FINANCIAL STATEMENT ANALYSIS DATA INFORMATION Statement of Financial Position of cf company 2015 2016 Cash and Cash Equivalents $ 990,000.00 $ 950,000.00 Short Term Marketable Securities $ 10,000.00 $ 15,000.00 Accounts Receivable $ 1,020,000.00 $ 1,550,000.00 Inventory $ 1,005,000.00 $ 1,360,000.00 Other Current Assets $ 870,000.00 $ 1,150,000.00 Total Current Assets $ 3,895,000.00 $ 5,025,000.00 Fixed Assets $ 14,006,000.00 $ 17,605,000.00 Accumulated Depreciation $ -1,280,000.00 $ -1,700,000.00 Net Fixed Assets $ 12,726,000.00 $ 15,905,000.00 Longterm Investments $ 360,000.00 $ 320,000.00 Investments in Other Companies $ 65,000.00 $ - Intangibles and Other Assets $ 100,000.00 $ 110,000.00 Total Non Current Assets $ 13,251,000.00 $ 16,335,000.00 Total Assets $ 17,146,000.00 $ 21,360,000.00 Accounts Payable $ 2,050,000.00 $ 3,150,000.00 Short Term Borrowings $ 1,200,000.00 $ 1,830,000.00 Short Term Portion of LT Debt $ 12,000.00 $ 15,000.00 Other Current Liabilities $ 1,050,000.00 $ 1,250,000.00 Total Current Liabilities $ 4,312,000.00 $ 6,245,000.00 Longterm Debt / Borrowings $ 1,160,000.00 $ 1,750,000.00 Other Longterm Liabilities $ 650,000.00 $ 750,000.00 Total Non Current Liabilities $ 1,810,000.00 $ 2,500,000.00 Total Liabilities $ 6,122,000.00 $ 8,745,000.00 Preferred Equity - - Common Equity $ 2,044,000.00 $ 2,005,000.00 Additional Paid in Capital $ 5,013,000.00 $ 4,900,000.00 Retained Earnings $ 5,097,000.00 $ 7,050,000.00 Additional Paid in Capital $ 275,000.00 $ 120,000.00 Treasury Stock $ -1,405,000.00 $ -1,460,000.00 Total Shareholder Equity $ 11,024,000.00 $ 12,615,000.00 Total Liabilities & Equity $ 17,146,000.00 $ 21,360,000.00 Statement of Comprehensive Income of cf company 2015 2016 Net Sales 12,060,000 16,700,000 Other Operating Revenues 16,000 19,000 Total Revenues 12,076,000 16,719,000 Cost of Goods Sold (4,950,000) (7,050,000) Other Operating Expenses (11,000) (13,000) Total Direct Expenses (4,961,000) (7,063,000) Selling, General & Administrative (3,300,000) (3,880,000) Operating Income 3,815,000 5,776,000 Interest Expenses (117,000) (122,000) Foreign Exchange (Loss) Gain 0 0 Associated Company (Loss) Gain 0 0 Other NonOperating (Loss) Gain 0 17,000 Income Tax Expense (790,000) (1,005,000) Reserve Charges 0 0 EBITDA 3,815,000 5,776,000 EBITDA (Loss) Gain 0 0 Tax Expenses 0 0 Retained Earnings 170,000 302,000 Net Income 3,815,000 5,776,000 answer this Compute the following financial ratio analysis using the data above. 1. Prepare a vertical analysis for the Statement of Income and Statement of Financial Position for years 2019 and 2020. (1 decimal place) 2. Give insights or interpreting the results of the vertical analysis made. 3. Prepare a horizontal analysis for the Statement of Income and Statement of Financial Position for year 2019 and 2020. (1 decimal place)
FINANCIAL STATEMENT ANALYSIS DATA INFORMATION Statement of Financial Position of cf company 2015 2016 Cash and Cash Equivalents $ 990,000.00 $ 950,000.00 Short Term Marketable Securities $ 10,000.00 $ 15,000.00 Accounts Receivable $ 1,020,000.00 $ 1,550,000.00 Inventory $ 1,005,000.00 $ 1,360,000.00 Other Current Assets $ 870,000.00 $ 1,150,000.00 Total Current Assets $ 3,895,000.00 $ 5,025,000.00 Fixed Assets $ 14,006,000.00 $ 17,605,000.00 Accumulated Depreciation $ -1,280,000.00 $ -1,700,000.00 Net Fixed Assets $ 12,726,000.00 $ 15,905,000.00 Longterm Investments $ 360,000.00 $ 320,000.00 Investments in Other Companies $ 65,000.00 $ - Intangibles and Other Assets $ 100,000.00 $ 110,000.00 Total Non Current Assets $ 13,251,000.00 $ 16,335,000.00 Total Assets $ 17,146,000.00 $ 21,360,000.00 Accounts Payable $ 2,050,000.00 $ 3,150,000.00 Short Term Borrowings $ 1,200,000.00 $ 1,830,000.00 Short Term Portion of LT Debt $ 12,000.00 $ 15,000.00 Other Current Liabilities $ 1,050,000.00 $ 1,250,000.00 Total Current Liabilities $ 4,312,000.00 $ 6,245,000.00 Longterm Debt / Borrowings $ 1,160,000.00 $ 1,750,000.00 Other Longterm Liabilities $ 650,000.00 $ 750,000.00 Total Non Current Liabilities $ 1,810,000.00 $ 2,500,000.00 Total Liabilities $ 6,122,000.00 $ 8,745,000.00 Preferred Equity - - Common Equity $ 2,044,000.00 $ 2,005,000.00 Additional Paid in Capital $ 5,013,000.00 $ 4,900,000.00 Retained Earnings $ 5,097,000.00 $ 7,050,000.00 Additional Paid in Capital $ 275,000.00 $ 120,000.00 Treasury Stock $ -1,405,000.00 $ -1,460,000.00 Total Shareholder Equity $ 11,024,000.00 $ 12,615,000.00 Total Liabilities & Equity $ 17,146,000.00 $ 21,360,000.00 Statement of Comprehensive Income of cf company 2015 2016 Net Sales 12,060,000 16,700,000 Other Operating Revenues 16,000 19,000 Total Revenues 12,076,000 16,719,000 Cost of Goods Sold (4,950,000) (7,050,000) Other Operating Expenses (11,000) (13,000) Total Direct Expenses (4,961,000) (7,063,000) Selling, General & Administrative (3,300,000) (3,880,000) Operating Income 3,815,000 5,776,000 Interest Expenses (117,000) (122,000) Foreign Exchange (Loss) Gain 0 0 Associated Company (Loss) Gain 0 0 Other NonOperating (Loss) Gain 0 17,000 Income Tax Expense (790,000) (1,005,000) Reserve Charges 0 0 EBITDA 3,815,000 5,776,000 EBITDA (Loss) Gain 0 0 Tax Expenses 0 0 Retained Earnings 170,000 302,000 Net Income 3,815,000 5,776,000 answer this Compute the following financial ratio analysis using the data above. 1. Prepare a vertical analysis for the Statement of Income and Statement of Financial Position for years 2019 and 2020. (1 decimal place) 2. Give insights or interpreting the results of the vertical analysis made. 3. Prepare a horizontal analysis for the Statement of Income and Statement of Financial Position for year 2019 and 2020. (1 decimal place)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Cost of Capital
Shareholders and investors who invest into the capital of the firm desire to have a suitable return on their investment funding. The cost of capital reflects what shareholders expect. It is a discount rate for converting expected cash flow into present cash flow.
Capital Structure
Capital structure is the combination of debt and equity employed by an organization in order to take care of its operations. It is an important concept in corporate finance and is expressed in the form of a debt-equity ratio.
Weighted Average Cost of Capital
The Weighted Average Cost of Capital is a tool used for calculating the cost of capital for a firm wherein proportional weightage is assigned to each category of capital. It can also be defined as the average amount that a firm needs to pay its stakeholders and for its security to finance the assets. The most commonly used sources of capital include common stocks, bonds, long-term debts, etc. The increase in weighted average cost of capital is an indicator of a decrease in the valuation of a firm and an increase in its risk.
Question
| FINANCIAL STATEMENT ANALYSIS |
| DATA INFORMATION |
| 2015 | 2016 | ||
| Cash and Cash Equivalents | $ 990,000.00 | $ 950,000.00 | |
| Short Term Marketable Securities | $ 10,000.00 | $ 15,000.00 | |
| $ 1,020,000.00 | $ 1,550,000.00 | ||
| Inventory | $ 1,005,000.00 | $ 1,360,000.00 | |
| Other Current Assets | $ 870,000.00 | $ 1,150,000.00 | |
| Total Current Assets | $ 3,895,000.00 | $ 5,025,000.00 | |
| Fixed Assets | $ 14,006,000.00 | $ 17,605,000.00 | |
| $ -1,280,000.00 | $ -1,700,000.00 | ||
| Net Fixed Assets | $ 12,726,000.00 | $ 15,905,000.00 | |
| Longterm Investments | $ 360,000.00 | $ 320,000.00 | |
| Investments in Other Companies | $ 65,000.00 | $ - | |
| Intangibles and Other Assets | $ 100,000.00 | $ 110,000.00 | |
| Total Non Current Assets | $ 13,251,000.00 | $ 16,335,000.00 | |
| Total Assets | $ 17,146,000.00 | $ 21,360,000.00 | |
| Accounts Payable | $ 2,050,000.00 | $ 3,150,000.00 | |
| Short Term Borrowings | $ 1,200,000.00 | $ 1,830,000.00 | |
| Short Term Portion of LT Debt | $ 12,000.00 | $ 15,000.00 | |
| Other Current Liabilities | $ 1,050,000.00 | $ 1,250,000.00 | |
| Total Current Liabilities | $ 4,312,000.00 | $ 6,245,000.00 | |
| Longterm Debt / Borrowings | $ 1,160,000.00 | $ 1,750,000.00 | |
| Other Longterm Liabilities | $ 650,000.00 | $ 750,000.00 | |
| Total Non Current Liabilities | $ 1,810,000.00 | $ 2,500,000.00 | |
| Total Liabilities | $ 6,122,000.00 | $ 8,745,000.00 | |
| Preferred Equity | - | - | |
| Common Equity | $ 2,044,000.00 | $ 2,005,000.00 | |
| Additional Paid in Capital | $ 5,013,000.00 | $ 4,900,000.00 | |
| $ 5,097,000.00 | $ 7,050,000.00 | ||
| Additional Paid in Capital | $ 275,000.00 | $ 120,000.00 | |
| $ -1,405,000.00 | $ -1,460,000.00 | ||
| Total Shareholder Equity | $ 11,024,000.00 | $ 12,615,000.00 | |
| Total Liabilities & Equity | $ 17,146,000.00 | $ 21,360,000.00 |
| Statement of Comprehensive Income of cf company | |||
| 2015 | 2016 | ||
| Net Sales | 12,060,000 | 16,700,000 | |
| Other Operating Revenues | 16,000 | 19,000 | |
| Total Revenues | 12,076,000 | 16,719,000 | |
| Cost of Goods Sold | (4,950,000) | (7,050,000) | |
| Other Operating Expenses | (11,000) | (13,000) | |
| Total Direct Expenses | (4,961,000) | (7,063,000) | |
| Selling, General & Administrative | (3,300,000) | (3,880,000) | |
| Operating Income | 3,815,000 | 5,776,000 | |
| Interest Expenses | (117,000) | (122,000) | |
| Foreign Exchange (Loss) Gain | 0 | 0 | |
| Associated Company (Loss) Gain | 0 | 0 | |
| Other NonOperating (Loss) Gain | 0 | 17,000 | |
| Income Tax Expense | (790,000) | (1,005,000) | |
| Reserve Charges | 0 | 0 | |
| EBITDA | 3,815,000 | 5,776,000 | |
| EBITDA (Loss) Gain | 0 | 0 | |
| Tax Expenses | 0 | 0 | |
| Retained Earnings | 170,000 | 302,000 | |
| Net Income | 3,815,000 | 5,776,000 | |
answer this
| Compute the following financial ratio analysis using the data above. | ||
| 1. Prepare a vertical analysis for the Statement of Income and Statement of Financial Position for years 2019 and 2020. (1 decimal place) | ||
| 2. Give insights or interpreting the results of the vertical analysis made. | ||
| 3. Prepare a horizontal analysis for the Statement of Income and Statement of Financial Position for year 2019 and 2020. (1 decimal place) | ||
| 4. Give insights or interpreting the results of the horizontal analysis made | ||
| 5. Compute the following financial ratios and interpreting the results: (1 decimal place) | ||
| a. |
||
| b. quick ratio | ||
| c. receivable turnover | ||
| d. age of receivables | ||
| e. inventory turnover | ||
| f. age of inventory | ||
| g. asset turnover | ||
| h. fixed asset turnover | ||
| i. times interest earned | ||
| j. debt ratio | ||
| k. equity ratio | ||
| l. debt to equity ratio | ||
| m. gross profit margin | ||
| n. return on equity | ||
| o. return on assets |
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