BUSN460 Individual Financial Analysis Project
ProfArgeol
finacial_info.docx1. 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.
2. 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.
3. There is one warehouse for shipping of books and one plant for manufacturing.
4. 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.
5. The IPO takes place at the beginning of 1999.
6. The CD/DVDs were customized beginning in 1998. The MP3 players were built beginning in the start of 1999.
7. The online gaming company was purchased for $30,000,000 and both Elizabeth and Andrew initiated the process.
8. 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.
9. It has some type of international operations, hence the need for a "translation gain or loss" in owner's equity.
10. 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 |
|
|
Marketable Securities |
$117,000,000 |
|
|
Accounts Receivable |
$33,000,000 |
|
|
Less: Allowance for Bad Debts |
$(880,000) |
|
|
Net Accounts Receivable |
$32,120,000 |
|
|
|
|
|
|
Inventory |
|
|
|
Raw Materials |
$2,000,000 |
|
|
Work-in-process |
$1,000,000 |
|
|
Finished Goods |
$5,000,000 |
|
|
Inventory Purchased for Resale |
$24,000,000 |
|
|
Total Inventory |
$32,000,000 |
|
|
|
|
|
|
Plant, Property and Equipment |
$6,700,000 |
|
|
Less: Accumulated Depreciation |
$(320,000) |
|
|
Net Plant, Property and Equipment |
$6,380,000 |
|
|
|
|
|
|
Prepaid Expenses |
$200,000 |
|
|
|
|
|
|
Goodwill and Other Purchased Intangibles |
$28,000,000 |
|
|
Less: Amortization |
$(700,000) |
|
|
Net Goodwill and Other Purchased Intangibles |
$27,300,000 |
|
|
|
|
|
|
Total Assets |
$235,900,000 |
|
|
|
||
|
LIABILITIES AND OWNERS' EQUITY |
||
|
Accounts Payable |
$22,000,000 |
|
|
Accrued Advertising |
$11,800,000 |
|
|
Other Liabilities and Accrued Expense |
$1,400,000 |
|
|
Current Portion of Long-Term Debt |
$2,300,000 |
|
|
|
|
|
|
Long Term Debt |
$57,400,000 |
|
|
|
|
|
|
Preferred Stock, $100 par value per share, |
|
|
|
100,000 authorized, 0 shares issued and outstanding |
$0 |
|
|
|
|
|
|
Common Stock, $1 par value per share, |
|
|
|
250,000,000 shares authorized, 13,000,000 shares |
|
|
|
issued, 12,900,000 outstanding |
$13,000,000 |
|
|
|
|
|
|
Additional Paid-in-Capital in excess of par value, Common Stock |
$117,000,000 |
|
|
|
|
|
|
Treasury Stock |
$(1,000,000) |
|
|
|
|
|
|
Retained Earnings (less Cash Dividends Paid) |
$12,000,000 |
$11,000,000 |
|
|
|
|
|
Total Liabilities and Owner's Equity |
$235,900,000 |
|
|
|
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 |
|
|
|
|
|
Operating Expenses: |
|
|
|
Advertising and Sales |
$(26,000,000) |
$(3,000,000) |
|
Depreciation |
$(160,000) |
|
|
Salaries and Wages |
$(1,700,000) |
$(1,400,000) |
|
Product Development |
$(4,000,000) |
$(1,200,000) |
|
Merger and Acquisition Related Costs, including |
|
|
|
Amortization of Goodwill and Other Intangibles |
$(700,000) |
$0 |
|
Total Operating Expenses |
$(32,560,000) |
|
|
|
|
|
|
Income from Continuing Operations Before Income Taxes |
$8,440,000 |
|
|
|
|
|
|
Less: Income Taxes at 35% |
$(2,954,000) |
|
|
Income from Continuing Operations |
$5,486,000 |
|
|
|
|
|
|
Discontinued Operations: |
|
|
|
Income from Operations of Discontinued Division |
|
|
|
(less applicable income taxes) |
$350,000 |
|
|
Loss on Disposal of Discontinued Division |
|
|
|
(less applicable income taxes) |
$(150,000) |
|
|
Total Gain from Discontinued Operations |
$200,000 |
|
|
|
|
|
|
Extraordinary Items: |
|
|
|
Loss from fire (less applicable income taxes) |
$(200,000) |
|
|
|
|
|
|
Net Income |
$5,486,000 |
|
|
|
||
|
Divisional Revenues |
||
|
Books |
$15,000,000 |
$7,000,000 |
|
Online gaming |
$25,000,000 |
|
|
Customized MP3/CD/DVD |
$10,000,000 |
$3,000,000 |
|
Customized MP3/CD/DVD Inventory at end of 1999 |
$8,000,000 |
|
CanGo, Inc. is a fictional Internet company that exists to support the Mastering Series project.
