Ch #4 - CHAPTER4 AnalysisofFinancialStatements 2. 9 enter...

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CHAPTER 4 Analysis of Financial Statements 2 nd . 9 enter Balance Sheet: Assets 2009 2008 Cash 85,632 7,282 Accounts Receivable         878,000       632,160 Inventories      1,716,480    1,287,360   Total Current Assets      2,680,112    1,926,802 Gross Fixed Assets      1,197,160              1,202,950 Less: Depreciation         380,120       263,160  Net Fixed Assets         817,040       939,790 Total Assets      3,497,152    2,866,592 2009 2008 Accts payable         436,800       524,160 Notes payable         300,000       636,808 Accruals         408,000       489,600 Total CL      1,144,800    1,650,568 Long-term debt         400,000       723,432 Common stock      1,721,176       460,000 Retained earnings         231,176        32,592 Total Equity      1,952,352       492,592 1
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     3,497,152     2,866,592 Income statement 2009 2008 Sales      7,035,600      6,034,000 COGS      5,875,992      5,528,000 Other expenses         550,000         519,988 EBITDA         609,608        (13,988)          116,960         116,960    EBIT         492,648       (130,948) Interest Exp.          70,008         136,012   EBT         422,640       (266,960) Taxes         169,056       (106,784) Net income         253,584       (160,176)  Other data No. of shares         250,000 100,000 EPS  1.014   -1.612 DPS  0.220    0.110 Stock price  12.17      2.25 Lease pmts          40,000   40,000 Why are ratios useful? 0. Ratios standardize numbers and facilitate comparisons. 1. Ratios are used to highlight weaknesses and strengths. 2
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What are the five major categories of ratios, and what questions do they answer? 0. Liquidity: Can we make required payments? 1. Asset management: right amount of assets vs. sales? 2. Debt management: Right mix of debt and equity? 3. Profitability: Do sales prices exceed unit costs, and are sales high  enough as reflected in PM, ROE, and ROA? 4.
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This note was uploaded on 09/09/2010 for the course LAG l009449 taught by Professor Francisco during the Spring '10 term at Mid-Continent.

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Ch #4 - CHAPTER4 AnalysisofFinancialStatements 2. 9 enter...

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