BUSN460 Individual Financial Analysis Project
Find these ratios, providing the following information for each; Formula (express the ratio in words), a detailed calculation (actual numbers from financial statements used for the calculation), final number (final result of the detailed calculation) and explanation of why ratio is important:
Efficiency Ratio: Receivable Turnover
Financial Leverage Ratio: Debt/Equity Ratio
Liquidity Ratio: Current Ratio
Liquidity Ratio: Quick Ratio
Profitability Ratio: Return on Equity
Profitability Ratio: Return on Assets
Profitability Ratio: Gross Margin %
Profitability Ratio: Net Profit Margin
Financial information has been attached.
- At the beginning of 1999, CanGo purchased the online gaming company. This purchase was for cash, paid for through the proceeds of the IPO and results in goodwill.
- 90% of the online book sales comes from JIT, the other 10% through the inventory which CanGo possesses. 100% of the CD/DVD/MP3 come through CanGo inventory. The result is that 80% of ALL sales is JIT and 20% is inventory.
- There is one warehouse for shipping of books and one plant for manufacturing.
- There are three divisions: a CD/DVD/MP3 division, an online gaming division and a books division. All manufacturing takes place in the CD/DVD/MP3 division.
- The IPO takes place at the beginning of 1999.
- The CD/DVDs were customized beginning in 1998. The MP3 players were built beginning in the start of 1999.
- The online gaming company was purchased for $30,000,000 and both Elizabeth and Andrew initiated the process.
- The company begins in 1996, has a VC infusion in 1997 and 1998. It shows a profit in 1998 and 1999. Its only profitable division is the online book sales division.
- It has some type of international operations, hence the need for a "translation gain or loss" in owner's equity.
- It has an extraordinary loss from fire and a sale of a segment of its business in 1999.
ASSETS | December 31, 1999 | December 31, 1998 |
Cash | $20,900,000 |
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Marketable Securities | $117,000,000 |
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Accounts Receivable | $33,000,000 |
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Less: Allowance for Bad Debts | $(880,000) |
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Net Accounts Receivable | $32,120,000 |
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Inventory |
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Raw Materials | $2,000,000 |
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Work-in-process | $1,000,000 |
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Finished Goods | $5,000,000 |
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Inventory Purchased for Resale | $24,000,000 |
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Total Inventory | $32,000,000 |
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Plant, Property and Equipment | $6,700,000 |
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Less: Accumulated Depreciation | $(320,000) |
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Net Plant, Property and Equipment | $6,380,000 |
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Prepaid Expenses | $200,000 |
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Goodwill and Other Purchased Intangibles | $28,000,000 |
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Less: Amortization | $(700,000) |
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Net Goodwill and Other Purchased Intangibles | $27,300,000 |
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Total Assets | $235,900,000 |
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LIABILITIES AND OWNERS' EQUITY | ||
Accounts Payable | $22,000,000 |
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Accrued Advertising | $11,800,000 |
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Other Liabilities and Accrued Expense | $1,400,000 |
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Current Portion of Long-Term Debt | $2,300,000 |
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Long Term Debt | $57,400,000 |
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Preferred Stock, $100 par value per share, |
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100,000 authorized, 0 shares issued and outstanding | $0 |
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Common Stock, $1 par value per share, |
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250,000,000 shares authorized, 13,000,000 shares |
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issued, 12,900,000 outstanding | $13,000,000 |
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Additional Paid-in-Capital in excess of par value, Common Stock | $117,000,000 |
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Treasury Stock | $(1,000,000) |
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Retained Earnings (less Cash Dividends Paid) | $12,000,000 | $11,000,000 |
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Total Liabilities and Owner's Equity | $235,900,000 |
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| December 31, 1999 | December 31, 1998 |
Sales Revenues | $51,000,000 | $10,300,000 |
Less: Sales Returns | $(1,000,000) | $(300,000) |
Net Sales Revenues | $50,000,000 | $10,000,000 |
Less: Cost of Goods Sold | $(9,000,000) | $(4,000,000) |
Gross Profit | $41,000,000 | $6,000,000 |
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Operating Expenses: |
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Advertising and Sales | $(26,000,000) | $(3,000,000) |
Depreciation | $(160,000) |
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Salaries and Wages | $(1,700,000) | $(1,400,000) |
Product Development | $(4,000,000) | $(1,200,000) |
Merger and Acquisition Related Costs, including |
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Amortization of Goodwill and Other Intangibles | $(700,000) | $0 |
Total Operating Expenses | $(32,560,000) |
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Income from Continuing Operations Before Income Taxes | $8,440,000 |
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Less: Income Taxes at 35% | $(2,954,000) |
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Income from Continuing Operations | $5,486,000 |
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Discontinued Operations: |
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Income from Operations of Discontinued Division |
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(less applicable income taxes) | $350,000 |
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Loss on Disposal of Discontinued Division |
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(less applicable income taxes) | $(150,000) |
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Total Gain from Discontinued Operations | $200,000 |
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Extraordinary Items: |
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Loss from fire (less applicable income taxes) | $(200,000) |
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Net Income | $5,486,000 |
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Divisional Revenues | ||
Books | $15,000,000 | $7,000,000 |
Online gaming | $25,000,000 |
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Customized MP3/CD/DVD | $10,000,000 | $3,000,000 |
Customized MP3/CD/DVD Inventory at end of 1999 | $8,000,000 |
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CanGo, Inc. is a fictional Internet company that exists to support the Mastering Series project.
12 years ago
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find_these_ratios_providing_the_following_information_for_each.xls
