Mary Francis comes into your office later that morning.
"Good news! I think we've got strong potential investors!" Mary announces.
"That's great!" you reply.
"And now, they are asking for financial information" Mary states.
"Ok, I could provide a 50-page analysis for them!" you say.
"That's exactly what they don't want. I'm beginning to notice that some of the investors don't have a strong finance background, and the last thing we want to do is scare them off with too many financial figures" Mary explains. I would like for you to complete a presentation. However, I want you to keep it simple and clear. Using all 3 Financial Statements, please provide an analysis on Apix's assets, liabilities, cash, and profit. As well, choose 2 additional components on each of the sheets, and provide your initial impression on the company financial situation. Do you think you could handle this?"
"Of course! I'll get started on this right away."
Mary also indicates that she would like between 10-15 slides with 150-200 words in the notes page.
Financial Statements-
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Apex Printing
Balance Sheets
As of December 31, 2013 and 2012
|
|
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000$
|
000$
|
|
Assets
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2013
|
2012
|
|
Cash
|
6,000
|
5,700
|
|
Accounts Receivable
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2,350
|
2,300
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|
Inventory
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12,100
|
6,500
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Total Current Assets
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20,450
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14,500
|
|
Land
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25,000
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20,000
|
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Building & Equipment
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300,000
|
300,000
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|
Less: Accumulated Depreciation - Building & Equipment
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(187,850)
|
(160,000)
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|
Total Long Term Assets
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137,150
|
160,000
|
|
Total Assets
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157,600
|
174,500
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Liabilities and Stockholders' Equity
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|
|
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Accounts Payable
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4,600
|
3,500
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|
Salaries Payable
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0
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2,100
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Interest Payable
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1,500
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0
|
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Short Term Notes Payable
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12,000
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0
|
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Taxes Payable
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0
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5,600
|
|
Total Current Liabilities
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18,100
|
11,200
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|
Mortgate Payable
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54,950
|
100,000
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|
Total Long Term Liabilities
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54,950
|
100,000
|
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Common Stock
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60,000
|
60,000
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Retained Earnings
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24,550
|
3,300
|
|
Total Stockholders' Equity
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84,550
|
63,300
|
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Total Liabilities and Stockholders' Equity
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157,600
|
174,500
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|
Apex Printing
Income Statements
For the Periods Ended December 31, 2013 and 2012
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|
|
000$
|
000$
|
|
|
2013
|
2012
|
|
Revenue:
|
450,000
|
475,000
|
|
Less: Cost of Goods Sold
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(324,300)
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(374,500)
|
|
Less: Depreciation Expense
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(27,850)
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(26,000)
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Gross Margin
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97,850
|
74,500
|
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Selling, General & Administrative Expenses
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(29,100)
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(32,000)
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|
Income Before Interest & Taxes
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68,750
|
42,500
|
|
Interest Expense
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(7,500)
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(6,000)
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|
Income Before Taxes
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61,250
|
36,500
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|
Income Taxes
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(35,000)
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(30,000)
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|
Net Income
|
26,250
|
6,500
|
|
Apex Printing
Statement of Cash Flows
For the Period Ended December 31, 2013
|
|
|
000$
|
|
Cash Flows from Operating Activities:
|
|
|
Net Income
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26,250
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
Depreciation Expense
|
27,850
|
|
Increase in accounts receivable
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(50)
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|
Increase in inventory
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(5,600)
|
|
Decrease in salaries payable
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(2,100)
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|
Increase in interest payable
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1,500
|
|
Decrease in taxes payable
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(5,600)
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|
Increase in Short Term notes Payable
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12,000
|
|
Increase in accounts payable
|
1,100
|
|
Net Cash Flow from Operating Activities
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55,350
|
|
Cash Flows from Investing Activities:
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|
|
Cash paid to purchase land
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(5,000)
|
|
Net Cash Flow from Investing Activities
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(5,000)
|
|
Cash Flows From Financing Activities:
|
|
|
Cash paid for mortgage
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(45,050)
|
|
Cash paid for dividends
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(5,000)
|
|
Net Cash Flow from Financing Activities
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(50,050)
|
|
Net Increase in Cash
|
300
|
|
Plus: Cash Balance at December 31, 2012
|
5,700
|
|
Cash Balance at December 31, 2013
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6,000
|