1. Compute the following profitability ratios for Styker and Conmed:
   1. ROA
   2. RONA
   3. ROE
   4. Compute the following ratios that provide insight into the operations of Stryker and Conmed
      1. Profit Margin (net)
      2. Asset turnover (total)
      3. Gross Margin %
      4. Compute the effective interest rate that Stryker and Conmed pay on their debt.

1B. The operating spread is defined as the difference between RONA and the effective interest rate. Compute the operating spread for both Stryker and Conmed.

1C.Compute the D/E ratio using average total debt and average total equity for Stryker and Conmed.

 
 
 
 
 

Transcribed Image Text:

CONMED CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended December 31, 2020, 2019 and 2018 (In thousands) 2020 2019 2018 Cash flows from operating activities: Net income 9,517 S 28,620 S 40,854 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation Amortization of debt discount 18,044 18,688 8,302 3,454 18,530 9,692 Amortization of defered debt issuance costs 3,723 1,042 42,231 Amortization 54,581 53,635 Stock-based compensation Impairment charges Deferred income taxes 13,111 11,779 10,037 312 4,212 (14,234) (6,310) 2,063 Loss on early extinguishment of debt Increase (decrease) in cash flows from changes in assets and liabilities, net of acquired assets: Accounts receivable 300 - (13,943) (117) 13,920 (17,460) Inventories (30,397) (2,977) (1,644) (4,123) (8,170) 3,488 (15,037) Accounts payable 38 12,109 Income taxes (1,867) (2,193) Accrued compensation and benefits 9,957 9,044 (24,216) Other assets (22,263) 4,548 Other liabilities (6,515) 55,014 66,513 33,847 Net cash provided by operating activities 64,531 95,133 74,701 Cash flows from investing activities: Payments related to business and asset acquisitions, net of cash acquired Proceeds from sale of a facility Purchases of property, plant and equipment (367,596) (3,852) 3,227 (13,013) (13,638) (16,507) (16,507) (20,066) Net cash used in investing activities (387,662) Cash flows from financing activities: Payments on term loan Proceeds from term loan (13,250) (154,312) 265,000 (13,125) Payments on revolving line of credit Proceeds from revolving line of credit (212,000) (484,000) (168,000) 153,000 199,000 392,000 Proceeds from convertible notes 345,000 Payments on mortgage notes Payments related to contingent consideration Payments related to debt issuance costs Dividends paid on common stock Purchases of convertible notes hedges Proceeds from issuance of warrants (1,574) (21,323) (913) (22,443) (836) (2,671) (3,153) (22,818) (6,466) (16,210) (22,600) (51,198) 30,567 3,936 Other, net 2,833 2,113 Net cash provided by (used in) financing activities (52,059) 300,881 (72,265) Effect of exchange rate changes on cash and cash equivalents 2,666 (7) (1,040) Net increase (decrease) in cash and cash equivalents 1,500 8,345 (15,111) Cash and cash equivalents at beginning of year 25,856 17,511 32,622 Cash and cash equivalents at end of year 27,356 S 25,856 S 17,511 CONMED CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended December 31, 2020, 2019 and 2018 (In thousands) 2020 2019 2018 Cash flows from operating activities: Net income 9,517 S 28,620 S 40,854 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation Amortization of debt discount 18,044 18,688 8,302 3,454 18,530 9,692 Amortization of defered debt issuance costs 3,723 1,042 42,231 Amortization 54,581 53,635 Stock-based compensation Impairment charges Deferred income taxes 13,111 11,779 10,037 312 4,212 (14,234) (6,310) 2,063 Loss on early extinguishment of debt Increase (decrease) in cash flows from changes in assets and liabilities, net of acquired assets: Accounts receivable 300 - (13,943) (117) 13,920 (17,460) Inventories (30,397) (2,977) (1,644) (4,123) (8,170) 3,488 (15,037) Accounts payable 38 12,109 Income taxes (1,867) (2,193) Accrued compensation and benefits 9,957 9,044 (24,216) Other assets (22,263) 4,548 Other liabilities (6,515) 55,014 66,513 33,847 Net cash provided by operating activities 64,531 95,133 74,701 Cash flows from investing activities: Payments related to business and asset acquisitions, net of cash acquired Proceeds from sale of a facility Purchases of property, plant and equipment (367,596) (3,852) 3,227 (13,013) (13,638) (16,507) (16,507) (20,066) Net cash used in investing activities (387,662) Cash flows from financing activities: Payments on term loan Proceeds from term loan (13,250) (154,312) 265,000 (13,125) Payments on revolving line of credit Proceeds from revolving line of credit (212,000) (484,000) (168,000) 153,000 199,000 392,000 Proceeds from convertible notes 345,000 Payments on mortgage notes Payments related to contingent consideration Payments related to debt issuance costs Dividends paid on common stock Purchases of convertible notes hedges Proceeds from issuance of warrants (1,574) (21,323) (913) (22,443) (836) (2,671) (3,153) (22,818) (6,466) (16,210) (22,600) (51,198) 30,567 3,936 Other, net 2,833 2,113 Net cash provided by (used in) financing activities (52,059) 300,881 (72,265) Effect of exchange rate changes on cash and cash equivalents 2,666 (7) (1,040) Net increase (decrease) in cash and cash equivalents 1,500 8,345 (15,111) Cash and cash equivalents at beginning of year 25,856 17,511 32,622 Cash and cash equivalents at end of year 27,356 S 25,856 S 17,511

Answer rating: 100% (QA)

Answer ROA027 RONA067 ROE076 Profit mar... View the full answer