Week 2 case study
Please give a detailed analysis of the financial statements given below for Joshua & White Technologies. Your analysis should include answers to the questions as follows (not limited to these questions):
· Has the company’s liquidity position improved or worsened? How’s it compared with the industry average?
· Has the company’s ability to manage its assets improved or worsened? How’s it compared with the industry average?
· How has the company’s profitability changed during the last year? How’s it compared with the industry average?
Note: you may need to research on the industry average on financial ratios for Information Technology companies.
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Joshua & White Technologies: December 31 Balance Sheets |
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(Thousands of Dollars) |
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Assets |
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2019 |
2018 |
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Cash and cash equivalents |
$21,000 |
$20,000 |
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Short-term investments |
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3,759 |
3,240 |
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Accounts Receivable |
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52,500 |
48,000 |
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Inventories |
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84,000 |
56,000 |
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Total current assets |
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$161,259 |
$127,240 |
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Net fixed assets |
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223,097 |
200,000 |
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Total assets |
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$384,356 |
$327,240 |
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Liabilities and equity |
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Accounts payable |
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$33,600 |
$32,000 |
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Accruals |
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12,600 |
12,000 |
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Notes payable |
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19,929 |
6,480 |
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Total current liabilities |
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$66,129 |
$50,480 |
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Long-term debt |
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67,662 |
58,320 |
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Total liabilities |
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$133,791 |
$108,800 |
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Common stock |
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178,440 |
178,440 |
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Retained Earnings |
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72,125 |
40,000 |
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Total common equity |
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$250,565 |
$218,440 |
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Total liabilities and equity |
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$384,356 |
$327,240 |
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Joshua & White Technologies December 31 Income Statements |
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(Thousands of Dollars) |
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2019 |
2018 |
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Sales |
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$420,000 |
$400,000 |
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COGS except excluding depr. and amort. |
300,000 |
298,000 |
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Depreciation and Amortization |
19,660 |
18,000 |
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Other operating expenses |
27,600 |
22,000 |
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EBIT |
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$72,740 |
$62,000 |
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Interest Expense |
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5,740 |
4,460 |
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EBT |
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$67,000 |
$57,540 |
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Taxes (25%) |
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16,750 |
14,385 |
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Net Income |
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$50,250 |
$43,155 |
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Common dividends |
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$18,125 |
$17,262 |
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Addition to retained earnings |
$32,125 |
$25,893 |
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Other Data |
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2019 |
2018 |
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Year-end Stock Price |
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$90.00 |
$96.00 |
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# of shares (Thousands) |
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4,052 |
4,000 |
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Lease payment (Thousands of Dollars) |
$20,000 |
$20,000 |
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Sinking fund payment (Thousands of Dollars) |
$5,000 |
$5,000 |