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Financial Analysis Assignment




Question;Financial Analysis(5)1. When evaluating any investment in a firm what is the key goal that you want to examine andassess?(10)2. Mayport Industries is a well-respected and high growth firm in the communications equipmentmanufacturing industry. This is, and is expected to continue to be, a very strong growth industry.Mayport is also well known for its highly efficient production & marketing operations. Over thenext 12 18 months, what would you expect Mayports needs and issues to be?(10)3. After years of dominance by domestic firms in your industry, there are increasing signals of acompetitive shift. Notably, there is an increasing incursion of Southeast Asia firms, and they areproducing both a high caliber and lower cost product line. What are the implications for your firmand its management AND what do you recommend the firm do?(10)4. Elmer Corp. has approached your firm for a loan. They are pursuing a 5 yr loan intended tosupport the expansion of their operations. Elmer Corp. is a very well established and a veryhighly regarded firm in its industry. But it is a brand new customer for your firm and you have littleunderstanding of their business. Before preparing a full analysis, what key information do youneed to obtain & understand?(5)5. What is the most important cash flow measure of any business? Why?(10)6. You have been asked to provide business advice to a firm that is in a highly competitive butmature industry environment. Despite their highly efficient operations and relatively tight cashposition, they very much want to boost their sales. They believe the best way to accomplish this isto extend the required customer payment periods and are ready to pursue this course of action.For your review: assess and evaluate this plan and its implications for the firm.(10)7. Your firm has been asked to invest in a new, early stage firm. The firm is in a brand new industryand, although the firm is still in its early stages, it believes it has a very promising new product.Other new firms are also in this industry and also have their own new products. At this stage, longterm demand for products in this industry are expected to be strong.You have been asked to evaluate this situation for your firm before they make any investment.What are your recommendations and why?(10)8. Corey & Jones Corp. is a well-established firm with a long term history of moderate but positiveperformance. The firm produces high precision valves and has a very strong reputation with itscustomers, who incorporate the valves into their products. Notably their regional marketing hasbeen very solid and reflects both their quality and their well-developed marketing and salesrelationships. Very importantly, repeat customers dominate the firms sales. However, the firm isalso in a highly competitive regional market, where competition is fierce, and annual sales havestabilized at a relatively flat $5 million per year.The Firm recognizes its need to expand and grow sales in order to further develop and sustain itsbusiness. They realize that to accomplish this they must expand their customer base beyond thecurrent regional market. They also believe they have sufficient production capacity to support a50% sales increase before any need to add new equipment.You have been asked to review the firm, assess their plan, and provide recommendations for aneffective strategy to support the expansion.(10)9. Sara Corp. is a well-established industrial component firm. Reflecting its history, the firm producesto order and has a low fixed cost & high variable cost operational structure. The Firm now wishesto move forward and pursue a very high growth strategy. You have been asked to review the firmfrom a production perspective and then provide recommendations and guidance to itsmanagement.Question #10 involves the evaluation of Johnson Controls. Attached are copies of their IncomeStatements & Balance Sheets that are to be used in your evaluations.(10)10. Measure and assess the Cash Conversion Cycle for 2011 and 2012. What are the cyclesdynamics in 2011, 2012? What are the firms short-term needs? What are the longer termconsiderations?Johnson ControlsIncome StatementBalance Sheet20111,200,000795,000405,00020121,300,000860,000440,000129,98647,511125,21949,346Total Curr AssetsTotal Oper Expenses177,497174,565Gross FALess Accum DeprecEBIT227,503265,43519,35217,204208,151248,23183,26099,292EAT124,891148,939EACS124,891148,939SalesCGSGross ProfitMktg, G&ADepreciationInterest ExpenseEBTIncome taxCommon Dividends55,0002011Net Fixed Assets70,000135,000145,000295,000-201275,000110,000110,000AssetsCashA/RInventory350,000795,000 811,098(395,000) (434,000)400,000377,098695,000727,09870,00021,00042,00072,00018,15936,000133,000126,159275,000220,000408,000346,159Common StockRet EarningsTotal Equity48,000239,000287,00048,000332,939380,939Total Liab & Equity695,000727,098Total AssetsA/PNotes PayableAccrualsTotal Curr LiabLTDTotal Liabilities


Paper#48359 | Written in 18-Jul-2015

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