| Computron's Balance Sheets (Millions of Dollars) | | | | | Projection |
| | | | 2018 | 2019 | 2020E |
| Assets |
| Cash and equivalents | | | $ 10,000 | $ 7,782 | $ 15,500 |
| Short-term investments | | | 52,600 | 25,000 | 72,632 |
| Accounts receivable | | | 250,600 | 542,460 | 85,700 |
| Inventories | | | 837,982 | 1,546,252 | 1,779,572 |
| Total current assets | | | $ 1,151,182 | $ 2,121,494 | $ 1,953,404 |
| Net Fixed Assets | | | 882,982 | 1,164,085 | 1,785,600 |
| Total Assets | | | $ 2,034,164 | $ 3,285,579 | $ 3,739,004 |
| Liabilities and equity |
| Accounts payable | | | $ 154,600 | $ 382,500 | $ 452,300 |
| Notes payable | | | 250,000 | 620,000 | 450,000 |
| Accruals | | | 142,000 | 254,700 | 352,000 |
| Total current liabilities | | | $ 546,600 | $ 1,257,200 | $ 1,254,300 |
| Long-term bonds | | | 245,000 | 800,000 | 700,000 |
| Total liabilities | | | $ 791,600 | $ 2,057,200 | $ 1,954,300 |
| Common stock (100,000 shares) | | | 1,000,000 | 1,000,000 | 1,000,000 |
| Retained earnings | | | 242,564 | 228,379 | 784,704 |
| Total common equity | | | $ 1,242,564 | $ 1,228,379 | $ 1,784,704 |
| Total liabilities and equity | | | $ 2,034,164 | $ 3,285,579 | $ 3,739,004 |
| Income Statements (Millions of Dollars) | | | | | Projection |
| | | | 2018 | 2019 | 2020E |
| Net sales | | | $ 3,532,000 | $ 5,648,500 | $ 7,453,600 |
| Cost of goods sold (Excluding depr.) | | | $ 2,547,000 | $ 4,687,500 | $ 5,750,000 |
| Depreciationa | | | $ 16,500 | $ 187,500 | $ 150,000 |
| Other operating expenses | | | $ 385,000 | $ 625,000 | $ 723,500 |
| Earnings before interest and taxes (EBIT) | | | $ 583,500 | $ 148,500 | $ 830,100 |
| Less interest | | | $ 65,200 | $ 156,000 | $ 75,000 |
| Pre-tax earnings | | | $ 518,300 | $ (7,500) | $ 755,100 |
| Taxes (25%) | | | $ 129,575 | $ (1,875) | $ 188,775 |
| Net Income | | | $ 388,725 | $ (5,625) | $ 566,325 |
| Notes: |
| a Computron has no amortization charges. |
| Additional Information | | | | | Projection |
| | | | 2018 | 2019 | 2020E |
| Year-end common stock price | | | $8.50 | $7.50 | $11.15 |
| Shares outstanding (millions) | | | 100,000 | 100,000 | 100,000 |
| Common dividends (millions) | | | $9,500 | $8,560 | $10,000 |
| Tax rate | | | 25% | 25% | 25% |
| Additions to retained earnings (millions) | | | $379,225 | -$14,185 | $556,325 |
| Lease payments (millions) | | | $35,000 | $35,000 | $35,000 |
| Per Share Information | | | | | Projection |
| | | | 2018 | 2019 | 2020E |
| EPS | | | $3.89 | -$0.06 | $5.66 |
| DPS | | | $0.10 | $0.09 | $0.10 |
| Book Value Per Share | | | $12.43 | $12.28 | $17.85 |
| Ratio Analysis | | | 2018 | 2019 | 2020E | Industry
Average |
| Profit margin | | | 11.0% | -0.1% | | 7.2% |
| Operating profit margin | | | 16.5% | 2.6% | | 10.4% |
| Basic earning power | | | 28.7% | 4.5% | | 15.6% |
| ROA | | | 19.1% | -0.2% | | 10.8% |
| ROE | | | 31.3% | -0.5% | | 15.4% |
| Inventory turnover | | | 3.1 | 3.2 | | 9.0 |
| Days sales outstanding | | | 25.9 | 35.1 | | 28.0 |
| Fixed assets turnover | | | 4.0 | 4.9 | | 3.0 |
| Total assets turnover | | | 1.736 | 1.719 | | 1.5 |
| Current | | | 2.1 | 1.7 | | 2.5 |
| Quick | | | 0.6 | 0.5 | | 1.9 |
| Debt ratio | | | 24.3% | 43.2% | | 15.0% |
| Debt-to-equity ratio | | | 0.40 | 1.16 | | 0.22 |
| Liabilities-to-assets ratio | | | 38.9% | 62.6% | | 32.0% |
| TIE | | | 8.9 | 1.0 | | 13.0 |
| EBITDA coverage | | | 6.3 | 1.9 | | 17.2 |
| Price/earnings (P/E) | | | 2.2 | -133.3 | | 16.8 |
| Market/book | | | 0.7 | 0.6 | | 2.7 |
| *Note "E" denotes "estimated" |