and;equipment;Net Cash provided (used) by;investing activities;Cash Provided from Financing;Activities;Additions to long term borrowing;Addition to short term borrowing;Net Cash provided (used) by;financing activities;Net Cash Flow;2.;6 Points);Calculate the;following ratios for 2013;2013;Current;Ratio;Accounts;Receivable turnover Inventory turnover;Revenue;to Cash Return on Assets Return on Equity;Financial;Statements - Final Exam Fall 2014 - 2 -;3.;(18 Points,1 point for each correct box except diluted shares -;6 points);3.);Fill in the projections for XYZ for 2003, based on the following assumptions;1.;Revenue grows by 20% between 2013 and;2014.;2.;Gross Margins remain at;2013 levels.;3.;SG&A improves by 1% (as a % of;revenue);4.;R&D increases by 20%.;5.;Depreciation and Amortization costs do;not change between 2013 and 2014.;6.;Interest costs and expenses are given in;the table.;7.;The tax rate remains constant.;8.;Options and Warrants are listed in the;following table;Options;Amount;Exercise Price;Public;Warrants;Amount;Exercise Price;Officers and Directors;2,000,000;$2.00;Shareholders;4,000,000;$3.00;2014E;Revenue;CGS;Gross Profit;SG&A;R&D;Deprec;Amort;Total Op.;Expense;Operating Profit;Interest cost;Interest income;Pre-Tax;Tax (35% rate);Net Income;EPS - Basic;EPS - Diluted;Financial;Statements - Final Exam Fall 2014 - 3 -

 

Paper#45721 | Written in 18-Jul-2015

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