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Fictional Company Financial Statements |
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| Balance Sheets |
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PROJECTIONS |
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| Assets |
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2015 |
2016 |
2017E |
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| Cash and equivalents |
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$9,000 |
$7,282 |
$14,000 |
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| Short-term investments |
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$48,600 |
$20,000 |
$71,632 |
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| Accounts receivable |
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$351,200 |
$632,160 |
$878,000 |
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| Inventories |
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$715,200 |
$1,287,360 |
$1,716,480 |
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| Total current assets |
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$1,124,000 |
$1,946,802 |
$2,680,112 |
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| Gross Fixed Assets |
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$491,000 |
$1,202,950 |
$1,220,000 |
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| Less Accumulated Dep. |
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$146,200 |
$263,160 |
$383,160 |
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| Net Fixed Assets |
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$344,800 |
$939,790 |
$836,840 |
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| Total Assets |
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$1,468,800 |
$2,886,592 |
$3,516,952 |
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| Liabilities and equity |
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| Accounts payable |
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$145,600 |
$324,000 |
$359,800 |
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| Notes payable |
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$200,000 |
$720,000 |
$300,000 |
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| Accruals |
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$136,000 |
$284,960 |
$380,000 |
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| Total current liabilities |
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$481,600 |
$1,328,960 |
$1,039,800 |
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| Long-term bonds |
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$323,432 |
$1,000,000 |
$500,000 |
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| Total liabilities |
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$805,032 |
$2,328,960 |
$1,539,800 |
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| Common stock (100,000 shares) |
$460,000 |
$460,000 |
$1,680,936 |
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| Retained earnings |
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$203,768 |
$97,632 |
$296,216 |
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| Total common equity |
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$663,768 |
$557,632 |
$1,977,152 |
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| Total liabilities and equity |
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$1,468,800 |
$2,886,592 |
$3,516,952 |
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| Income Statements |
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2015 |
2016 |
2017E |
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| Net sales |
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$3,432,000 |
$5,834,400 |
$7,035,600 |
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| Costs of Goods Sold Except Depr. |
$2,864,000 |
$4,980,000 |
$5,800,000 |
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| Depreciation and amortization |
$18,900 |
$116,960 |
$120,000 |
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| Other Expenses |
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$340,000 |
$720,000 |
$612,960 |
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| Total Operating Cost |
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$3,222,900 |
$5,816,960 |
$6,532,960 |
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| Earnings before interest and taxes (EBIT) |
$209,100 |
$17,440 |
$502,640 |
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| Less interest |
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$62,500 |
$176,000 |
$80,000 |
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| Pre-tax earnings |
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$146,600 |
($158,560) |
$422,640 |
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| Taxes (40%) |
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$58,640 |
($63,424) |
$169,056 |
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| Net Income before preferred dividends |
$87,960 |
($95,136) |
$253,584 |
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| EPS |
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$0.880 |
($0.951) |
$1.014 |
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| DPS |
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$0.220 |
$0.110 |
$0.220 |
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| Book Value Per Share |
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$6.638 |
$5.576 |
$7.909 |
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| Other Info: |
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2015 |
2016 |
2017E |
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| Year-end common stock price |
$8.50 |
$6.00 |
$12.17 |
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| Year-end shares outstanding |
100,000 |
100,000 |
250,000 |
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| Tax rate |
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40% |
40% |
40% |
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| Lease payments |
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$40,000 |
$40,000 |
$40,000 |
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| Calculated Data: Ratios |
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Industry |
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2015 |
2016 |
2017E |
Average |
Comment |
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| Liquidity ratios |
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| Current Ratio |
2.33 |
1.46 |
2.58 |
2.70 |
Below industry standard |
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| Quick Ratio |
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0.85 |
0.50 |
0.93 |
1.00 |
Below industry standard |
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Industry |
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| Asset Management ratios |
2015 |
2016 |
2017E |
Average |
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| Inventory Turnover |
4.03 |
3.96 |
7.48 |
6.10 |
Above industry standard |
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| Days Sales Outstanding |
37.35 |
39.55 |
45.55 |
32.00 |
Above industry standard |
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| Fixed Asset Turnover |
9.95 |
6.21 |
8.41 |
7.00 |
Above industry standard |
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| Total Asset Turnover |
2.34 |
2.02 |
2.00 |
2.50 |
Below industry standard |
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Industry |
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| Debt Management ratios |
2015 |
2016 |
2017E |
Average |
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| Debt Ratio |
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35.6% |
59.6% |
22.75% |
32.0% |
Below industry standard |
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| Liabilities-to-assets Ratio |
54.8% |
80.7% |
43.78% |
50.0% |
Below industry standard |
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| Times Interest Earned |
3.35 |
0.10 |
6.28 |
6.20 |
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| EBITDA Coverage Ratio |
2.61 |
0.81 |
5.52 |
8.00 |
Below industry standard |
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Industry |
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| Profitability ratios |
2015 |
2016 |
2017E |
Average |
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| Net Profit Margin |
2.6% |
-1.6% |
3.60% |
3.6% |
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| Operating Margin |
6.1% |
0.3% |
7.14% |
7.1% |
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| Gross Profit Margin |
16.6% |
14.6% |
17.56% |
15.5% |
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| Basic Earning Power |
14.2% |
0.6% |
14.29% |
17.8% |
Below industry standard |
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| Return on Assets |
6.0% |
-3.3% |
7.21% |
9.0% |
Below industry standard |
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| Return on Equity |
13.3% |
-17.1% |
12.83% |
18.0% |
Below industry standard |
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Industry |
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| Market Value ratios |
2015 |
2016 |
2017E |
Average |
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| Price-to Earnings Ratio |
9.66 |
-6.31 |
12.00 |
14.20 |
Below industry standard |
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| Price-to-Cash Flow Ratio |
7.95 |
27.49 |
0.00 |
7.60 |
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| Market-to-Book Ratio |
1.28 |
1.08 |
1.54 |
2.90 |
Below industry standard |
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| Book Value Per Share |
6.64 |
5.58 |
7.91 |
na |
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Use the extended DuPont equation to provide a summary and overview of Fictional Company'sprojected financial condition.
| DuPont Analysis |
ROE = |
P.M. X |
T.A.T.O. X |
Equity Multiplier |
| Fictional Co. |
2015 |
13.25% |
2.56% |
233.66% |
221.28% |
| Fictional Co. |
2016 |
-17.06% |
-1.63% |
202.12% |
517.65% |
| Fictional Co. |
2017E |
12.83% |
3.60% |
200.05% |
177.88% |
| Industry Average |
18.02% |
3.6% |
2.5 |
2.00 |
Attachment:- FS-Analysis-.rar