Wilson Distributors, Inc. is a distributor of Miller beer as well as several lesser-known brands. The...
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Wilson Distributors, Inc. is a distributor of Miller beer as well as several lesser-known brands. The father owns the business, but he has been gradually turning it over to his son the last few years. There are 20 employees including Father and Son The current situation contains both good and bad news. Good news: Sales have increased $400,000 (15%) in the last year and the son is very proud of this accomplishment. Required 1. 2. 3 4 5. 6. Bad news: The Company is behind on its payments to the brewery (terms net 15 days) and the brewery has demanded payment in full and put future payments on a COD basis. 7. Look at the Balance Sheet and Income Statement accounts and note any trends or concerns you may see. Complete the ratios on the Ratio Analysis Worksheet. Do a trend analysis on the ratios you have computed. Compare the ratios to industry averages and red flag any problems that you see. Review the "cause and effect" analysis on the problem ratios. Open the "Internal Bank Load Review" file and fill-out the form. Re-attached the filled-out form in Blackboard or email the form. 2 A B Balance Sheets December, 31, 2017, 2018, 2019 (000's) Assets Cash Accounts Receivable Inventory Prepaid Expenses Other Total Current Assets 3 Fixed Assets, Net 4 Total Assets 5 6 Liabilities 7 Notes Payable - Bank 8 Accounts Payable 19 Accrued Expenses Total Current Liabilities 21 Long-Term Debt 22 Total Liabilities 24 Net Worth 25 Capital Stock 26 Retained Earnings 27 Total Net Worth 28 29 Total Liabilitities and Net Worth $ $ FA 2017 $ $ $ $ GAGAGA A $ $ $ $ $ 15 $ 12 $ 108 $ 33 $ 7 $ 175 $ 167 $ 342 $ GA 2018 $ 70 $ 29 $ 99 S 50 $ 149 S 342 $ 10 $ $ 183 $ $ 193 $ 2019 9 $ 14 $ 118 $ 40 $ 12 $ 193 $ 309 231 $ 289 424 $ 598 27 $ 73 $ 35 $ 135 S 63 $ 198 $ 10 $ 216 $ 226 S 40 20 213 30 6 424 S 97 133 49 279 82 361 10 227 237 598 Sales Cost of Good Sold Gross Profit Overhead Expenses: Deliveries Salaries Warehouse Salaries Sales Salaries Office Salaries Rent Truck Costs Depreciation Payroll Tax Union Pension Plan Utilities Insurance Warehouse Expense Office Supplies Legal & Accounting Dues & Subscriptions Travel & Entertainment Advertising Selling and Promotional Donations Profit Sharing Plan Interest Expense Total Overhead Expenses Net Profit Before Tax Income Tax Net Profit After Tax Expenses by Function: $ $ $ $ $ $ GA GA GA GA GA GA GA GA GA GA GA GA GA $ $ $ $ $ $ $ $ $ $ $ $ 69 69 69 69 69 69 $ $ $ S $ $ Warehouse & Delivery General & Administrative S Selling 696969 $ 2017 2,400 $ 1,836 $ 564 130 C4FQ3581 21 22 $ 69 5 7 $ 20 GALA $ 68 48 $ 18 $ 99 $ GALA 18 $ 17 $ 30 $ GA $ $ 7 $ 4 $ GA GA 3 $ 4 $ $ 26 $ 1 45 7 $ $ $ 507 S 57 $ 15 $ 42 $ 228 $ 96 S 125 S 2018 2,618 $ 3,006 2,014 $ 2,345 604 $ 661 SEKS83 156 $ 29 $ 75 $ 52 $ 18 $ 22 23 21 $ 25 $ 33 $ 6 8 $ $ 23 $ 6 $ 3 $ $ $ $ $ 32 9 29 1 33 $ $ 8 $ 69 563 S 8 33 69 69 69 69 $ $ 2019 325 S 108 S 130 S 186 35 80 55 18 34 22 34 37 8 11 30 15 6 3 7 11 31 1 10 14 648 13 2 11 390 125 146 1. 2. 3. 4. Solvency and Liquidity Ratios Current Ratio: Quick Ratio: Safety Ratio Debt to Worth Ratio: Profitablility Ratios Gross Profit Margin: Net Profit Margin (ROS): Asset Management Ratios Sales to Assets: Return on Assets (ROA): Return on Net Worth (ROE): Inventory Turnover: Inventory Turnover in Days: Accounts Payable Turnover: Accounts Payable in Days: CA/CL (Cash + A/R)/CL TL/Tangible N/W Gross Profit/Sales Net Profit B.T./Sales Sales/Total Assets Net Profit B.T./Total Assets Net Profit B.T./Tangible N/W COGS/Inventory 360/Inventory Turnover COGS/Accounts Payable 360/Acct. Payable Turnover 2017 1.77 0.27 0.77 23.50% 2.38% 7.02 16.70% 29.5% 17 21 26.2 14 2018 1.43 0.17 0.88 23.07% 1.57% 6.17 9.67% 18.1% 17.07 21.09 27.59 13.05 2019 Average Measure 1.7 0.7 Times 1.4 23.00% Percent 4.86% Percent 5.4 Times 10.10% Percent 12.7 26.4% Percent 29 24 Times 15 Times Days Times Days Expense Categories 1. Warehouse & Delivery Exp. 2. Gen. & Admin. Expense Selling Expense 3. Cases/Drivers Information Cases per Driver a Day (260 days) 4. 5. Number of Drivers 6. Number of Cases Sold 2017 9.5% 4.0% 5.2% 340 6 530,400 2018 12.4% 4.1% 5.0% 308 7 560,000 2019 8 620,000 Industry Average Measure 8.5% Percent 4.2% Percent 5.5% Percent 400 Number Number Number Wilson Distributors, Inc. is a distributor of Miller beer as well as several lesser-known brands. The father owns the business, but he has been gradually turning it over to his son the last few years. There are 20 employees including Father and Son The current situation contains both good and bad news. Good news: Sales have increased $400,000 (15%) in the last year and the son is very proud of this accomplishment. Required 1. 2. 3 4 5. 6. Bad news: The Company is behind on its payments to the brewery (terms net 15 days) and the brewery has demanded payment in full and put future payments on a COD basis. 7. Look at the Balance Sheet and Income Statement accounts and note any trends or concerns you may see. Complete the ratios on the Ratio Analysis Worksheet. Do a trend analysis on the ratios you have computed. Compare the ratios to industry averages and red flag any problems that you see. Review the "cause and effect" analysis on the problem ratios. Open the "Internal Bank Load Review" file and fill-out the form. Re-attached the filled-out form in Blackboard or email the form. 2 A B Balance Sheets December, 31, 2017, 2018, 2019 (000's) Assets Cash Accounts Receivable Inventory Prepaid Expenses Other Total Current Assets 3 Fixed Assets, Net 4 Total Assets 5 6 Liabilities 7 Notes Payable - Bank 8 Accounts Payable 19 Accrued Expenses Total Current Liabilities 21 Long-Term Debt 22 Total Liabilities 24 Net Worth 25 Capital Stock 26 Retained Earnings 27 Total Net Worth 28 29 Total Liabilitities and Net Worth $ $ FA 2017 $ $ $ $ GAGAGA A $ $ $ $ $ 15 $ 12 $ 108 $ 33 $ 7 $ 175 $ 167 $ 342 $ GA 2018 $ 70 $ 29 $ 99 S 50 $ 149 S 342 $ 10 $ $ 183 $ $ 193 $ 2019 9 $ 14 $ 118 $ 40 $ 12 $ 193 $ 309 231 $ 289 424 $ 598 27 $ 73 $ 35 $ 135 S 63 $ 198 $ 10 $ 216 $ 226 S 40 20 213 30 6 424 S 97 133 49 279 82 361 10 227 237 598 Sales Cost of Good Sold Gross Profit Overhead Expenses: Deliveries Salaries Warehouse Salaries Sales Salaries Office Salaries Rent Truck Costs Depreciation Payroll Tax Union Pension Plan Utilities Insurance Warehouse Expense Office Supplies Legal & Accounting Dues & Subscriptions Travel & Entertainment Advertising Selling and Promotional Donations Profit Sharing Plan Interest Expense Total Overhead Expenses Net Profit Before Tax Income Tax Net Profit After Tax Expenses by Function: $ $ $ $ $ $ GA GA GA GA GA GA GA GA GA GA GA GA GA $ $ $ $ $ $ $ $ $ $ $ $ 69 69 69 69 69 69 $ $ $ S $ $ Warehouse & Delivery General & Administrative S Selling 696969 $ 2017 2,400 $ 1,836 $ 564 130 C4FQ3581 21 22 $ 69 5 7 $ 20 GALA $ 68 48 $ 18 $ 99 $ GALA 18 $ 17 $ 30 $ GA $ $ 7 $ 4 $ GA GA 3 $ 4 $ $ 26 $ 1 45 7 $ $ $ 507 S 57 $ 15 $ 42 $ 228 $ 96 S 125 S 2018 2,618 $ 3,006 2,014 $ 2,345 604 $ 661 SEKS83 156 $ 29 $ 75 $ 52 $ 18 $ 22 23 21 $ 25 $ 33 $ 6 8 $ $ 23 $ 6 $ 3 $ $ $ $ $ 32 9 29 1 33 $ $ 8 $ 69 563 S 8 33 69 69 69 69 $ $ 2019 325 S 108 S 130 S 186 35 80 55 18 34 22 34 37 8 11 30 15 6 3 7 11 31 1 10 14 648 13 2 11 390 125 146 1. 2. 3. 4. Solvency and Liquidity Ratios Current Ratio: Quick Ratio: Safety Ratio Debt to Worth Ratio: Profitablility Ratios Gross Profit Margin: Net Profit Margin (ROS): Asset Management Ratios Sales to Assets: Return on Assets (ROA): Return on Net Worth (ROE): Inventory Turnover: Inventory Turnover in Days: Accounts Payable Turnover: Accounts Payable in Days: CA/CL (Cash + A/R)/CL TL/Tangible N/W Gross Profit/Sales Net Profit B.T./Sales Sales/Total Assets Net Profit B.T./Total Assets Net Profit B.T./Tangible N/W COGS/Inventory 360/Inventory Turnover COGS/Accounts Payable 360/Acct. Payable Turnover 2017 1.77 0.27 0.77 23.50% 2.38% 7.02 16.70% 29.5% 17 21 26.2 14 2018 1.43 0.17 0.88 23.07% 1.57% 6.17 9.67% 18.1% 17.07 21.09 27.59 13.05 2019 Average Measure 1.7 0.7 Times 1.4 23.00% Percent 4.86% Percent 5.4 Times 10.10% Percent 12.7 26.4% Percent 29 24 Times 15 Times Days Times Days Expense Categories 1. Warehouse & Delivery Exp. 2. Gen. & Admin. Expense Selling Expense 3. Cases/Drivers Information Cases per Driver a Day (260 days) 4. 5. Number of Drivers 6. Number of Cases Sold 2017 9.5% 4.0% 5.2% 340 6 530,400 2018 12.4% 4.1% 5.0% 308 7 560,000 2019 8 620,000 Industry Average Measure 8.5% Percent 4.2% Percent 5.5% Percent 400 Number Number Number
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Related Book For
Managerial Accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Posted Date:
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