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Comment on the performance of Bart D’Souza’s company. How is the company doing? He is working at this business part-time.  Should he quit his other job and work at this full-time?  Should he do the opposite – and exit the business?  Or, should he stay the course and see how things unfold?  What other kinds of information might you want to know to answer these questions?

Comment on the performance of Bart D’Souza’s company. How is the company doing? He is working at this business part-time.  Should he quit his other job and work at this full-time?  Should he do the opposite – and exit the business?  Or, should he stay the course and see how things unfold?  What other kinds of information might you want to know to answer these questions?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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  1. Comment on the performance of Bart D’Souza’s company. How is the company doing? He is working at this business part-time.  Should he quit his other job and work at this full-time?  Should he do the opposite – and exit the business?  Or, should he stay the course and see how things unfold?  What other kinds of information might you want to know to answer these questions? 
ANNETILIA ML. ναιιανιαιινιωιωι WINES Comparative Income Statement ($M) For the Years Ended Dec 31, 2009 to 2014 Sales Cost of Goods Sold Gross Profit Selling and Administration Depreciation Operating Profit Interest Earnings Before Taxes Taxes Net Income 2011 2012 2013 2014 $725.45 $793.34 $814.55 $856.00 2009 2010 $287.14 $299.45 $209.69 $210.45 $506.91 $559.53 $595.34 $629.43 $ 77.45 $ 89.00 $218.54 $233.81 $219.21 $226.57 $ 57.34 $60.06 $104.14 $125.53 $136.57 $160.23 $7.53 $13.54 $21.54 $ 20.89 $21.22 $26.54 $ 12.58 $15.40 $ 92.86 $ 87.39 $61.42 $ 39.80 $9.41 $ 12.53 $35.51 $24.67 $17.96 $13.01 $ 3.17 $2.87 $57.35 $ 62.72 $ 43.46 $26.79 1.01 $0.92 $18.35 $20.07 $13.91 $ 8.57 $ 2.16 $ 1.95 $39.00 $42.65 $29.55 $18.22 $ tax rate 32% 1 - tax rate 68% Net Income +1(1-tax rate) $ 8.57 Cash A/R Inventory Appendix A2: Canadian Motorbikes Comparative Balance Sheet ($M) For the Years Ended Dec 31, 2009 to 2014 2009 Total Current Assets Land, Plant and Equipment Other Assets Total Assets 32% 68% $10.46 $ 63.15 A/P Current Portion of LT Debt Total Current Liabilities Long-term Debt Total Liabilities Shareholders' Equity Total Liabilities and Equities 32% 68% 32% 32% 32% 68% 68% 68% $59.43 $ 41.76 $ 27.07 2011 2014 2010 2012 2013 $ 10.76 $ 20.56 $ 25.78 $ 38.55 $ 34.21 $ 29.75 $ 45.01 $ 48.54 $ 84.89 $ 85.39 $ 95.32 $ 99.23 $ 17.12 $79.66 $ 82.69 $ 79.30 $ 53.88 $ 75.33 $72.89 $148.76 $193.36 $203.24 $183.41 $204.31 $ 54.32 $ 162.28 $184.18 $ 178.01 $ 182.74 $211.48 $ 2.47 $ 5.39 $ 8.38 $ 8.82 $9.49 $ 11.65 $129.68 $316.43 $385.92 $390.07 $375.64 $427.44 $ 53.77 $ 90.73 $112.15 $109.96 $129.04 $189.84 $ 2.88 $ 18.09 $ 18.77 $ 14.32 $ 8.56 $ 6.22 $ 52.82 $185.45 $193.84 $161.98 $109.47 $294.27 $324.76 $286.26 $ 20.21 $ 22.16 $ 61.16 $ 103.81 $129.68 $316.43 $385.92 $390.07 $ 56.65 $108.82 $130.92 $124.28 $137.60 $ 196.06 $104.68 $ 79.80 $242.28 $275.86 $ 133.36 $ 151.58 $375.64 $427.44
Transcribed Image Text:ANNETILIA ML. ναιιανιαιινιωιωι WINES Comparative Income Statement ($M) For the Years Ended Dec 31, 2009 to 2014 Sales Cost of Goods Sold Gross Profit Selling and Administration Depreciation Operating Profit Interest Earnings Before Taxes Taxes Net Income 2011 2012 2013 2014 $725.45 $793.34 $814.55 $856.00 2009 2010 $287.14 $299.45 $209.69 $210.45 $506.91 $559.53 $595.34 $629.43 $ 77.45 $ 89.00 $218.54 $233.81 $219.21 $226.57 $ 57.34 $60.06 $104.14 $125.53 $136.57 $160.23 $7.53 $13.54 $21.54 $ 20.89 $21.22 $26.54 $ 12.58 $15.40 $ 92.86 $ 87.39 $61.42 $ 39.80 $9.41 $ 12.53 $35.51 $24.67 $17.96 $13.01 $ 3.17 $2.87 $57.35 $ 62.72 $ 43.46 $26.79 1.01 $0.92 $18.35 $20.07 $13.91 $ 8.57 $ 2.16 $ 1.95 $39.00 $42.65 $29.55 $18.22 $ tax rate 32% 1 - tax rate 68% Net Income +1(1-tax rate) $ 8.57 Cash A/R Inventory Appendix A2: Canadian Motorbikes Comparative Balance Sheet ($M) For the Years Ended Dec 31, 2009 to 2014 2009 Total Current Assets Land, Plant and Equipment Other Assets Total Assets 32% 68% $10.46 $ 63.15 A/P Current Portion of LT Debt Total Current Liabilities Long-term Debt Total Liabilities Shareholders' Equity Total Liabilities and Equities 32% 68% 32% 32% 32% 68% 68% 68% $59.43 $ 41.76 $ 27.07 2011 2014 2010 2012 2013 $ 10.76 $ 20.56 $ 25.78 $ 38.55 $ 34.21 $ 29.75 $ 45.01 $ 48.54 $ 84.89 $ 85.39 $ 95.32 $ 99.23 $ 17.12 $79.66 $ 82.69 $ 79.30 $ 53.88 $ 75.33 $72.89 $148.76 $193.36 $203.24 $183.41 $204.31 $ 54.32 $ 162.28 $184.18 $ 178.01 $ 182.74 $211.48 $ 2.47 $ 5.39 $ 8.38 $ 8.82 $9.49 $ 11.65 $129.68 $316.43 $385.92 $390.07 $375.64 $427.44 $ 53.77 $ 90.73 $112.15 $109.96 $129.04 $189.84 $ 2.88 $ 18.09 $ 18.77 $ 14.32 $ 8.56 $ 6.22 $ 52.82 $185.45 $193.84 $161.98 $109.47 $294.27 $324.76 $286.26 $ 20.21 $ 22.16 $ 61.16 $ 103.81 $129.68 $316.43 $385.92 $390.07 $ 56.65 $108.82 $130.92 $124.28 $137.60 $ 196.06 $104.68 $ 79.80 $242.28 $275.86 $ 133.36 $ 151.58 $375.64 $427.44
Appendix A3: Canadian Motorbikes Industry Averages Current Ratio Cash Ratio Inventory Turnover (days) A/R Turnover (days) A/P Turnover (days) Cash Conversion Cycle Fixed Assets Turnover Total Assets Turnover Debt Ratio Times Interest Earned Gross Profit Margin Operating Profit Margin Net Profit Margin Retum on Assets Retum on Equity 1.25 0.27 44.12 32.45 60.23 16.35 3.72 2.05 0.54 9.33 32.00% 14.00% 8.50% 17.46% 38.25%
Transcribed Image Text:Appendix A3: Canadian Motorbikes Industry Averages Current Ratio Cash Ratio Inventory Turnover (days) A/R Turnover (days) A/P Turnover (days) Cash Conversion Cycle Fixed Assets Turnover Total Assets Turnover Debt Ratio Times Interest Earned Gross Profit Margin Operating Profit Margin Net Profit Margin Retum on Assets Retum on Equity 1.25 0.27 44.12 32.45 60.23 16.35 3.72 2.05 0.54 9.33 32.00% 14.00% 8.50% 17.46% 38.25%
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