LAB 8 - BIGYAN BASAULA

Source: Statistics Canada - Small business profiles, 2020 Quartiles: Number of businesses 4485 Revenue range: Low Value ($000) 30 30 142 339 766 High Value ($000) 5000 142 339 766 5000 Revenues and expenses s of dollars) - Averages Total revenue 81.40 231.30 515.70 1710.30 100.00 Sales of goods and services 77.60 225.20 503.70 1680.30 98.70 All other revenues 3.90 6.20 12.00 29.90 31.10 Cost of sales (direct expenses) 20.80 73.90 189.60 788.10 80.10 Wages and benefits 4.00 18.30 53.10 245.70 35.90 Purchases, materials and sub-contracts 16.80 55.60 136.40 542.30 79.70 Opening inventory 0.30 2.40 1.70 7.60 5.70 Closing inventory 0.30 2.40 1.50 7.50 5.60 Operating expenses (indirect expenses) 58.00 136.80 277.10 748.60 99.90 Labour and commissions 17.80 51.50 111.40 285.80 76.10 Amortization and depletion 6.50 14.50 30.10 79.90 85.70 Repairs and maintenance 2.80 6.50 13.50 40.40 69.30 Utilities and telephone/telecommunication 2.60 4.90 8.30 19.00 88.80 Rent 3.90 8.80 20.60 59.60 76.80 Interest and bank charges 1.20 2.00 3.70 10.10 44.70 Professional and business fees 2.60 4.20 6.50 21.10 92.00 Advertising and promotion 1.60 3.50 6.40 19.20 86.50 Delivery, shipping and warehouse expenses 0.20 0.20 0.40 1.80 9.20 Insurance 3.30 7.60 14.40 38.30 88.00 Other expenses 15.40 33.10 61.90 173.40 99.30 Total expenses 78.80 210.70 466.70 1536.70 100.00 Net profit/loss 2.60 20.60 49.00 173.50 99.80 Balance sheet s of dollars) - Averages Total assets 143.90 201.40 381.90 1141.90 Total current assets 60.30 96.00 191.70 619.00 Accounts receivable 5.70 19.70 45.80 227.20 Closing inventory 2.00 3.50 7.10 39.10 Other current assets 52.60 72.90 138.80 352.70 Net tangible and intangible assets 58.70 91.70 154.30 444.40 All other assets and adjustments 24.90 13.60 35.80 78.40 Total liabilities 107.10 152.00 261.40 678.30 Total current liabilities 54.50 77.20 135.90 372.70 Current bank loans 5.90 10.10 13.70 28.30 Other current liabilities 48.60 67.10 122.20 344.40 Long term liabilities 52.60 74.80 125.50 305.60 Total equity 36.80 49.40 120.50 463.60 Averages Current ratio 1.50 1.10 1.20 1.40 1.70 Debt to equity ratio 1.80 2.90 3.10 2.20 1.50 Interest coverage ratio 15.50 3.10 11.40 14.30 18.30 Debt ratio 0.60 0.70 0.80 0.70 0.60 Revenue to equity ratio 3.80 2.20 4.70 4.30 3.70 Revenue to closing inventory ratio 49.10 41.50 66.80 72.80 43.70 Current debt to equity (%) 95.50 148.20 156.40 112.80 80.40 Net profit to equity (%) 36.70 7.00 41.80 40.70 37.40 Net fixed assets to equity (%) 111.80 159.70 185.70 128.10 95.90 Gross margin (%) 56.90 73.10 67.20 62.40 53.10 Return on total assets (%) 14.10 2.60 11.20 13.80 16.10 Collection period for accounts receivable (days) 42.90 25.40 31.10 32.40 48.50 Profile Revenue range Annual revenues $30,000 - $5,000,000 Provinces / Territory / Canada Ontario Incorporation status Incorporated businesses Note: Balance sheet information is only available for incorporated businesses under the incorporation status. Distribution by Total revenue Value in Thousands of dollars Data year: 2020 Industry NAICS 561730 - Landscaping services Legend for quality Indicators: Whole industry (reliability) Bottom quartile (25%) Lower middle (25%) Upper middle (25%) Top quartile (25%) Percentage of businesses reporting 634.7 C 621.7 C 13.0 B 268.1 C 80.3 C 187.8 C 3.0 C 2.9 C 305.1 C 116.6 C 32.7 C 15.8 C 8.7 E 23.2 C 4.2 E 8.6 E 7.7 E 0.6 E 15.9 C 71.0 E 573.2 C 61.4 C 467.2 C 241.8 C 74.6 E 12.9 E 154.3 C 187.3 C 38.2 C 299.7 C 160.1 C 14.5 E 145.6 E 139.6 C 167.6 C FINANCIAL RATIOS - DO NOT USE IN LAB, calculate own

Use proper quartile for benchmark! *calculate both FINANCIAL RATIOS Comments why is Krazy's better or worse?: Current ratio 1.16 1.24 Worse Debt to equity ratio 3.17 3.08 Worse Interest coverage ratio 12.83 11.30 Better Net profit to equity (%) (aka ROE) 39.1% 41.7% Worse Gross margin (%) 78.0% 68.1% Better Return on total assets (%) 9.4% 10.2% Worse 26.77 31.09 Better Net Profit Margin 5.5% 8.9% Worse 8 Marks 8 Marks 16 Marks Krazy's better or worse? Krazy's * Benchmark * It suggests that Krazy's may face difficulties in meeting its short-term obligations and may need to improve its liquidity position. It suggests that Krazy's may have a higher risk due to its relatively higher level of debt financing. A higher debt to equity ratio indicates higher financial leverage, which can increase both potential risks and returns. Having a higher interest coverage ratio is generally considered better because it implies that the company has more earnings available to cover its interest obligations. Because Krazy's may be less efficient in generating profits relative to its equity compared to the benchmark.Also a higher ROE indicates that a company is generating more profit with each unit of equity. Because a higher gross margin is generally considered better as it suggests that the company is able to generate more profit from each unit of sales after accounting for the cost of goods sold. Because a higher ROA indicates that a company is more efficient in generating profit from its assets. It reflects better utilization of assets to generate earnings. Collection period for accounts receivable (days) (Assume all sales on credit) Because a shorter collection period indicates that Krazy's is more efficient in collecting payments from its customers, which can improve cash flow and liquidity. Because a higher net profit margin shows that a company is more effective in controlling its expenses and generating profit from its revenue.