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Are you using the correct spreadsheet? This is Spreadsheet A.
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The Bishop Companies, Incorporated
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Income Statement
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Period Ending:
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6/30/21
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6/30/20
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6/30/19
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6/30/18
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RATIO ANALYSIS MATRIX
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Net Sales
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$245,486,000
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$285,059,000
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$232,571,000
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$180,186,000
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Cost of Goods Sold
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$188,312,000
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$249,259,000
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$203,752,000
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$158,267,000
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BALANCE SHEET RATIOS: Stability (Staying Power)
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Gross Profit
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$57,174,000
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$35,800,000
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$28,819,000
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$21,919,000
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1
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Current
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Current Assets
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$73,525,000
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1.021223
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Operating Expenses:
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Current Liabilities
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$71,997,000
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Sales, General and Admin.
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$13,706,000
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$14,950,000
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$14,532,000
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$13,276,000
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2
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Quick
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Non-Recurring Items
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$2,515,000
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($1,510,000)
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$17,000
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$0
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Cash + Accts. Rec.
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$44,074,000
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0.612164
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Other Operating Items
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$8,771,000
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$0
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($1,714,000)
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$0
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Current Liabilities
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$71,997,000
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EBIT
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$32,182,000
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$22,360,000
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$15,984,000
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$8,643,000
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3
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Debt-to-Worth
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Interest Expense
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$559,000
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$642,000
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$851,000
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$1,279,000
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Total Liabilities
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$124,217,000
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1.486756
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EBT
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$31,623,000
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$21,718,000
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$15,133,000
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$7,364,000
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Net Worth
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$83,549,000
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Income Tax
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$9,288,000
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$8,282,000
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$5,939,000
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$4,342,000
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EAT
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$22,335,000
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$13,436,000
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$9,194,000
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$3,022,000
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INCOME STATEMENT RATIOS: Profitability (Earning Power)
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Cash Dividends
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$8,934,000
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$5,374,400
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$3,677,600
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$1,208,800
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4
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Gross Margin
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Increase in RE
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$13,401,000
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$8,061,600
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$5,516,400
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$1,813,200
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Gross Profit
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$57,174,000
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0.232901
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0.4
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Sales
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$245,486,000
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5
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Net Margin
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Balance Sheet
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Net Profit Before Tax
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$31,623,000
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0.128818
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6/30/21
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6/30/20
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6/30/19
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6/30/18
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Sales
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$245,486,000
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Current Assets:
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Cash and Cash Equivalents
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$2,960,000
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$1,156,000
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$1,947,000
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$1,520,000
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ASSET MANAGEMENT RATIOS: Overall Efficiency Ratios
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Short Term Investments
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$9,858,000
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$328,000
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$185,000
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$215,000
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6
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Sales-to-Assets
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Net Receivables
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$41,114,000
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$46,696,000
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$40,716,000
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$33,150,000
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Sales
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$245,486,000
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1.18155
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Inventory
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$19,593,000
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$15,698,000
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$11,617,000
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$10,181,000
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Total Assets
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$207,766,000
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Total Current Assets
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$73,525,000
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$63,878,000
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$54,465,000
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$45,066,000
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7
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Return on Assets
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Net Profit Before Tax
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$31,623,000
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0.152205
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Long Term Assets:
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Total Assets
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$207,766,000
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Long Term Investments
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$26,165,000
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$19,309,000
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$18,637,000
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$4,728,000
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8
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Return on Investment
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Fixed Assets
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$85,947,000
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$96,748,000
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$91,911,000
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$87,682,000
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Net Profit Before Tax
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$31,623,000
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0.378496
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Goodwill
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$10,542,000
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$7,933,000
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$10,838,000
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$10,354,000
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Net Worth
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$83,549,000
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Intangible Assets
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$4,772,000
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$4,204,000
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$4,473,000
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$5,128,000
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Other Assets
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$1,508,000
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$5,955,000
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$1,139,000
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$4,633,000
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ASSET MANAGEMENT RATIOS: Working Capital Cycle Ratios
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Deferred Asset Charges
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$5,307,000
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$0
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($65,000)
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($78,000)
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9
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Inventory Turnover
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Total Assets
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$207,766,000
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$198,027,000
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$181,398,000
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$157,513,000
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Cost of Goods Sold
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$188,312,000
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9.611188
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Inventory
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$19,593,000
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Current Liabilities:
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10
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Inventory Turn-Days
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Accounts Payable
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$52,380,000
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$54,341,000
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$41,128,000
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$36,215,000
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360
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360
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37.45635
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Short Term Debt/Current Portion of Long Term Debt
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$18,015,000
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$10,184,000
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$9,456,000
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$10,086,000
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Inventory Turnover
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$ 9.61
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Other Current Liabilities
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$1,602,000
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$0
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$0
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$0
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11
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Accounts Receivable Turnover
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Total Current Liabilities
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$71,997,000
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$64,525,000
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$50,584,000
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$46,301,000
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Sales
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$245,486,000
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5.970862
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Accounts Receivable
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$41,114,000
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Long Term Debt
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$13,926,000
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$12,907,000
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$12,869,000
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$11,922,000
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12
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Accounts Receivable Turn-Days
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Other Liabilities
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$12,017,000
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$26,943,000
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$21,783,000
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$18,139,000
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360
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360
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60.29281
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Deferred Liability Charges
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$25,488,000
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$15,050,000
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$15,273,000
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$13,514,000
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Accts. Rec. Turnover
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$ 5.97
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Minority Interest
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$789,000
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$1,885,000
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$1,125,000
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$638,000
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13
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Accounts Payable Turnover
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Total Liabilities
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$124,217,000
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$121,310,000
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$101,634,000
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$90,514,000
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Cost of Goods Sold
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$188,312,000
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3.595113
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Accounts Payable
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$52,380,000
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Shareholders Equity:
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14
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Average Payment Period
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Preferred Stocks
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$0
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$21,000
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$0
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$21,000
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360
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360
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100.1359
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Common Stocks
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$5,185,000
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$5,382,000
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$5,552,000
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$5,595,000
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Accts. Pay. Turnover
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$ 3.60
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Capital Surplus
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$0
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$6,366,000
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$4,480,000
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$4,243,000
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Retained Earnings
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$78,364,000
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$37,763,000
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$38,700,000
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$32,344,000
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Negative Goodwill
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$0
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$61,000
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$0
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$0
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Other Equity
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$0
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$27,124,000
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$31,032,000
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$24,796,000
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Total Equity
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$83,549,000
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$76,717,000
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$79,764,000
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$66,999,000
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Total Liabilities/Equity
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$207,766,000
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$198,027,000
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$181,398,000
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$157,513,000
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UAD 340 Fall 2021 Exam 3 Version A November 1, 2021/Dr. Michael O. Minor
Follow the instructions for each section. Your answers should reflect the content of the class PowerPoint Presentations, Unit 3 readings and other handouts, 5:59 p.m. CDT tomorrow (Tuesday, November 2, 2021). Be sure to include the question number before you type your answers. Using “Googled” information in your responses, although the information might be correct, will result in no credit for that question. Type your name in the header of your completed document so that your name shows on each page.
Section 1. Which Is Better?
1. Which is better: an annuity or a series of equal payments occurring over a specified number of periods? Explain your answer.
Section 2. Time Value of Money Problems
Show the steps you used to solve the problem or attach an Excel spreadsheet showing your work. Be sure to label each problem.
2. Tiffany is trying to save $140,000 for a down payment on a new house in 2034. How much must she deposit today in a special IRA account earning 5% interest?
3. Courtney has been an avid saver. He has accumulated $137,000. He wants to have $475,000 in 2025 to pay cash for a new home. What interest rate must he invest his money to reach his savings goal?
4. Ashley wants to know how long it will take for her children’s college fund to grow from $197,000 to $554,000 if it is invested in an account with a quoted annual interest rate of 3.75% with monthly compounding of interest?
5. A Bishop Companies bond provides an 8% coupon. The appropriate discount rate is 10%. What is the value of the perpetual bond?
6. How long will it take Jercoby’s investment of $7500 to double in value at a 3% return?
7. Suppose that you have $1,250 today and invest it at a 9% rate of return for 8 years, what will be the value of your investment in 8 years?
Section 3. Miscellaneous Problems
Answer each question thoroughly.
8. Emmanuel is considering buying a ten-year-old used tire business. It has great sales with four hundred locations across the country. The company is publicly traded on NASDAQ. He has hired you to be his consultant to determine the value of the company. What valuation method would you use? Explain your choice or choices in detail.
9. Israel’s best friend wanted to know what he had been learning in Dr. Minor’s class about long term securities. Pretend you are Israel, unless you’re Israel, list and define the different types of long-term securities discussed in class so far.
10. David and Nathan are discussing valuing preferred stocks and perpetuities. David says that you must use the mixed cashflow method to find the value for preferred stocks and the payment divided the interest rate to find the value of a perpetuity. Nathan says that you can solve both the same way by taking the payment and dividing by the appropriate discount rate. Who is right? Why?
Section 4. Investment Decision
Explain step-by-step, using the examples from class as a template, how you solve the following problem. If you do not list the steps and the associated answers for each step, you will not receive full credit.
11. Ronald is considering selling his company – the Bishop Companies. You are considering making an offer to buy his company. You will not pay more than $200 million for his company. Using the Bishop Companies financial statements A located in the Unit 2 materials, determine the intrinsic value of the company. To find the intrinsic value, use the after tax cashflow for each year 2018 through 2020. Assume that the current year after tax cashflow is a perpetuity. How much is the company worth? Considering your purchase price ceiling, would you make an offer to purchase the company? How much would you offer? You have a required rate of return of 13% plus the current annualized inflation rate.
Yosvany1
Yosvanyhelp.docx
