Mini Case: Analysis of Financial Statements

profileChelsea21
USW1_FNCE_4101_Minicase_Burchetts-Student_Template.xls
Home>Business & Finance homework help>Accounting homework help>Mini Case: Analysis of Financial Statements

Instructions

Walden University
Group Project
MGMT 4101
Mini Case, Page 110-111
Please do the following:
1. Read pages 110-111 of the text regarding the Minicase for Burchetts Green.
2. Review the financial data as provided on this worksheet. This data is the same as the tables provided in the text.
3. Work with your group and decide what is required in order fulfill the requirements and complete the Answer Sheet.
4. Assign responsibilities within Group members.
5. Work on the assigned task and post your work to the group discussion area.
6. Review the work performed by the other members of the group and make sure you agree with their answers.
7. Select one person to enter the group's answers and complete the Answer Sheet (see special tab)
8. Post the revised answer sheet and allow all group members to review the answers provided.
9. Edit and change as necessary
10. Copy the final version of the Answer Sheet to a new Excel File and name the file as follows: Group #_Corp Finance Group Project
11. Attach the answer sheet file to the Instructor's Digital Drop Box by the due date.
Requirements:
1. Review the financial data and complete all ratios as specified on the answer sheet.
2. Prepare a memo, addressed to the Lending Committee of ABC Bank, where you explain what you uncovered in your analysis. Finish the memo with your group's recommendations on renewal of the $45 million note. Since the committee reviews many such renewal requests, it is likely that they will not know much about the Hobby Horse Company, so make sure you properly summarize the issues as your understand them.

Answer Sheet

Walden University
Group Project
MGMT 4101
Mini Case, Page 110-111
Please Enter Group Name
Enter the names of each group member
2011 2010 2009 2008 2007 2006
2006 2005 2004 2003 2002 2001
Asset Turnover
Cash Coverage
Cash Ratio
Quick Ratio
Average Collection Period
Current Ratio
Average Days in Inventory
Long Term Debt-Equity Ratio
Inventory Turnover
Net Working Capital/Total Assets
Operating Profit Margin
Payout Ratio
ROA (Return on Assets)
ROE (Return on Equity)
Times Interest Earned
Total Debt Ratio
Paste your Memo in the Space Provided.
Selected Financial Data (all items in Millions of dollars except per share data)
2011 2010 2009 2008 2007 2006
Sales 3,351 3,314 2,845 2,796 2,493 2,160
EBIT -9 312 256 243 212 156
Interest 37 63 65 58 48 46
Taxes 3 60 46 43 39 34
Net Profit (or Net Income) -49 189 145 142 125 76
Earnings Per Share -0.15 0.55 0.44 0.42 0.37 0.25
Current Assets 669 469 491 435 392 423
Net fixed Assets 923 780 753 680 610 536
Total Assets 1,592 1,249 1,244 1,115 1,002 959
Current Liabilities 680 365 348 302 276 320
Long Term Debt 236 159 297 311 319 315
Shareholders' Equity 676 725 599 502 407 324
Stores 240 221 211 184 170 157
Employees 13,057 11,835 9,810 9,790 9,075 7,825
INCOME STATEMENT 2011
Net Sales 3,351
Cost of Goods Sold 1,990
Selling, General, & Administrative Expenses 1,211
Depreciation Expense 159
EBIT (Earnings Before Interest and Taxes) -9
Net Interest Expense 37
Taxable income -46
Income taxes 3
Net Income -49
Allocation of Net Income
Addition to Retained Earnings -49
Dividends 0
BALANCE SHEET
Assets 2011 2010
Current Assets
Cash & Securities 14 72
Receivables 176 194
Inventories 479 203
Total Current Assets 669 469
Fixed Assets
Property, Plant & Equipment (net of depreciation) 1,077 910
Less Accumulated Depreciation 154 130
Net Fixed Assets 923 780
Total Assets 1,592 1,249
Liabilities and Shareholders' Equity
Current Liabilities
Debt due for repayment 484 222
Accounts Payable 94 58
Other Current Liabilities 102 85
Total Current Liabilities 680 365
Long-term Debt 236 159
Stockholders' Equity
Common Stock and other Paid-In Capital 155 155
Retained Earnings 521 570
Total Stockholders Equity 676 725
Total Liabilities and Stockholders Equity 1,592 1,249