For your company, assuming an anticipated 10% sales increase in the following year calculate the following: a. Working Assets in the most recent year that you have data for. b. Working Liabilities in the most recent year that you have data for. c. Working Investment in the same year. d. Working Investment Factor in the same year. e. New Working Investment in the following year. f. What are the company's additional working investment needs in the upcoming year? g. Can the company cover these additional needs internally? If not, how much it needs from external sources? It should be noted that items a through c have already been calculated in your worksheet but they should be shown again here for comparison purposes. 5. For your company, provide answers to the following questions: a. Why has leverage increased or decreased during this period? b. Is your company using debt efficiently? (Use the financial leverage index ratio) c. How well is your company covering fixed charges? (Use the times interest earned, the fixed charge coverage and the cash flow adequacy ratios).

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Assets ABC Consolidated Balance Sheets at December 31, 19X9 and 19X8 (In thousands) Current Assets Cash Marketable securities (note A) Accounts receivable, less allowance for doubtful accounts of $448 in 19X9 and $417 in 19X8 Inventories (note A) Prepaid expenses Total current assets Property, Plant, and Equipment (notes A, C, and E) Land Buildings and leasehold improvements Equipment Less accumulated depreciation and amortization Net property, plant, and equipment Other Assets (note A) Total Assets Liabilities and Stockholders' Equity Current Liabilities Accounts payable Notes payable-banks (note B) Current maturities of long-term debt (note C) Accrued liabilities Total current liabilities Deferred Federal Income Taxas (notes A and D) Long-Term Debt (note C) Total liabilities Stockholders' Equity Common stock, par value $1, authorized, 10,000,000 shares: Issued, 4,803,000 shares in 19X9 and 4,594,000 shares in 19X8 (note F) Additional paid-in capital Retained earnings Total stockholders' equity Total Liabilities and Stockholders' Equity The accompanying notes are an integral part of these state- ments. 19X9 $ 4,061 5,272 8,960 47,041 512 65,846 811 18,273 21,523 40,607 11,528 29,079 373 $95,298 $14,294 5,614 1,884 5,669 27,461 843 21,059 49,363 4,803 967 40.175 45,935 $95,298 19X8 $ 2.382 8,004 8,350 36,769 759 56,264 811 11.928 13.768 26.507 7,530 18,977 668 $75.909 $ 7,591 6,012 1,516 5,313 20,432 635 16.975 38,042 4,594 910 32,363 37,867 $75,909 Assets ABC Consolidated Balance Sheets at December 31, 19X9 and 19X8 (In thousands) Current Assets Cash Marketable securities (note A) Accounts receivable, less allowance for doubtful accounts of $448 in 19X9 and $417 in 19X8 Inventories (note A) Prepaid expenses Total current assets Property, Plant, and Equipment (notes A, C, and E) Land Buildings and leasehold improvements Equipment Less accumulated depreciation and amortization Net property, plant, and equipment Other Assets (note A) Total Assets Liabilities and Stockholders' Equity Current Liabilities Accounts payable Notes payable-banks (note B) Current maturities of long-term debt (note C) Accrued liabilities Total current liabilities Deferred Federal Income Taxas (notes A and D) Long-Term Debt (note C) Total liabilities Stockholders' Equity Common stock, par value $1, authorized, 10,000,000 shares: Issued, 4,803,000 shares in 19X9 and 4,594,000 shares in 19X8 (note F) Additional paid-in capital Retained earnings Total stockholders' equity Total Liabilities and Stockholders' Equity The accompanying notes are an integral part of these state- ments. 19X9 $ 4,061 5,272 8,960 47,041 512 65,846 811 18,273 21,523 40,607 11,528 29,079 373 $95,298 $14,294 5,614 1,884 5,669 27,461 843 21,059 49,363 4,803 967 40.175 45,935 $95,298 19X8 $ 2.382 8,004 8,350 36,769 759 56,264 811 11.928 13.768 26.507 7,530 18,977 668 $75.909 $ 7,591 6,012 1,516 5,313 20,432 635 16.975 38,042 4,594 910 32,363 37,867 $75,909

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