04-Statement-analysis-FIN6406

04-Statement-analysis-FIN6406 - Analysis of Financial...

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Statement Analysis  Statement Analysis  11 n Ratio analysis n Limitations of ratio analysis n Qualitative factors Analysis of Financial Statements
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Statement Analysis  Statement Analysis  22 Income Statement 2010 2011 Sales 5,834,400 7,035,600 COGS 4,980,000 5,800,000 Other expenses 720,000 612,960 Deprec. 116,960 120,000 Tot. op. costs 5,816,960 6,532,960 EBIT 17,440 502,640 Int. expense 176,000 80,000 EBT (158,560) 422,640 Taxes (40%) (63,424) 169,056 Net income (95,136) 253,584
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Statement Analysis  Statement Analysis  33 Balance Sheets: Assets 2010 2011 Cash 7,282 14,000 S-T invest. 20,000 71,632 AR 632,160 878,000 Inventories 1,287,360 1,716,480 Total CA 1,946,802 2,680,112 Net FA 939,790 836,840 Total assets 2,886,592 3,516,952
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Statement Analysis  Statement Analysis  44 2010 2011 Accts. payable 324,000 359,800 Notes payable 720,000 300,000 Accruals 284,960 380,000 Total CL 1,328,960 1,039,800 Long-term debt 1,000,000 500,000 Common stock 460,000 1,680,936 Ret. earnings 97,632 296,216 Total equity 557,632 1,977,152 2,886,592 3,516,952
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Statement Analysis  Statement Analysis  55 Other Data 2010 2011 Stock price $6.00 $12.17 # of shares 100,000 250,000 EPS -$0.95 $1.01 DPS $0.11 $0.22 Book val. per share $5.58 $7.91 Lease payments 40,000 40,000 Tax rate 0.4 0.4
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Statement Analysis  Statement Analysis  66 n Standardize numbers; facilitate comparisons n Used to highlight weaknesses and strengths Why are ratios useful?
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Statement Analysis  Statement Analysis  77 n Liquidity: Can we make required payments as they fall due? n Asset management: Do we have the right amount of assets for the What are the five major categories of ratios, and what questions do they answer? (More…)
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Statement Analysis  Statement Analysis  88 n Debt management: Do we have the right mix of debt and equity? n Profitability: Do sales prices exceed unit costs, and are sales high enough as reflected in PM, ROE, and ROA? n Market value: Do investors like what they see as reflected in P/E and M/B ratios?
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 Statement Analysis  99 Calculate the firm’s forecasted current and quick ratios. CR =
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This note was uploaded on 09/23/2011 for the course FIN 6406 taught by Professor Sturm,r during the Spring '08 term at University of Central Florida.

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04-Statement-analysis-FIN6406 - Analysis of Financial...

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