Corrigan Corporation is a small firm in textile industry of Fruitania. You are given the following...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Corrigan Corporation is a small firm in textile industry of Fruitania. You are given the following financial stements of Corrigan Corporation for two years, 2020 and 2021. You are also given data on some financial ratios for the textile industry. FIN310 HW 4 Due back in class on Feb. 20 Spring 2023 Corrigan Corporation is a small firm in textile industry of Fruitania. You are given the following financial stements of Corrigan Corporation for two years, 2020 and 2021. You are also given data on some financial ratios for the textile industry. (1) Use the set of ratios that are given for the industry and compute the same set of ratios for Corrigan Corporation for 2020 and 2021. (2) Using the ratios that you have computed and comparing them with the industry ratios, evaluate Corrigan's financial performance over the two year period as well as in comparison to its peers in the textile industry. Record your comments against each ratio. Please do not foget to use the footnotes given at the end of the financial data. Corrigan Corporation's Balance Sheet data as of December 31 Assets Cash Accounts receivable Inventories Total current assets Land and building Machinery Other fixed assets Total assets Liabilities and equity Accounts payable Accrued liabilities Notes payable Total current liabilities Long-term debt Common stock Retained earnings Total liabilities and equity Sales Cost of goods sold Gross operating profit General admin. and selling expenses Depreciation EBIT Interest EBT Taxes (25%) Net income 2021 72,000 $ 439,000 894,000 $ 1,405,000 238,000 132,000 61,000 $ 1,836,000 Per-Share Data EPS Cash dividends Market price (average) P/E ratio Number of shares outstanding $ $ Corrigan Corporation's December 31 Income Statements $ $ $ $ $ $ $ 2020 65,000 328,000 813,000 1,206,000 271,000 133,000 57,000 S 1,667,000 80,000 $ 45,010 476,990 602,000 $ 399,688 575,000 259,312 1,836,000 $ $ 2021 4,240,000 $ 3,680,000 560,000 $ 303,320 159,000 2021 $1.00 $1.10 $12.34 12.33 23,000 97,680 $ 67,000 30,680 $ 7,670 23,010 $ 72,708 40,880 457,912 571,500 258,898 575,000 261,602 1,667,000 2020 3,635,000 2,980,000 655,000 297,550 154,500 202,950 43,000 159,950 39,988 119,963 2020 $5.22 $0.95 $23.57 4.52 23,000 Once we have this information set, we can calculate the necessary ratios for this analysis. Ratio Analysis Liquidity Current ratio a Asset Management Inventory turnoverb Days sales outstanding Fixed assets turnoverb Total assets turnover Profitability Return on assets Return on equity Return on invested capital Profit margin Debt Management d Debt-to-capital ratio Market Value P/E ratio M/B ratio EV/EBITDA ratio ? ? ? ? ? ? ? ? ? ? ? ? ? 2021 ? Industry average ratios have been constant for the past 4 years. b Based on year-end balance sheet figures. ? ? ? ? ? ? ? ? ? ? ? ? 2020 Industry Avg YOUR COMMENTS 2.7 7.0 32 13.0 2.6 11.4% 18.2% 14.5% 4.4% 50.0% 6.0 1.5 6.0 c Calculation is based on a 365-day year. Measured as (Short-term debt + Long-term debt)/(Short-term debt + Long-term debt + Common equity). ? ~~~ ? ? ? ? ? ? ? ? ? ? ? ? Corrigan Corporation is a small firm in textile industry of Fruitania. You are given the following financial stements of Corrigan Corporation for two years, 2020 and 2021. You are also given data on some financial ratios for the textile industry. FIN310 HW 4 Due back in class on Feb. 20 Spring 2023 Corrigan Corporation is a small firm in textile industry of Fruitania. You are given the following financial stements of Corrigan Corporation for two years, 2020 and 2021. You are also given data on some financial ratios for the textile industry. (1) Use the set of ratios that are given for the industry and compute the same set of ratios for Corrigan Corporation for 2020 and 2021. (2) Using the ratios that you have computed and comparing them with the industry ratios, evaluate Corrigan's financial performance over the two year period as well as in comparison to its peers in the textile industry. Record your comments against each ratio. Please do not foget to use the footnotes given at the end of the financial data. Corrigan Corporation's Balance Sheet data as of December 31 Assets Cash Accounts receivable Inventories Total current assets Land and building Machinery Other fixed assets Total assets Liabilities and equity Accounts payable Accrued liabilities Notes payable Total current liabilities Long-term debt Common stock Retained earnings Total liabilities and equity Sales Cost of goods sold Gross operating profit General admin. and selling expenses Depreciation EBIT Interest EBT Taxes (25%) Net income 2021 72,000 $ 439,000 894,000 $ 1,405,000 238,000 132,000 61,000 $ 1,836,000 Per-Share Data EPS Cash dividends Market price (average) P/E ratio Number of shares outstanding $ $ Corrigan Corporation's December 31 Income Statements $ $ $ $ $ $ $ 2020 65,000 328,000 813,000 1,206,000 271,000 133,000 57,000 S 1,667,000 80,000 $ 45,010 476,990 602,000 $ 399,688 575,000 259,312 1,836,000 $ $ 2021 4,240,000 $ 3,680,000 560,000 $ 303,320 159,000 2021 $1.00 $1.10 $12.34 12.33 23,000 97,680 $ 67,000 30,680 $ 7,670 23,010 $ 72,708 40,880 457,912 571,500 258,898 575,000 261,602 1,667,000 2020 3,635,000 2,980,000 655,000 297,550 154,500 202,950 43,000 159,950 39,988 119,963 2020 $5.22 $0.95 $23.57 4.52 23,000 Once we have this information set, we can calculate the necessary ratios for this analysis. Ratio Analysis Liquidity Current ratio a Asset Management Inventory turnoverb Days sales outstanding Fixed assets turnoverb Total assets turnover Profitability Return on assets Return on equity Return on invested capital Profit margin Debt Management d Debt-to-capital ratio Market Value P/E ratio M/B ratio EV/EBITDA ratio ? ? ? ? ? ? ? ? ? ? ? ? ? 2021 ? Industry average ratios have been constant for the past 4 years. b Based on year-end balance sheet figures. ? ? ? ? ? ? ? ? ? ? ? ? 2020 Industry Avg YOUR COMMENTS 2.7 7.0 32 13.0 2.6 11.4% 18.2% 14.5% 4.4% 50.0% 6.0 1.5 6.0 c Calculation is based on a 365-day year. Measured as (Short-term debt + Long-term debt)/(Short-term debt + Long-term debt + Common equity). ? ~~~ ? ? ? ? ? ? ? ? ? ? ? ?
Expert Answer:
Related Book For
Financial Theory and Corporate Policy
ISBN: 978-0321127211
4th edition
Authors: Thomas E. Copeland, J. Fred Weston, Kuldeep Shastri
Posted Date:
Students also viewed these finance questions
-
You are given the following data about Walt Disney and News Corporation, two of the major corporations in the media and entertainment industry. The data are for the end of the financial year 1999,...
-
You are given the following financial data about a new system to be implemented at a company: investment cost at n = 0: $10,000 investment cost at n = 1: $15,000 useful life: 10 years salvage value...
-
Management at Washington Hospital Center is thinking about two investments. One is an MRI machine, which can make $100,000 in good economic conditions or $60,000 in bad economic conditions. Another...
-
Draw a topology on paper that will show the connection between home network and College (LAN) using conventional symbols used in networking? (10) Home Network: 1 connecting device 1 Wireless devices...
-
Exceptional Electronics engaged in the following transactions. DATE TRANSACTIONS 2019 Sept. 1 Sold a high-definition television set on credit to Candy Cho; issued Sales Slip 101 for $2,400 plus sales...
-
Write statements to accomplish each of the following tasks: a) Declare variables c, thisIsAVariable, q76354 and number to be of type int and initialize each to 0. b) Prompt the user to enter an...
-
The Sargent Metal Fabricators has been manufacturing machine tools for a number of years and has an industrywide reputation for high-quality work. The company has been faced with irregularity of...
-
You are assessing internal control in the audit of the payroll and personnel cycle for Rogers Products Company, a manufacturing company specializing in assembling computer parts. Rogers employs...
-
Verify the identity. 1- sec 0 tan 0 tan 0 1- sec 0 = 2 cot 0 To verify the identity, start with the more complicated side and transform it to look like the other side. Choose the correct...
-
Corrie wants to earn a net operating income of $10,000 this month. She currently sells her product for $50 each, has $10 of variable expense per product, and incurs $5,000 of fixed expenses. How many...
-
Widmer Watercraft's predetermined overhead rate is 200% of direct labor. Information on the company's production activities during May follows. a. Purchased raw materials on credit, $240,000. b....
-
Nick and Nora are married and file jointly. In 2018. they have an adjusted gross income of $51,300. If they have itemized deductions of $20,000 and the standard deduction is $24,000, what is their...
-
The following information is available for Sunshine Company: Allowance for doubtful accounts at December 31, 2013 - $ 16,000 Credit sales during 2014 - 800,000 Accounts receivable deemed worthless...
-
If you added a cell-cycle inhibitor to block proliferation to the presomitic mesoderm of a developing chick, what would happen to somitogenesis?
-
what differentiates a glycerophospholipid from a triacylycerol?
-
How do contemporary theories of social stratification explain the persistence of class hierarchies, and what mechanisms contribute to social mobility or the lack thereof in modern societies ?
-
You have a liability (obligation) with a payment of $15,000 due in 12 years. Use the two bonds below to immunize the portfolio "locally", i.e. matching the duration (but do not match the con...
-
The Heese Restaurant Group manufactures the bags of frozen French fries used at its franchised restaurants. Last week, Heeses purchased and used 101,000 pounds of potatoes at a price of $ 0.70 per...
-
According to federal tax law, corporations need not pay taxes on 80% of dividends received from shares held in other corporations. In other words, only 20% of the dividends received by a corporate...
-
Consider firm B as an unlevered firm and firm C as a levered firm with target debt-to-equity ratio (B/S)* = 1. Both firms have exactly the same perpetual net operating income, NOI - 180, before...
-
Consider the Cox, Ingersoll, and Ross model where the current short-term rate is 2%, the long- run mean is 6%, the instantaneous standard deviation is 10%, and the rate of adjustment is 0.4. Derive...
-
Define: convertible bond, bond with equity warrants, preference share, investment certificate and bond redeemable in shares.
-
The bond market yield is 7%. A company issues a bond with equity warrants at a gross yield to maturity of 3% assuming the warrants are not exercised. What is the cost of this product? What is the...
-
Is a convertible bond more costly to the issuing company than a bond with equity warrants?
Study smarter with the SolutionInn App