A 1 Build a Mcdel 2 Chapter: 3 Problem: 4 B C D E F G H 11/26/2018 3 15 5 Joshua & White Technologies: December 31 Balance Sheets 6 (Thousands of Dollars) 7 8 Assets 2019 2018 9 Cash and cash equivalents $21,000 $20,000 10 Short-term investments 3,759 3,240 11 Accounts Receivable 52,500 48,000 12 Inventories 84,000 56,000 13 Total current assets $161,259 $127,240 14 Net fixed assets 223,097 200,000 15 Total assets $384.356 $327.240 16 17 Liabilities and equity 18 Accounts payable $33,600 $32,000 19 Accruals 12,600 12,000 20 Notes payable 19,929 6,480 21 Total current liabilities $66,129 $50,480 22 Long-term debt 67.662 58,320 23 Total liabilities $133,791 $108,800 24 Common stock 178,440 178,440 72.125 40,000 $250,565 $218.440 $384.356 $327.240 25 Retained Earnings 26 Total common equity 27 Total liabilities and equity 28 29 Joshua & White Technologies December 31 Income Statements 30 (Thousands of Dollars) 31 2019 32 Sales $420,000 2018 $400.000 33 COGS except excluding depr. and am 300,000 298,000 34 Depreciation and Amortization 19,660 18.000 35 Other operating expenses 27,600 22,000 36 EBIT $72,740 $62,000 37 Interest Expense 5,740 4,460 38 EBT $67,000 $57,540 39 Taxes (25%) 16,750 14,385 40 Net Income $50.250 $34.524 41 42 Common dividends $18,125 $17,262 43 Addition to retained earnings $32,125 $17,262 Build a Model B C Al A 40 Net Income 41 42 Common dividends x 'Build a Model D $50,250 E F $34,524 $18,125 $17,262 13 Addition to retained earnings $32,125 $17,262 44 5 Other Data 6 Year-end Stock Price 2019 2018 $90.00 $96.00 7 # of shares (Thousands) 4,052 4,000 8 Lease payment (Thousands of Dollars $20,000 $20,000 9 Sinking fund payment (Thousands of $5,000 $5,000 0 1 Ratio Analysis 2019 2018 Industry Avg 2 Liquidity Ratios 3 Current Ratio Quick Ratio 5 Asset Management Ratios 6 Inventory Turnover (Total COGS/Inventories) 7 Days Sales Outstanding Fixed Assets Turnover 9 Total Assets Turnover Debt Management Ratios Debt Ratio (Total debt-to-assets) Liabilities-to-assets ratio Times-interest-earned ration EBITDA coverage ratio Profitability Ratios Profit Margin Basic Earning Power Return on Assets Return on Equity Market Value Ratios Earnings per share Price-to-earnings ratio Cash flow per share Price-to-cash flow ratio Book Value per share Market-to-book ratio 2.58 1.53) 7.69 47.45 2.04 1.23 20.0% 32.1% 15.33 4.18 8.86% 19.48% 10.93% 16.10% NA 10.65 NA 7.11 NA 1.72 a. Has Joshua & White's liquidity position improved or worsened? Explain. Build a Model + 9 A1 A 82 Vines. Unless you need to edit, it's safer to stay in 'Build a Model B C D E F G 83 b. Has Joshua & White's ability to manage its assets improved or worsened? Explain. 84 85 86 87 88 89 c. How has Joshua & White's profitability changed during the last year? 90 91 92 93 d. Perform an extended Du Pont analysis for Joshua & White for each year. PM TA Turnover x Equity Multiplier 94 95 2019 ROE = 20.05% 11.96% 1.09 1.53 96 2018 15.80% 8.63% 1.22 1.50 97 98 99 100 101 102 e. Perform a common size analysis. What has happened to the composition (that is, percentage in each category) of assets and liabilities? 103 104 105 Common Size Balance Sheets 106 Assets 107 Cash and cash equivalents 108 Short-term investments 109 Accounts Receivable 110 Inventories 111 Total current assets 112 Net fixed assets 113 Total assets 114 115 Liabilities and equity 116 Accounts payable 117 Accruals 118 Notes payable 2019 2018 2019 2018 119 Total current liabilities 120 Long-term debt 121 Total liabilities 122 Common stock 123 Retained Earnings 124 Total common equity Build a Model + A1 fx B C 'Build a Model 121 Total liabilities 122 Common stock 123 Retained Earnings 124 Total common equity 125 Total liabilities and equity 126 127 Common Size Income Statements 128 Sales 129 COGS except excluding depr. and amort 130 Depreciation and Amortization 131 Other operating expenses 132 EBIT 133 Interest Expense 134 EBT 135 Taxes (25%) 136 Net Income 137 138 139 140 D E G 2019 2018 141 142 f. Perform a percent change analysis. What does this tell you about the change in profitabilit and asset utilization? 143 144 145 Percent Change Balance Sheets Base 146 Assets 2019 2018 147 Cash and cash equivalents 148 Short-term investments 149 Accounts Receivable 150 Inventories 151 Total current assets 152 Net fixed assets 153 Total assets 154 155 Base 156 Liabilities and equity 2019 2018 157 Accounts payable 158 Accruals 159 Notes payable 160 Total current liabilities 161 Long-term debt 162 Total liabilities 163 Common stock Ready Build a Model X fx 'Build a Model B C D E F G 1 A Common stock Retained Earnings Total common equity Total liabilities and equity Base Percent Change Income Statement 2019 2018 Sales COGS except excluding depr. and amort. Depreciation and Amortization Other operating expenses EBIT Interest Expense EBT Taxes (25%) Net Income