You have been appointed as a Senior Financial Analyst for a multi-national manufacturing concern. Your appointment was being discussed for so long among board members as majority of them believed that this position is not really required as they already have a team of 4 qualified financial analysts. Only CFO was convinced to have you onboard and primarily he is impressed by your previous experiences of writing financial performance reports. He also wants you to lead current team of financial analysts. In your first meeting with CFO, you have been provided with most recent Financial Statements you have been given an assignment to prepare a report on profitability, liquidity, and capital structure of the company. CFO also needs your advice if company should go for debt financing for $2.5M. Below is the extract From Financial Statements that is made by one of your teammates. Income Statement 2018 2019 Sales 9974 9471 cost of goods sold 5035 3845 Gross Profit 4939 5626 Operating Expanses Salaries expanse 1654 594 Rent Expanse 547 1738 Utility Expanses 858 545 Depreciation Expanse 1159 1359 Operating Profit 721 1390 Interest Expanse 300 900 PBIT 421 490 TAX @20% 84.2 98 PAT 336.8 392 Statement of Financial Position 2018 2019 Cash and Cash Equivalents 432 635 Receivables 344 348 Inventory 305 598 Prepaid Assets 111 731 Non-Current Assets (Fair value) 750 950 Total Assets 1942 3262 Current Liabilities 1050 1560 Non-Current Liabilities 500 550 Equity 392 1152 Total Equity and Liabilities 1942 3262 All figures are rounded to $000.
You have been appointed as a Senior Financial Analyst for a multi-national manufacturing concern. Your appointment was being discussed for so long among board members as majority of them believed that this position is not really required as they already have a team of 4 qualified financial analysts.
Only CFO was convinced to have you onboard and primarily he is impressed by your previous experiences of writing financial performance reports. He also wants you to lead current team of financial analysts.
In your first meeting with CFO, you have been provided with most recent Financial Statements you have been given an assignment to prepare a report on profitability, liquidity, and capital structure of the company. CFO also needs your advice if company should go for debt financing for $2.5M. Below is the extract From Financial Statements that is made by one of your teammates.
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Income Statement |
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2018 |
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2019 |
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Sales |
9974 |
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9471 |
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cost of goods sold |
5035 |
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3845 |
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Gross Profit |
4939 |
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5626 |
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Operating Expanses |
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Salaries expanse |
1654 |
594 |
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Rent Expanse |
547 |
1738 |
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Utility Expanses |
858 |
545 |
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1159 |
1359 |
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Operating Profit |
721 |
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1390 |
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Interest Expanse |
300 |
900 |
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PBIT |
421 |
490 |
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TAX @20% |
84.2 |
98 |
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PAT |
336.8 |
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392 |
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2018 |
2019 |
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Cash and Cash Equivalents |
432 |
635 |
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Receivables |
344 |
348 |
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Inventory |
305 |
598 |
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Prepaid Assets |
111 |
731 |
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Non-Current Assets (Fair value) |
750 |
950 |
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Total Assets |
1942 |
3262 |
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Current Liabilities |
1050 |
1560 |
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Non-Current Liabilities |
500 |
550 |
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Equity |
392 |
1152 |
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Total Equity and Liabilities |
1942 |
3262 |
All figures are rounded to $000.
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