Chapter 04 - Page 90 A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15...

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Page 90 Page 1 FARMERS BAGELS, INC. Financial Results for First Two Years of Existence 1995 1996 Current assets Cash and cash equivalents 2,016,245 3,023,989 Accounts receivable 1,278,771 4,194,238 Inventory 185,314 759,104 Prepaid expenses and other current assets 392,116 1,006,169 Property and equipment At cost 4,000,000 13,030,853 Less accumulated depreciation (400,000) (1,703,085) Net property and equipment 3,600,000 11,327,768 Total assets 7,472,446 20,311,268 Current liabilities Accounts payable and accrued expenses 906,648 3,271,271 Income taxes payable 157,935 423,486 Other current liabilities 52,910 151,189 Long-term debt 846,058 8,597,874 Stockholders' equity Common stock 4,610,999 4,610,999 Retained earnings 897,896 3,256,449 Total liabilities and equity 7,472,446 20,311,268 Income statement 1995 1996 Sales Product sales 6,076,345 18,977,564 Other income 131,326 176,111 Total sales 6,207,671 19,153,675 Operating expenses Cost of products sold (2,461,470) (7,839,481) Depreciation (400,000) (1,303,085) Selling, general, and administrative expenses (1,866,614) (6,045,369) Interest expense (50,763) (84,606) Interest income 100,812 171,362 Earnings before income taxes 1,529,636 4,052,496 Provision for income taxes (631,740) (1,693,943) Profit after taxes 897,896 2,358,553 FARMERS BAGELS: FREE CASH FLOWS FOR 1995-1996 1995 1996 Profit after taxes 897,896 2,358,553 Add back depreciation 400,000 1,303,085 Add back interest expenses, net of taxes 71,729 119,971 Subtract interest income, net of taxes (59,177) (99,733) Subtract increase in current assets (1,856,201) (5,959,511) Add back increase in current liabilities 1,117,493 2,728,453 Subtract increase in property and equipment at cost (4,000,000) (9,030,853) Free cash flow (3,428,260) (8,580,035) A B C D 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59
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Page 91 Page 2 FARMERS BAGELS, INC. Ratio Analysis 1995 1996 Current assets Accounts receivable 20.6% 21.9% Inventory 3.0% 4.0% Prepaid expenses and other current assets 6.3% 5.3% New property and equipment at cost, % of new sales 64.4% 69.8% Current liabilities Accounts payable and accrued expenses 14.6% 17.1% Income taxes payable (as % of income tax) 25.0% 25.0% Other current liabilities 0.9% 0.8% Operating expenses Cost of products sold 39.7% 40.9% Selling, general, and administrative expenses 30.1% 31.6% Provision for income taxes (as % of earnings before taxes) 41.3% 41.8% A B C 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
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UN-2C FARMERS BAGELS PROJECTED SALES Projected Year sales 1997 28,048,500 1998 42,021,000 1999 55,993,500 2000 69,966,000 2001 83,938,500 FARMERS BAGELS: INITIAL PRO FORMA MODEL Predicted financial statement ratios: All ratios are a percentage of sales unless otherwise stated. Year
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This note was uploaded on 02/02/2012 for the course BUSINESS 201 taught by Professor Acknan during the Spring '11 term at MIT.

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Chapter 04 - Page 90 A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15...

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