Overview of fictional companys projected financial condition

Assignment Help Financial Management

Reference no: EM131343741

	Fictional Company Financial Statements

Balance Sheets
					PROJECTIONS

*Assets*			2015	2016	2017E
Cash and equivalents			$9,000	$7,282	$14,000
Short-term investments			$48,600	$20,000	$71,632
Accounts receivable			$351,200	$632,160	$878,000
Inventories			$715,200	$1,287,360	$1,716,480
Total current assets			$1,124,000	$1,946,802	$2,680,112
Gross Fixed Assets			$491,000	$1,202,950	$1,220,000
Less Accumulated Dep.			$146,200	$263,160	$383,160
Net Fixed Assets			$344,800	$939,790	$836,840
Total Assets			$1,468,800	$2,886,592	$3,516,952

*Liabilities and equity*
Accounts payable			$145,600	$324,000	$359,800
Notes payable			$200,000	$720,000	$300,000
Accruals			$136,000	$284,960	$380,000
Total current liabilities			$481,600	$1,328,960	$1,039,800
Long-term bonds			$323,432	$1,000,000	$500,000
Total liabilities			$805,032	$2,328,960	$1,539,800
Common stock (100,000 shares)			$460,000	$460,000	$1,680,936
Retained earnings			$203,768	$97,632	$296,216
Total common equity			$663,768	$557,632	$1,977,152
Total liabilities and equity			$1,468,800	$2,886,592	$3,516,952

Income Statements

			2015	2016	2017E
Net sales			$3,432,000	$5,834,400	$7,035,600
Costs of Goods Sold Except Depr.			$2,864,000	$4,980,000	$5,800,000
Depreciation and amortization			$18,900	$116,960	$120,000
Other Expenses			$340,000	$720,000	$612,960
Total Operating Cost			$3,222,900	$5,816,960	$6,532,960
Earnings before interest and taxes (EBIT)			$209,100	$17,440	$502,640
Less interest			$62,500	$176,000	$80,000
Pre-tax earnings			$146,600	($158,560)	$422,640
Taxes (40%)			$58,640	($63,424)	$169,056
Net Income before preferred dividends			$87,960	($95,136)	$253,584
EPS			$0.880	($0.951)	$1.014
DPS			$0.220	$0.110	$0.220
Book Value Per Share			$6.638	$5.576	$7.909

Other Info:
			2015	2016	2017E
Year-end common stock price			$8.50	$6.00	$12.17
Year-end shares outstanding			100,000	100,000	250,000
Tax rate			40%	40%	40%
Lease payments			$40,000	$40,000	$40,000


Calculated Data: Ratios					Industry
		2015	2016	2017E	Average	Comment
*Liquidity ratios*
Current Ratio		2.33	1.46	2.58	2.70	Below industry standard
Quick Ratio		0.85	0.50	0.93	1.00	Below industry standard

					Industry
*Asset Management ratios*		2015	2016	2017E	Average
Inventory Turnover		4.03	3.96	7.48	6.10	Above industry standard
Days Sales Outstanding		37.35	39.55	45.55	32.00	Above industry standard
Fixed Asset Turnover		9.95	6.21	8.41	7.00	Above industry standard
Total Asset Turnover		2.34	2.02	2.00	2.50	Below industry standard

					Industry
*Debt Management ratios*		2015	2016	2017E	Average
Debt Ratio		35.6%	59.6%	22.75%	32.0%	Below industry standard
Liabilities-to-assets Ratio		54.8%	80.7%	43.78%	50.0%	Below industry standard
Times Interest Earned		3.35	0.10	6.28	6.20
EBITDA Coverage Ratio		2.61	0.81	5.52	8.00	Below industry standard

					Industry
*Profitability ratios*		2015	2016	2017E	Average
Net Profit Margin		2.6%	-1.6%	3.60%	3.6%
Operating Margin		6.1%	0.3%	7.14%	7.1%
Gross Profit Margin		16.6%	14.6%	17.56%	15.5%
Basic Earning Power		14.2%	0.6%	14.29%	17.8%	Below industry standard
Return on Assets		6.0%	-3.3%	7.21%	9.0%	Below industry standard
Return on Equity		13.3%	-17.1%	12.83%	18.0%	Below industry standard

					Industry
*Market Value ratios*		2015	2016	2017E	Average
Price-to Earnings Ratio		9.66	-6.31	12.00	14.20	Below industry standard
Price-to-Cash Flow Ratio		7.95	27.49	0.00	7.60
Market-to-Book Ratio		1.28	1.08	1.54	2.90	Below industry standard
Book Value Per Share		6.64	5.58	7.91	na

Use the extended DuPont equation to provide a summary and overview of Fictional Company'sprojected financial condition.

DuPont Analysis		*ROE* =	P.M. X	T.A.T.O. X	Equity Multiplier
Fictional Co.	2015	13.25%	2.56%	233.66%	221.28%
Fictional Co.	2016	-17.06%	-1.63%	202.12%	517.65%
Fictional Co.	2017E	12.83%	3.60%	200.05%	177.88%
Industry Average		18.02%	3.6%	2.5	2.00

Attachment:- FS-Analysis-.rar

Reference no: EM131343741

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