research paper
Nicole Martins
Case1-StudentInstructions-DarlarnaFurniture.docx
Case 1: Darlarna Furniture
Student Instructions
1. Prepare the following financial exhibits for 2016, 2017, and 2018:
0. Ratio table with industry averages
0. Vertical analysis of income statements and balance sheets
0. Horizontal analysis (index numbers) of income statements and balance sheets
0. 5-part analysis of ROE
0. Cash flow statements (2017 and 2018 only)
Note: All ratios should be calculated using year-end figures – yearly averages should not be used.
2. Prepare a 2-page memorandum as requested by Mr. Blix. The memo should be divided into sections describing liquidity, asset management, long-term debt ability, profitability, and recommendations.
Submit the memorandum with exhibits using the assignment drop box in Moodle.
No Excel file should be submitted.
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Financial Ratios |
2016 |
2017 |
2018 |
Industry Average |
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Current Ratio |
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Cash Ratio |
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Inventory Turnover in Days |
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A/R Turnover in Days |
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A/P Turnover in Days |
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Cash Conversion Cycle |
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Fixed Assets Turnover |
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Total Assets Turnover |
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LT Debt to Total Capitalization |
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Cash Flow Coverage |
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Effective Interest Rate |
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Maximum Borrowing |
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Gross Profit Margin |
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Operating Profit Margin |
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Net Profit Margin |
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Return on Assets |
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Return on Equity |
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Analysis of ROE – 5-Way |
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EBIT/Sales |
EBT/EBIT |
NI/EBT |
Total Asset Turnover |
Debt Ratio |
ROE |
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2016 |
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2017 |
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2018 |
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Evaluation Form
Total: _________ / 100
Letter Grade: _________
Accuracy of Financial Data - 25%
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Ratio table |
/5 |
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Vertical analysis |
/5 |
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Horizontal analysis |
/5 |
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Analysis of ROE |
/5 |
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Cash flow statements |
/5 |
One mark will be deducted for each major mistake.
Thoroughness of Analysis – 50%
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Liquidity |
/10 |
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Asset management |
/10 |
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Long-term debt paying ability |
/10 |
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Profitability |
/10 |
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Recommendations |
/10 |
Layout and Writing Quality – 25%
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Memo layout |
/5 |
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Grammatical and spelling errors |
/10 |
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Writing style |
/10 |
Comments
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