Current Year = CY Last Year = LY Income Statement (in $ thousands) Year Ended Current Year Last Year Revenues (Sales) $ 3,000 $ 2,700 Cost of Goods Sold (1,800) $ (1,600) Gross Profit (Margin) 1,200 $ 1,100 Selling Expenses Advertising Expense Administrative Expenses (440) $ (400) (140) $ (120) (230) $ (220) Depreciation Expense Interest Expense Gain on Sale of PPE (50) $ (40) Operating Income (EBIT) 340 320 (30) $ (35) 5 Earnings Before Taxes 315 SS $ $ 285 Tax Expense Net Income (Profit) $ (66) $ (60) 249 $ 225 GO TO RATIO TAB (at bottom of EXCEL spreadsheet) TO DO HOMEWO Other Data: Number of Shares Outstanding (000's) 300 Share Price as of 12/31/Current Year $ 11.00 Share Price as of 12/31/Last Year 9.00 Tax Rate 21% Total Dividends Paid Current Year (000's) $ 60 Capital Expenditures Current Year (000's) $ 70 Sold old equipment for $20,000 with an original cost of $25,000 and A/D of $10,000 Current Year CY Last Year = LY Rush Creek Company Balance Sheet (in $ thousands) 12/31/CY 12/31/LY Assets Cash Accounts Receivable Inventories Current Assets SSSSA $ 142 $ $ 312 559 40 $ 275 $ 170 624 69 69 $ 145 460 Land $ Buildings $ Equipment SSS 75 $ 75 125 $ 125 $ 325 $ 280 Accumulated Depreciation Net PP&E $ Other L/T assets $ ASS (180) (140) 345 $ 340 25 $ 20 Total Assets 994 820 Liabilities and Shareholders' Equity Accounts Payable Accrued Liabilties Notes Payable Current Maturities on L/T Debt Current Liabilities SSSSS $ 30 $ 15 $ 20 30 ASSA $ $ $ $ 95 $ 15 Long Term Debt $ Capital Lease Obligations $ 559 340 - $ 5959 $ 370 Total Liabilities 69 435 SA 450 Common Stock (Par) $ Additional Paid-In Capital $ Retain Earnings SSS 50 $ 50 200 $ 200 $ 309 $ 120 Total Equity $ 559 $ 370 Total Liabilities and Equity 994 820 Current Year = CY Rush Creek Company Statement of Cash Flows (in $ thousands) Year Ended 12/31/CY Operating Activities: Net Income Depreciation Cash Effect of Changes in: Accounts Receivable Inventories Accounts Payable & Acc. Liab. ss 249 50 $ $ $ SSSSSS (37) $ (25) 10 (52) (5) 242 Net Change in Net Working Capital Other Cash From Operating Activities Investment Activities: Capital Expenditures Proceeds from Sale Gain on Sale Cash From Investing Activities Financing Activities: Dividends Paid Payment of L/T Debt Increase in S/T Borrowing Cash From Financing Activities Change In Cash SSSS (70) (5) (55) (60) (30) 5 (85) 102 Rush Creek Company Statement of Retained Earnings (in $ thousands) Beginning Retained Earnings $ Year Ended 12/31/CY 120 Add Net Income $ 249 Less Dividends Paid $ 60 Ending Retained Earnings 309 (000's) Rush Creek Monthly Results January - Current Year Favorable or (Unfavorable) Versus: Budget Last Year Actual % % Sales: United States $ 180 (15) -8% Europe $ 50 (7) -12% Canada $ 20 (3) -13% Total Sales $ 250 (25) -9% 2632 20 13% 14% 18% 29 13% COGS: Labor Raw Materials Production SSS $ 50 $ 20 $ 80 Total COGS $ 150 15 4295 7% (5) -11% 9% -11% 10% (10) -14% 9% (17) -16% Other Expenses: Selling $ Advertising $ Administrative $ Total Expenses $ 6222 36 12 24 72 3104 8% 8% 0% 5% INNO (4) -13% (2) -20% (2) -9% (8) -13% Operating Income $ 28 $ (6) -18% $ 4 17% Comments Current Year CY Last Year = LY Liquidity Ratios Rush Creek Company Ratio Analysis CY LY Calculations Current Ratio Quick Ratio Asset Management Ratios Inventory Turnover Days Sales Outstanding (DSO) Total Asset Turnover Debt Management Ratios Debt to Equity Ratio Debt Ratio Times Interest Earned A/P Days Profitability Ratios Profit Margin Return on Assets Return on Equity Return on Invested Capital Market / Valuation Ratios Earnings Per Share (EPS) Price/Earnings Ratio Market Capitalization CA/CL (CA - Inv.)/CL COGS/Inv. A/R / Avg. Daily Sales Sales / TA Debt/Equity Debt / Total Assets EBIT/Interst Exp. A/P / Avg. Daily COGS Net Income / Sales Net Income / TA Net Income / Equity EBIT (1-TR)/Invested Capital (use total liabs & equity for invested capital) Net Income / # Shares Share Price / EPS # Shares * Share Price Total Shareholder Return N/A (Dividends + SPA) / Original Investment (spa share price appreciation) 1) What two things should always be done in conjuction with any ratio analysis? 2) What are some limitations / issues with ratio analysis