Evaluate the financial statement for XYZ Inc and write a report of a maximum of 8 pages following the contents below.

1)Ratio Analysis

2)XYZ Financial Situation A Graphical Look

3)Industry Ratio Comparisons

4)Recommendations

XYZ Inc is a CRM software company. The recommendations section must cover the positive and the negative issues you discovered from reading the financial statements.

You will say what the company should do to change some of the problems or build up some of the strengths.

Balance sheet

Income statement

A F E 1 2 June 30/06 June 30/07 June 30/08 June 30/09 June 30/10 June 30/11 3 Current Assets 4 Cash 0.00 8,676.00 12,126.00 290,948.00 -314,603.00 550,270.00 5 Accounts receivable 0.00 52,002.00 104,295.00 143,883.00 320,282.00 123,805.00 6 Work in progress 0.00 11,791.00 15,654.00 -17,983.00 14,678.00 322.00 7 Prepaid Expenses 0.00 2,901.00 16,099.00 21,910.00 35,626.00 1,082.00 8 Total Current assets 0.00 75,370.00 148,174.00 438,758.00 55,983.00 427,869.00 9 10 Capital Assets (note 1) 11 Net capital assets 0.00 74,992.00 98,020.00 196,891.00 150,714.00 -43,371.00 12 13 Total Assets 0.00 150,362.00 246,194.00 635,649.00 206,697.00 384,498.00 14 15 16 Current Liabilities 17 Bank indebtedness 0.00 0.00 0.00 125,000.00 -125,000.00 18 Accounts payable 0.00 71,010.00 54.640.00 160,457.00 153,881.00 15,065.00 19 Unearned/ deferred revenue 0.00 13,609.00 30,492.00 74,616.00 87,037.00 48,967.00 20 Current portion long term debt 0.00 0.00 0.00 29,160.00 5,832.00 -1,428.00 21 Total Current Liabilities 0.00 84,619.00 85.132.00 264,233.00 371,750.00 -62,396.00 22 23 Long Term Debt (note 2) 0.00 0.00 0.00 115,840.00 -34,992.00 -1,949.00 24 25 Total Debt 0.00 84,619.00 85.132.00 380,073.00 336,758.00 -64,345.00 26 27 Shareholders Equity 28 Common Shares 0.00 0.00 0.00 0.00 0.00 0.00 29 Retained earnings 0.00 65,743.00 161.062.00 255,576.00 -130,061.00 448,844.00 30 Total Owners Equity 0.00 65,743.00 161,062.00 255,576.00 -130,061.00 448,844.00 31 32 Total Liabilities & 0.00 150,362.00 246,194.00 635,649.00 206,697.00 384,499.00 33 Shareholders Equity 34 E -N A B D 1 2 3 June 30/06 June 30/07 June 30/08 June 30/09 June 30/10 June 30/11 4 5 Revenues 6 Software Licensing & installation 0.00 742,914.00 699,557.00 1,251,291.00 970,111.00 664,617.00 7 Software Customization & Training 0.00 195,465.00 201,123.00 477,989.00 374,410.00 562,872.00 8 Total Revenues 0.00 938,379.00 900,680.00 1,729,280.00 1,344,521.00 1,227,489.00 9 Percentage growth compare to last Year 461.40% 175.18% 182.40% 135.12% 123.73% 10 11 Operating Expenses 12 Selling expenses 0.00 160,150.00 369,048.00 467,741.00 685,440.00 216,000.00 13 Customization, installation & Training 0.00 242,407.00 246,218.00 155,928.00 193,200.00 198,000.00 14 Customer Support 0.00 77,767.00 42,864.00 123,809.00 91,560.00 84,000.00 15 General & Administrative 0.00 53,626.00 59,270.00 181,104.00 246,000.00 0.00 16 Research & Development 0.00 154,853.00 26,519.00 490,548.00 342,240.00 -154,000.00 17 Equipment Lease 0.00 4,000.00 32,000.00 52,934.00 190,162.00 0.00 18 Rental 0.00 54,000.00 13,000.00 112,000.00 43,000.00 0.00 19 Bad Debt 0.00 86,500.00 -59,603.00 -24,503.00 10,853.00 36,753.00 20 Depreciation/Amortization 0.00 19,740.00 35,195.00 23,098.00 85,309.00 30,000.00 21 Interest 0.00 0.00 0.00 11,600.00 7,667.00 -10,270.00 22 Total operating expenses 0.00 853,043.00 764,511.00 1,594,259.00 1,895,431.00 400,483.00 23 Percentage growth compare to last Year 439.77% 169.24% 185.32% 154.74% 107.47% 24 25 Income before Taxes 0.00 85,336.00 136,169.00 135,021.00 -550,910.00 827,006.00 26 0.00 0.00 0.00 0.00 0.00 0.00 27 Provision for Taxes 0.00 25,601.00 40,850.00 40,507.00 -165,274.00 248,102.00 28 Net Income 0.00 59,735.00 95,319.00 94,514.00 -385,636.00 578,904.00 29 Percentage growth compare to last Year 1094.26% 244.99% 158.68% -172.70% 341.57% 30 31 Retained earning, Beginning of year 0.00 6,008.00 65,743.00 161,062.00 255,576.00 -130,060.00 32 Retained earning, End of Year 0.00 65,743.00 161,062.00 255,576.00 -130,060.00 448,844.00 33 300,000.00 250,000.00 200,000.00 150,000.00 100,000.00 50,000.00 A -Customization, installation & Training Customer Support General & Administrative 0.00 June June June June June June 30/06 30/07 30/08 30/09 30/10 30/11 A F E 1 2 June 30/06 June 30/07 June 30/08 June 30/09 June 30/10 June 30/11 3 Current Assets 4 Cash 0.00 8,676.00 12,126.00 290,948.00 -314,603.00 550,270.00 5 Accounts receivable 0.00 52,002.00 104,295.00 143,883.00 320,282.00 123,805.00 6 Work in progress 0.00 11,791.00 15,654.00 -17,983.00 14,678.00 322.00 7 Prepaid Expenses 0.00 2,901.00 16,099.00 21,910.00 35,626.00 1,082.00 8 Total Current assets 0.00 75,370.00 148,174.00 438,758.00 55,983.00 427,869.00 9 10 Capital Assets (note 1) 11 Net capital assets 0.00 74,992.00 98,020.00 196,891.00 150,714.00 -43,371.00 12 13 Total Assets 0.00 150,362.00 246,194.00 635,649.00 206,697.00 384,498.00 14 15 16 Current Liabilities 17 Bank indebtedness 0.00 0.00 0.00 125,000.00 -125,000.00 18 Accounts payable 0.00 71,010.00 54.640.00 160,457.00 153,881.00 15,065.00 19 Unearned/ deferred revenue 0.00 13,609.00 30,492.00 74,616.00 87,037.00 48,967.00 20 Current portion long term debt 0.00 0.00 0.00 29,160.00 5,832.00 -1,428.00 21 Total Current Liabilities 0.00 84,619.00 85.132.00 264,233.00 371,750.00 -62,396.00 22 23 Long Term Debt (note 2) 0.00 0.00 0.00 115,840.00 -34,992.00 -1,949.00 24 25 Total Debt 0.00 84,619.00 85.132.00 380,073.00 336,758.00 -64,345.00 26 27 Shareholders Equity 28 Common Shares 0.00 0.00 0.00 0.00 0.00 0.00 29 Retained earnings 0.00 65,743.00 161.062.00 255,576.00 -130,061.00 448,844.00 30 Total Owners Equity 0.00 65,743.00 161,062.00 255,576.00 -130,061.00 448,844.00 31 32 Total Liabilities & 0.00 150,362.00 246,194.00 635,649.00 206,697.00 384,499.00 33 Shareholders Equity 34 E -N A B D 1 2 3 June 30/06 June 30/07 June 30/08 June 30/09 June 30/10 June 30/11 4 5 Revenues 6 Software Licensing & installation 0.00 742,914.00 699,557.00 1,251,291.00 970,111.00 664,617.00 7 Software Customization & Training 0.00 195,465.00 201,123.00 477,989.00 374,410.00 562,872.00 8 Total Revenues 0.00 938,379.00 900,680.00 1,729,280.00 1,344,521.00 1,227,489.00 9 Percentage growth compare to last Year 461.40% 175.18% 182.40% 135.12% 123.73% 10 11 Operating Expenses 12 Selling expenses 0.00 160,150.00 369,048.00 467,741.00 685,440.00 216,000.00 13 Customization, installation & Training 0.00 242,407.00 246,218.00 155,928.00 193,200.00 198,000.00 14 Customer Support 0.00 77,767.00 42,864.00 123,809.00 91,560.00 84,000.00 15 General & Administrative 0.00 53,626.00 59,270.00 181,104.00 246,000.00 0.00 16 Research & Development 0.00 154,853.00 26,519.00 490,548.00 342,240.00 -154,000.00 17 Equipment Lease 0.00 4,000.00 32,000.00 52,934.00 190,162.00 0.00 18 Rental 0.00 54,000.00 13,000.00 112,000.00 43,000.00 0.00 19 Bad Debt 0.00 86,500.00 -59,603.00 -24,503.00 10,853.00 36,753.00 20 Depreciation/Amortization 0.00 19,740.00 35,195.00 23,098.00 85,309.00 30,000.00 21 Interest 0.00 0.00 0.00 11,600.00 7,667.00 -10,270.00 22 Total operating expenses 0.00 853,043.00 764,511.00 1,594,259.00 1,895,431.00 400,483.00 23 Percentage growth compare to last Year 439.77% 169.24% 185.32% 154.74% 107.47% 24 25 Income before Taxes 0.00 85,336.00 136,169.00 135,021.00 -550,910.00 827,006.00 26 0.00 0.00 0.00 0.00 0.00 0.00 27 Provision for Taxes 0.00 25,601.00 40,850.00 40,507.00 -165,274.00 248,102.00 28 Net Income 0.00 59,735.00 95,319.00 94,514.00 -385,636.00 578,904.00 29 Percentage growth compare to last Year 1094.26% 244.99% 158.68% -172.70% 341.57% 30 31 Retained earning, Beginning of year 0.00 6,008.00 65,743.00 161,062.00 255,576.00 -130,060.00 32 Retained earning, End of Year 0.00 65,743.00 161,062.00 255,576.00 -130,060.00 448,844.00 33 300,000.00 250,000.00 200,000.00 150,000.00 100,000.00 50,000.00 A -Customization, installation & Training Customer Support General & Administrative 0.00 June June June June June June 30/06 30/07 30/08 30/09 30/10 30/11