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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
- 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?
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
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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