Dover Water Cooler Company is a medium sized company that manufactures drinking fountains and water coolers...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Dover Water Cooler Company is a medium sized company that manufactures drinking fountains and water coolers and markets their products nationally as well as overseas. The CEO of the company laid out some aggressive growth plans for 2019 and pushed his key executive staff to increase sales of its products by twenty percent. Sales management has been asked to aggressively pursue new customers, and expand sales with existing customers. The Credit manager has been asked to revisit their historically conservative credit policies to help achieve the aggressive growth plans. The Manufacturing manager has been asked to look at possible ways to reduce product cost without sacrificing overall product quality. Dover Water Cooler operates in a market where overall unit sales are relatively flat, so increasing sales means garnering a greater market share. In 2018 they sold 150,000 units and had a respectable twenty-five percent market share. The company has seen some signs of inflation in the price of manufacturing components (materials, labor, employee benefits), but its hope is that it can make up for the cost increases with a higher volume of sales. Dover Water Cooler Company is a closely held company and the capital structure consists of contributed capital, retained earnings and long term bank loans. It relies on its credit line of S10 million with First National Bank (Long-term debt) to finance its working capital requirements. Its standard credit terms are net 30 days. As 2019 came to a close, the CEO was somewhat satisfied with the growth in unit sales (from 150,000 to 180,000 units) the company had achieved, but was very disappointed in the overall financial performance of the company. The company's controller assembled the following financial information for 2019 and 2018 (figures in $000's): 2019 (000's) 2018 (000's) $ 39,000 25,300 $ 46,000 Sales Cost of goods sold Selling expense Administrative expense Depreciation Interest expense Income taxes (rounded) 32,200 6,000 4,800 2,000 4,000 4,000 1,700 500 300 700 100 Cash 200 500 Accounts receivable 6,000 5,000 22,000 3,500 Inventory Net fixed assets Accounts payable Notes payable (short term) Long-term debt 3,200 20,000 1,400 500 10,000 16,000 5,300 700 500 6,000 Common Stock & APIC 15,000 5,000 Retained Earnings Dover Water Cooler Company historically pays out 25 percent of net income as dividends to shareholders (assuming income vs. loss), and has a 20 percent tax rate. As a financial consultant, you have been asked to prepare the following financial reports and ratio analysis for Dover Water Cooler Company, and answer the questions noted below: Financial Statement & Ratio Analysis Requirements: 1. A comparative Balance Sheet for 2019 and 2018 incorporating a horizontal analysis (S change & % change). 2. A comparative Income Statement for 2019 and 2018 incorporating a vertical analysis (percentage of sales calculations). 3. A Sales and Cost of Sales Analysis for 2019 and 2018 (Calculate % of sales & S/Unit). Include comments on these figures in your narrative. 4. A ratio analysis for 2019 and 2018. Ratios computed should include current ratio, quick (acid-test) ratio, days' sales in inventory, inventory turnover, days' sales uncollected, accounts receivable turnover, total debt ratio, debt-equity ratio, times interest earned ratio, profit margin, ROA & ROE ratios (Excel template available). Where the ratio requires a two year average and the prior year is unavailable, use the current year amount only. K DOVER WATER COOLER COMPANY Sales & Cost of Sales Analysis with Market Analysis For the Years Ended December 31, 2019 & 2018 2019 2018 $ Change % Change Dollar Sales ($ 000's) Unit Sales Average Selling Price Cost of goods sold Average Cost per Unit Total Market (Units) Market Share (Pèrcentage) Remember, Sales are in 000's, units are not. DOVER WATER COOLER COMPANY CASE STUDY, S'20 Student Name: 0.00 2019 2018 Notes Short-term solvency ratios: Current ratio Acid-test (Quick) ratio Asset utilization ratios: Inventory turnover Days' Sales in inventory Receivables turnover Days' Sales uncollected Long-term solvency ratios: Total debt ratio Debt-equity ratio Times interest earned ratio Profitability ratios: Profit margin Return on assets Return on equity Dover Water Cooler Company is a medium sized company that manufactures drinking fountains and water coolers and markets their products nationally as well as overseas. The CEO of the company laid out some aggressive growth plans for 2019 and pushed his key executive staff to increase sales of its products by twenty percent. Sales management has been asked to aggressively pursue new customers, and expand sales with existing customers. The Credit manager has been asked to revisit their historically conservative credit policies to help achieve the aggressive growth plans. The Manufacturing manager has been asked to look at possible ways to reduce product cost without sacrificing overall product quality. Dover Water Cooler operates in a market where overall unit sales are relatively flat, so increasing sales means garnering a greater market share. In 2018 they sold 150,000 units and had a respectable twenty-five percent market share. The company has seen some signs of inflation in the price of manufacturing components (materials, labor, employee benefits), but its hope is that it can make up for the cost increases with a higher volume of sales. Dover Water Cooler Company is a closely held company and the capital structure consists of contributed capital, retained earnings and long term bank loans. It relies on its credit line of S10 million with First National Bank (Long-term debt) to finance its working capital requirements. Its standard credit terms are net 30 days. As 2019 came to a close, the CEO was somewhat satisfied with the growth in unit sales (from 150,000 to 180,000 units) the company had achieved, but was very disappointed in the overall financial performance of the company. The company's controller assembled the following financial information for 2019 and 2018 (figures in $000's): 2019 (000's) 2018 (000's) $ 39,000 25,300 $ 46,000 Sales Cost of goods sold Selling expense Administrative expense Depreciation Interest expense Income taxes (rounded) 32,200 6,000 4,800 2,000 4,000 4,000 1,700 500 300 700 100 Cash 200 500 Accounts receivable 6,000 5,000 22,000 3,500 Inventory Net fixed assets Accounts payable Notes payable (short term) Long-term debt 3,200 20,000 1,400 500 10,000 16,000 5,300 700 500 6,000 Common Stock & APIC 15,000 5,000 Retained Earnings Dover Water Cooler Company historically pays out 25 percent of net income as dividends to shareholders (assuming income vs. loss), and has a 20 percent tax rate. As a financial consultant, you have been asked to prepare the following financial reports and ratio analysis for Dover Water Cooler Company, and answer the questions noted below: Financial Statement & Ratio Analysis Requirements: 1. A comparative Balance Sheet for 2019 and 2018 incorporating a horizontal analysis (S change & % change). 2. A comparative Income Statement for 2019 and 2018 incorporating a vertical analysis (percentage of sales calculations). 3. A Sales and Cost of Sales Analysis for 2019 and 2018 (Calculate % of sales & S/Unit). Include comments on these figures in your narrative. 4. A ratio analysis for 2019 and 2018. Ratios computed should include current ratio, quick (acid-test) ratio, days' sales in inventory, inventory turnover, days' sales uncollected, accounts receivable turnover, total debt ratio, debt-equity ratio, times interest earned ratio, profit margin, ROA & ROE ratios (Excel template available). Where the ratio requires a two year average and the prior year is unavailable, use the current year amount only. K DOVER WATER COOLER COMPANY Sales & Cost of Sales Analysis with Market Analysis For the Years Ended December 31, 2019 & 2018 2019 2018 $ Change % Change Dollar Sales ($ 000's) Unit Sales Average Selling Price Cost of goods sold Average Cost per Unit Total Market (Units) Market Share (Pèrcentage) Remember, Sales are in 000's, units are not. DOVER WATER COOLER COMPANY CASE STUDY, S'20 Student Name: 0.00 2019 2018 Notes Short-term solvency ratios: Current ratio Acid-test (Quick) ratio Asset utilization ratios: Inventory turnover Days' Sales in inventory Receivables turnover Days' Sales uncollected Long-term solvency ratios: Total debt ratio Debt-equity ratio Times interest earned ratio Profitability ratios: Profit margin Return on assets Return on equity Dover Water Cooler Company is a medium sized company that manufactures drinking fountains and water coolers and markets their products nationally as well as overseas. The CEO of the company laid out some aggressive growth plans for 2019 and pushed his key executive staff to increase sales of its products by twenty percent. Sales management has been asked to aggressively pursue new customers, and expand sales with existing customers. The Credit manager has been asked to revisit their historically conservative credit policies to help achieve the aggressive growth plans. The Manufacturing manager has been asked to look at possible ways to reduce product cost without sacrificing overall product quality. Dover Water Cooler operates in a market where overall unit sales are relatively flat, so increasing sales means garnering a greater market share. In 2018 they sold 150,000 units and had a respectable twenty-five percent market share. The company has seen some signs of inflation in the price of manufacturing components (materials, labor, employee benefits), but its hope is that it can make up for the cost increases with a higher volume of sales. Dover Water Cooler Company is a closely held company and the capital structure consists of contributed capital, retained earnings and long term bank loans. It relies on its credit line of S10 million with First National Bank (Long-term debt) to finance its working capital requirements. Its standard credit terms are net 30 days. As 2019 came to a close, the CEO was somewhat satisfied with the growth in unit sales (from 150,000 to 180,000 units) the company had achieved, but was very disappointed in the overall financial performance of the company. The company's controller assembled the following financial information for 2019 and 2018 (figures in $000's): 2019 (000's) 2018 (000's) $ 39,000 25,300 $ 46,000 Sales Cost of goods sold Selling expense Administrative expense Depreciation Interest expense Income taxes (rounded) 32,200 6,000 4,800 2,000 4,000 4,000 1,700 500 300 700 100 Cash 200 500 Accounts receivable 6,000 5,000 22,000 3,500 Inventory Net fixed assets Accounts payable Notes payable (short term) Long-term debt 3,200 20,000 1,400 500 10,000 16,000 5,300 700 500 6,000 Common Stock & APIC 15,000 5,000 Retained Earnings Dover Water Cooler Company historically pays out 25 percent of net income as dividends to shareholders (assuming income vs. loss), and has a 20 percent tax rate. As a financial consultant, you have been asked to prepare the following financial reports and ratio analysis for Dover Water Cooler Company, and answer the questions noted below: Financial Statement & Ratio Analysis Requirements: 1. A comparative Balance Sheet for 2019 and 2018 incorporating a horizontal analysis (S change & % change). 2. A comparative Income Statement for 2019 and 2018 incorporating a vertical analysis (percentage of sales calculations). 3. A Sales and Cost of Sales Analysis for 2019 and 2018 (Calculate % of sales & S/Unit). Include comments on these figures in your narrative. 4. A ratio analysis for 2019 and 2018. Ratios computed should include current ratio, quick (acid-test) ratio, days' sales in inventory, inventory turnover, days' sales uncollected, accounts receivable turnover, total debt ratio, debt-equity ratio, times interest earned ratio, profit margin, ROA & ROE ratios (Excel template available). Where the ratio requires a two year average and the prior year is unavailable, use the current year amount only. K DOVER WATER COOLER COMPANY Sales & Cost of Sales Analysis with Market Analysis For the Years Ended December 31, 2019 & 2018 2019 2018 $ Change % Change Dollar Sales ($ 000's) Unit Sales Average Selling Price Cost of goods sold Average Cost per Unit Total Market (Units) Market Share (Pèrcentage) Remember, Sales are in 000's, units are not. DOVER WATER COOLER COMPANY CASE STUDY, S'20 Student Name: 0.00 2019 2018 Notes Short-term solvency ratios: Current ratio Acid-test (Quick) ratio Asset utilization ratios: Inventory turnover Days' Sales in inventory Receivables turnover Days' Sales uncollected Long-term solvency ratios: Total debt ratio Debt-equity ratio Times interest earned ratio Profitability ratios: Profit margin Return on assets Return on equity Dover Water Cooler Company is a medium sized company that manufactures drinking fountains and water coolers and markets their products nationally as well as overseas. The CEO of the company laid out some aggressive growth plans for 2019 and pushed his key executive staff to increase sales of its products by twenty percent. Sales management has been asked to aggressively pursue new customers, and expand sales with existing customers. The Credit manager has been asked to revisit their historically conservative credit policies to help achieve the aggressive growth plans. The Manufacturing manager has been asked to look at possible ways to reduce product cost without sacrificing overall product quality. Dover Water Cooler operates in a market where overall unit sales are relatively flat, so increasing sales means garnering a greater market share. In 2018 they sold 150,000 units and had a respectable twenty-five percent market share. The company has seen some signs of inflation in the price of manufacturing components (materials, labor, employee benefits), but its hope is that it can make up for the cost increases with a higher volume of sales. Dover Water Cooler Company is a closely held company and the capital structure consists of contributed capital, retained earnings and long term bank loans. It relies on its credit line of S10 million with First National Bank (Long-term debt) to finance its working capital requirements. Its standard credit terms are net 30 days. As 2019 came to a close, the CEO was somewhat satisfied with the growth in unit sales (from 150,000 to 180,000 units) the company had achieved, but was very disappointed in the overall financial performance of the company. The company's controller assembled the following financial information for 2019 and 2018 (figures in $000's): 2019 (000's) 2018 (000's) $ 39,000 25,300 $ 46,000 Sales Cost of goods sold Selling expense Administrative expense Depreciation Interest expense Income taxes (rounded) 32,200 6,000 4,800 2,000 4,000 4,000 1,700 500 300 700 100 Cash 200 500 Accounts receivable 6,000 5,000 22,000 3,500 Inventory Net fixed assets Accounts payable Notes payable (short term) Long-term debt 3,200 20,000 1,400 500 10,000 16,000 5,300 700 500 6,000 Common Stock & APIC 15,000 5,000 Retained Earnings Dover Water Cooler Company historically pays out 25 percent of net income as dividends to shareholders (assuming income vs. loss), and has a 20 percent tax rate. As a financial consultant, you have been asked to prepare the following financial reports and ratio analysis for Dover Water Cooler Company, and answer the questions noted below: Financial Statement & Ratio Analysis Requirements: 1. A comparative Balance Sheet for 2019 and 2018 incorporating a horizontal analysis (S change & % change). 2. A comparative Income Statement for 2019 and 2018 incorporating a vertical analysis (percentage of sales calculations). 3. A Sales and Cost of Sales Analysis for 2019 and 2018 (Calculate % of sales & S/Unit). Include comments on these figures in your narrative. 4. A ratio analysis for 2019 and 2018. Ratios computed should include current ratio, quick (acid-test) ratio, days' sales in inventory, inventory turnover, days' sales uncollected, accounts receivable turnover, total debt ratio, debt-equity ratio, times interest earned ratio, profit margin, ROA & ROE ratios (Excel template available). Where the ratio requires a two year average and the prior year is unavailable, use the current year amount only. K DOVER WATER COOLER COMPANY Sales & Cost of Sales Analysis with Market Analysis For the Years Ended December 31, 2019 & 2018 2019 2018 $ Change % Change Dollar Sales ($ 000's) Unit Sales Average Selling Price Cost of goods sold Average Cost per Unit Total Market (Units) Market Share (Pèrcentage) Remember, Sales are in 000's, units are not. DOVER WATER COOLER COMPANY CASE STUDY, S'20 Student Name: 0.00 2019 2018 Notes Short-term solvency ratios: Current ratio Acid-test (Quick) ratio Asset utilization ratios: Inventory turnover Days' Sales in inventory Receivables turnover Days' Sales uncollected Long-term solvency ratios: Total debt ratio Debt-equity ratio Times interest earned ratio Profitability ratios: Profit margin Return on assets Return on equity Dover Water Cooler Company is a medium sized company that manufactures drinking fountains and water coolers and markets their products nationally as well as overseas. The CEO of the company laid out some aggressive growth plans for 2019 and pushed his key executive staff to increase sales of its products by twenty percent. Sales management has been asked to aggressively pursue new customers, and expand sales with existing customers. The Credit manager has been asked to revisit their historically conservative credit policies to help achieve the aggressive growth plans. The Manufacturing manager has been asked to look at possible ways to reduce product cost without sacrificing overall product quality. Dover Water Cooler operates in a market where overall unit sales are relatively flat, so increasing sales means garnering a greater market share. In 2018 they sold 150,000 units and had a respectable twenty-five percent market share. The company has seen some signs of inflation in the price of manufacturing components (materials, labor, employee benefits), but its hope is that it can make up for the cost increases with a higher volume of sales. Dover Water Cooler Company is a closely held company and the capital structure consists of contributed capital, retained earnings and long term bank loans. It relies on its credit line of S10 million with First National Bank (Long-term debt) to finance its working capital requirements. Its standard credit terms are net 30 days. As 2019 came to a close, the CEO was somewhat satisfied with the growth in unit sales (from 150,000 to 180,000 units) the company had achieved, but was very disappointed in the overall financial performance of the company. The company's controller assembled the following financial information for 2019 and 2018 (figures in $000's): 2019 (000's) 2018 (000's) $ 39,000 25,300 $ 46,000 Sales Cost of goods sold Selling expense Administrative expense Depreciation Interest expense Income taxes (rounded) 32,200 6,000 4,800 2,000 4,000 4,000 1,700 500 300 700 100 Cash 200 500 Accounts receivable 6,000 5,000 22,000 3,500 Inventory Net fixed assets Accounts payable Notes payable (short term) Long-term debt 3,200 20,000 1,400 500 10,000 16,000 5,300 700 500 6,000 Common Stock & APIC 15,000 5,000 Retained Earnings Dover Water Cooler Company historically pays out 25 percent of net income as dividends to shareholders (assuming income vs. loss), and has a 20 percent tax rate. As a financial consultant, you have been asked to prepare the following financial reports and ratio analysis for Dover Water Cooler Company, and answer the questions noted below: Financial Statement & Ratio Analysis Requirements: 1. A comparative Balance Sheet for 2019 and 2018 incorporating a horizontal analysis (S change & % change). 2. A comparative Income Statement for 2019 and 2018 incorporating a vertical analysis (percentage of sales calculations). 3. A Sales and Cost of Sales Analysis for 2019 and 2018 (Calculate % of sales & S/Unit). Include comments on these figures in your narrative. 4. A ratio analysis for 2019 and 2018. Ratios computed should include current ratio, quick (acid-test) ratio, days' sales in inventory, inventory turnover, days' sales uncollected, accounts receivable turnover, total debt ratio, debt-equity ratio, times interest earned ratio, profit margin, ROA & ROE ratios (Excel template available). Where the ratio requires a two year average and the prior year is unavailable, use the current year amount only. K DOVER WATER COOLER COMPANY Sales & Cost of Sales Analysis with Market Analysis For the Years Ended December 31, 2019 & 2018 2019 2018 $ Change % Change Dollar Sales ($ 000's) Unit Sales Average Selling Price Cost of goods sold Average Cost per Unit Total Market (Units) Market Share (Pèrcentage) Remember, Sales are in 000's, units are not. DOVER WATER COOLER COMPANY CASE STUDY, S'20 Student Name: 0.00 2019 2018 Notes Short-term solvency ratios: Current ratio Acid-test (Quick) ratio Asset utilization ratios: Inventory turnover Days' Sales in inventory Receivables turnover Days' Sales uncollected Long-term solvency ratios: Total debt ratio Debt-equity ratio Times interest earned ratio Profitability ratios: Profit margin Return on assets Return on equity Dover Water Cooler Company is a medium sized company that manufactures drinking fountains and water coolers and markets their products nationally as well as overseas. The CEO of the company laid out some aggressive growth plans for 2019 and pushed his key executive staff to increase sales of its products by twenty percent. Sales management has been asked to aggressively pursue new customers, and expand sales with existing customers. The Credit manager has been asked to revisit their historically conservative credit policies to help achieve the aggressive growth plans. The Manufacturing manager has been asked to look at possible ways to reduce product cost without sacrificing overall product quality. Dover Water Cooler operates in a market where overall unit sales are relatively flat, so increasing sales means garnering a greater market share. In 2018 they sold 150,000 units and had a respectable twenty-five percent market share. The company has seen some signs of inflation in the price of manufacturing components (materials, labor, employee benefits), but its hope is that it can make up for the cost increases with a higher volume of sales. Dover Water Cooler Company is a closely held company and the capital structure consists of contributed capital, retained earnings and long term bank loans. It relies on its credit line of S10 million with First National Bank (Long-term debt) to finance its working capital requirements. Its standard credit terms are net 30 days. As 2019 came to a close, the CEO was somewhat satisfied with the growth in unit sales (from 150,000 to 180,000 units) the company had achieved, but was very disappointed in the overall financial performance of the company. The company's controller assembled the following financial information for 2019 and 2018 (figures in $000's): 2019 (000's) 2018 (000's) $ 39,000 25,300 $ 46,000 Sales Cost of goods sold Selling expense Administrative expense Depreciation Interest expense Income taxes (rounded) 32,200 6,000 4,800 2,000 4,000 4,000 1,700 500 300 700 100 Cash 200 500 Accounts receivable 6,000 5,000 22,000 3,500 Inventory Net fixed assets Accounts payable Notes payable (short term) Long-term debt 3,200 20,000 1,400 500 10,000 16,000 5,300 700 500 6,000 Common Stock & APIC 15,000 5,000 Retained Earnings Dover Water Cooler Company historically pays out 25 percent of net income as dividends to shareholders (assuming income vs. loss), and has a 20 percent tax rate. As a financial consultant, you have been asked to prepare the following financial reports and ratio analysis for Dover Water Cooler Company, and answer the questions noted below: Financial Statement & Ratio Analysis Requirements: 1. A comparative Balance Sheet for 2019 and 2018 incorporating a horizontal analysis (S change & % change). 2. A comparative Income Statement for 2019 and 2018 incorporating a vertical analysis (percentage of sales calculations). 3. A Sales and Cost of Sales Analysis for 2019 and 2018 (Calculate % of sales & S/Unit). Include comments on these figures in your narrative. 4. A ratio analysis for 2019 and 2018. Ratios computed should include current ratio, quick (acid-test) ratio, days' sales in inventory, inventory turnover, days' sales uncollected, accounts receivable turnover, total debt ratio, debt-equity ratio, times interest earned ratio, profit margin, ROA & ROE ratios (Excel template available). Where the ratio requires a two year average and the prior year is unavailable, use the current year amount only. K DOVER WATER COOLER COMPANY Sales & Cost of Sales Analysis with Market Analysis For the Years Ended December 31, 2019 & 2018 2019 2018 $ Change % Change Dollar Sales ($ 000's) Unit Sales Average Selling Price Cost of goods sold Average Cost per Unit Total Market (Units) Market Share (Pèrcentage) Remember, Sales are in 000's, units are not. DOVER WATER COOLER COMPANY CASE STUDY, S'20 Student Name: 0.00 2019 2018 Notes Short-term solvency ratios: Current ratio Acid-test (Quick) ratio Asset utilization ratios: Inventory turnover Days' Sales in inventory Receivables turnover Days' Sales uncollected Long-term solvency ratios: Total debt ratio Debt-equity ratio Times interest earned ratio Profitability ratios: Profit margin Return on assets Return on equity Dover Water Cooler Company is a medium sized company that manufactures drinking fountains and water coolers and markets their products nationally as well as overseas. The CEO of the company laid out some aggressive growth plans for 2019 and pushed his key executive staff to increase sales of its products by twenty percent. Sales management has been asked to aggressively pursue new customers, and expand sales with existing customers. The Credit manager has been asked to revisit their historically conservative credit policies to help achieve the aggressive growth plans. The Manufacturing manager has been asked to look at possible ways to reduce product cost without sacrificing overall product quality. Dover Water Cooler operates in a market where overall unit sales are relatively flat, so increasing sales means garnering a greater market share. In 2018 they sold 150,000 units and had a respectable twenty-five percent market share. The company has seen some signs of inflation in the price of manufacturing components (materials, labor, employee benefits), but its hope is that it can make up for the cost increases with a higher volume of sales. Dover Water Cooler Company is a closely held company and the capital structure consists of contributed capital, retained earnings and long term bank loans. It relies on its credit line of S10 million with First National Bank (Long-term debt) to finance its working capital requirements. Its standard credit terms are net 30 days. As 2019 came to a close, the CEO was somewhat satisfied with the growth in unit sales (from 150,000 to 180,000 units) the company had achieved, but was very disappointed in the overall financial performance of the company. The company's controller assembled the following financial information for 2019 and 2018 (figures in $000's): 2019 (000's) 2018 (000's) $ 39,000 25,300 $ 46,000 Sales Cost of goods sold Selling expense Administrative expense Depreciation Interest expense Income taxes (rounded) 32,200 6,000 4,800 2,000 4,000 4,000 1,700 500 300 700 100 Cash 200 500 Accounts receivable 6,000 5,000 22,000 3,500 Inventory Net fixed assets Accounts payable Notes payable (short term) Long-term debt 3,200 20,000 1,400 500 10,000 16,000 5,300 700 500 6,000 Common Stock & APIC 15,000 5,000 Retained Earnings Dover Water Cooler Company historically pays out 25 percent of net income as dividends to shareholders (assuming income vs. loss), and has a 20 percent tax rate. As a financial consultant, you have been asked to prepare the following financial reports and ratio analysis for Dover Water Cooler Company, and answer the questions noted below: Financial Statement & Ratio Analysis Requirements: 1. A comparative Balance Sheet for 2019 and 2018 incorporating a horizontal analysis (S change & % change). 2. A comparative Income Statement for 2019 and 2018 incorporating a vertical analysis (percentage of sales calculations). 3. A Sales and Cost of Sales Analysis for 2019 and 2018 (Calculate % of sales & S/Unit). Include comments on these figures in your narrative. 4. A ratio analysis for 2019 and 2018. Ratios computed should include current ratio, quick (acid-test) ratio, days' sales in inventory, inventory turnover, days' sales uncollected, accounts receivable turnover, total debt ratio, debt-equity ratio, times interest earned ratio, profit margin, ROA & ROE ratios (Excel template available). Where the ratio requires a two year average and the prior year is unavailable, use the current year amount only. K DOVER WATER COOLER COMPANY Sales & Cost of Sales Analysis with Market Analysis For the Years Ended December 31, 2019 & 2018 2019 2018 $ Change % Change Dollar Sales ($ 000's) Unit Sales Average Selling Price Cost of goods sold Average Cost per Unit Total Market (Units) Market Share (Pèrcentage) Remember, Sales are in 000's, units are not. DOVER WATER COOLER COMPANY CASE STUDY, S'20 Student Name: 0.00 2019 2018 Notes Short-term solvency ratios: Current ratio Acid-test (Quick) ratio Asset utilization ratios: Inventory turnover Days' Sales in inventory Receivables turnover Days' Sales uncollected Long-term solvency ratios: Total debt ratio Debt-equity ratio Times interest earned ratio Profitability ratios: Profit margin Return on assets Return on equity Dover Water Cooler Company is a medium sized company that manufactures drinking fountains and water coolers and markets their products nationally as well as overseas. The CEO of the company laid out some aggressive growth plans for 2019 and pushed his key executive staff to increase sales of its products by twenty percent. Sales management has been asked to aggressively pursue new customers, and expand sales with existing customers. The Credit manager has been asked to revisit their historically conservative credit policies to help achieve the aggressive growth plans. The Manufacturing manager has been asked to look at possible ways to reduce product cost without sacrificing overall product quality. Dover Water Cooler operates in a market where overall unit sales are relatively flat, so increasing sales means garnering a greater market share. In 2018 they sold 150,000 units and had a respectable twenty-five percent market share. The company has seen some signs of inflation in the price of manufacturing components (materials, labor, employee benefits), but its hope is that it can make up for the cost increases with a higher volume of sales. Dover Water Cooler Company is a closely held company and the capital structure consists of contributed capital, retained earnings and long term bank loans. It relies on its credit line of S10 million with First National Bank (Long-term debt) to finance its working capital requirements. Its standard credit terms are net 30 days. As 2019 came to a close, the CEO was somewhat satisfied with the growth in unit sales (from 150,000 to 180,000 units) the company had achieved, but was very disappointed in the overall financial performance of the company. The company's controller assembled the following financial information for 2019 and 2018 (figures in $000's): 2019 (000's) 2018 (000's) $ 39,000 25,300 $ 46,000 Sales Cost of goods sold Selling expense Administrative expense Depreciation Interest expense Income taxes (rounded) 32,200 6,000 4,800 2,000 4,000 4,000 1,700 500 300 700 100 Cash 200 500 Accounts receivable 6,000 5,000 22,000 3,500 Inventory Net fixed assets Accounts payable Notes payable (short term) Long-term debt 3,200 20,000 1,400 500 10,000 16,000 5,300 700 500 6,000 Common Stock & APIC 15,000 5,000 Retained Earnings Dover Water Cooler Company historically pays out 25 percent of net income as dividends to shareholders (assuming income vs. loss), and has a 20 percent tax rate. As a financial consultant, you have been asked to prepare the following financial reports and ratio analysis for Dover Water Cooler Company, and answer the questions noted below: Financial Statement & Ratio Analysis Requirements: 1. A comparative Balance Sheet for 2019 and 2018 incorporating a horizontal analysis (S change & % change). 2. A comparative Income Statement for 2019 and 2018 incorporating a vertical analysis (percentage of sales calculations). 3. A Sales and Cost of Sales Analysis for 2019 and 2018 (Calculate % of sales & S/Unit). Include comments on these figures in your narrative. 4. A ratio analysis for 2019 and 2018. Ratios computed should include current ratio, quick (acid-test) ratio, days' sales in inventory, inventory turnover, days' sales uncollected, accounts receivable turnover, total debt ratio, debt-equity ratio, times interest earned ratio, profit margin, ROA & ROE ratios (Excel template available). Where the ratio requires a two year average and the prior year is unavailable, use the current year amount only. K DOVER WATER COOLER COMPANY Sales & Cost of Sales Analysis with Market Analysis For the Years Ended December 31, 2019 & 2018 2019 2018 $ Change % Change Dollar Sales ($ 000's) Unit Sales Average Selling Price Cost of goods sold Average Cost per Unit Total Market (Units) Market Share (Pèrcentage) Remember, Sales are in 000's, units are not. DOVER WATER COOLER COMPANY CASE STUDY, S'20 Student Name: 0.00 2019 2018 Notes Short-term solvency ratios: Current ratio Acid-test (Quick) ratio Asset utilization ratios: Inventory turnover Days' Sales in inventory Receivables turnover Days' Sales uncollected Long-term solvency ratios: Total debt ratio Debt-equity ratio Times interest earned ratio Profitability ratios: Profit margin Return on assets Return on equity
Expert Answer:
Answer rating: 100% (QA)
Balance Sheet Horizontal analysis Amt 000 Assets 2019 2018 Change age change Cash 200 500 300 6000 Accounts receivable 6000 3500 2500 7143 Inventory 5... View the full answer
Related Book For
Accounting
ISBN: 978-0324662962
23rd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
Posted Date:
Students also viewed these accounting questions
-
Magna Jets is a medium sized company that manufactures luxury goods for several well-known chain stores. In real terms, the company has experienced only a small growth in turnover in recent years,...
-
a) Zora Bank Ltd is a medium sized bank that was recently purchased and the new owners now find that there are a number of delinquent loans, They have hired you as a consultant to make...
-
A monopolist operates in a market where the inverse demand function is given by P=300-10Q, and it has a total cost function C(Q)=100Q+900.Derive the monopolists average cost function and marginal...
-
14. The molecule that has formula C,H, with 2 sp C's, 2 sp C's, and 1 sp C and chiral isomer is H CH3 CH3 (a) (c) H H HC H C=C=C CH 3 C=C=C H CH3 (b) (d) HC=C H HCCC=C CH3 H CHCH3
-
How might an airline such as Delta use the concepts of supply-chain management in negotiations with airplane manufacturers like Boeing and Airbus? How might they use the concepts of customer...
-
Pop Corporation has owned a 30 percent interest in Son Corporation for ten years, and has properly recorded this investment using the equity method of accounting. On July 1 of the current year Pop...
-
A flat block is pulled along a horizontal flat surface by a horizontal rope perpendicular to one of the sides. The block measures \(1.0 \mathrm{~m} \times 1.0 \mathrm{~m}\), has a mass of \(100...
-
The Mona chino Manufacturing Company has the following budgeted overhead cost and other data for its machining department for the month of December: Budgeted Data: Indirect labor and supplies .....
-
What is the function of the Occupational Safety and Health Review Commission? 2. How was the OSHRC created? 3 .What is an OSHA violation ? 4 What is an OSHA citation ? 5.What is meant by " penalties...
-
Complete Form SS-4 for TCLH Industries. The company was formed on December 1, 2019, as a corporation (which files Form 1120S and was incorporated in North Carolina) by Michael Sierra (CEO; SSN 232-...
-
from " digital design with an introduction to the Verilog HDL 4th edition " Answer the following question using clear methods. A D B C D 9. Find the critical path in Fig 1. Figure 1 F G
-
Assume that you work for a company that designs and manufactures uniforms and protective equipment. Your company would like to expand its offerings and is considering manufacturing firefighter...
-
Explain the three criteria for evaluating whether a source is credible.
-
Some students who want to train with an accountancy practice tend to focus exclusively on trying to get a job with one of the Big Four (PwC, Deloitte, EY and KPMG) and ignore smaller accounting firms...
-
You may have no plans to become an accountant in the future. Why is it still important for you to study the basics of accounting, such as those covered in this book?
-
Range, mean, median, and mode are four ways of reporting the quantitative data from a survey. Explain how they differ.
-
A lessee records a ?nance lease as an asset and an obligation(assuming there are no prepaid lease payments, lessor incentive orinitial direct costs incurred) at the commencement of the lease atwh 2...
-
How has the globalization of firms affected the diversity of their employees? Why has increased diversity put an additional burden on accounting systems?
-
The following data are accumulated by Reynolds Company in evaluating the purchase of $104,000 of equipment, having a four-year useful life: a. Assuming that the desired rate of return is 15%,...
-
The credit period during which the buyer of merchandise is allowed to pay usually begins with what date?
-
Robo-Tech Inc. manufactures components for computer games within a relevant range of 200,000 to 320,000 disks per year. Within this range, the following partially completed manufacturing cost...
-
At 30 June 2024, the accountant for Woodbine Construction, Mary Ellam, is preparing the financial statements for the year ended on that date. To calculate the annual leave payable, the accountant had...
-
How would each of the following liabilities be classified (current, non-current, or both) at the end of the financial year? Unearned revenue Accrued expenses Provision for warranty repair costs...
-
The following were among transactions of Everluck Enterprises Ltd during the financial years ending 30 June 2023 and 30 June 2024. Required Record in general journal form all the above transactions,...
How To Treat Fibromyalgia Fibromyalgia Treatment And Care 1st Edition - ISBN: B09PP2G5XY - Free Book
Study smarter with the SolutionInn App