8-12 Ratio Solution - Chapter 8 Solution to Ch 8-12 Build a...

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2/20/2005 Chapter 8. Solution to Ch 8-12 Build a Model Cumberland Industries' December 31 Balance Sheets (in thousands of dollars) Assets 2006 2005 Cash and cash equivalents $91,450 $74,625 Short-term investments $11,400 $15,100 Accounts Receivable $103,365 $85,527 Inventories $38,444 $34,982 Total current assets $244,659 $210,234 Net fixed assets $67,165 $42,436 Total assets $311,824 $252,670 Liabilities and equity Accounts payable $30,761 $23,109 Accruals $30,477 $22,656 Notes payable $16,717 $14,217 Total current liabilities $77,955 $59,982 Long-term debt $76,264 $63,914 Total liabilities $154,219 $123,896 Common stock $100,000 $90,000 Retained Earnings $57,605 $38,774 Total common equity $157,605 $128,774 Total liabilities and equity $311,824 $252,670 Cumberland Industries December 31 Income Statements (in thousands of dollars) 2006 2005 Sales $455,150 $364,120 Expenses excluding depr. and amort. $386,878 $321,109 EBITDA $68,272 $43,011 Depreciation and Amortization $7,388 $6,752 EBIT $60,884 $36,259 Interest Expense $8,575 $7,829 EBT $52,309 $28,430 Taxes (40%) $20,924 $11,372 Net Income $31,385 $17,058 Common dividends $12,554 $6,823 Addition to retained earnings $18,831 $10,235 Other Data 2006 2005 Year-end Stock Price $17.25 $14.75 # of shares (in thousands) 10,000 9,000 Lease payment $75,000 $75,000 Sinking fund payment $0 $0 Tax rate 40% 40% Ratio Analysis 2006 2005 Industry Avg Liquidity Ratios
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