FIN 550 Group Case 2 1. CompU has been in business for 3 years now, and things are going well. The company has been able to expand its number of stores, and the company's sales and earnings have increased quickly. However, their CFO has decided that some additional analysis is required to determine the company's strengths and weaknesses. As a financial analyst with the company, the CFO has asked you to perform the following tasks: a) Using. Excel and the following income statement for 2022 and balance sheets for 2021 and 2022, prepare a statement of cash flows for 2022. b) Using the financial statements and industry average ratios below, develop a complete time series and cross-sectional analysis of CompU's financial condition for 2021 and 2022. Calculate all of the ratios in the list of industry average ratios. c) Prepare common size balance sheets and income statements for 2021 and 2022. d) Construct a DuPont analysis for both CompU and the industry for 2021 and 2022 . e) After analyzing the data, write a shor report (1 page) to the CFO with your conclusions regarding the company's strengths and weaknesses, its performance as compared to the industry, and your recommendations, Include a discussion of the changes in CompU's cash position during 2022. How has the company financed its growth? What areas of CompU/s operations are in greatest need of immediate attention? Are there any changes you would recommend making? Prepare a planned course of action for the solution of the firm's most pressing problems. Industry Average Ratios CompU, Inc. Balance Sheets December 31, 2021 December 31, 2022 Assets Cash Marketable Securities Accounts Receivable Inventory Prepaid Insurance Total Current Assets Fixed Assets Less: Accumulated Depreciation Total Fixed Assets Total Assets \begin{tabular}{r} $150,000 \\ 40,000 \\ 209,250 \\ 220,250 \\ 80,000 \\ \hline$699,500 \\ 1,162,500 \\ (392,500) \\ $770,000 \\ $1,469,500 \end{tabular} Liabilities and Stockholders' Equity Accounts Payable Accrued Wages Notes Rayable Total Current Liabilities Long-term debt Preferred Stock Common Stock Retained Earnings Total Labilities and Stockholders' Equity 5158.750 \begin{tabular}{c|c} 200,500 & 65,000 \\ 5424,250 & 187,500 \\ 125,000 \\ 100,000 & $2,000 \\ 700,000 & 300,000 \\ \hline 00,000 \\ 700,000 \end{tabular} $1,469,500120,250 \begin{tabular}{r} $180,000 \\ 95,000 \\ 215,000 \\ 206,250 \\ 80,000 \\ \hline$776,250 \\ 1,322,500 \\ (442,500) \\ $880,000 \\ $1,656,250 \end{tabular} 5168,750 $1,656,250135,000 CompU, Inc. Income Statements for the Year Ending December 31,2021 December 31, 2022 Preferred Stock Dividends Earnings Available to Common Stockholders 14,7505 21,0005 Total purchases $750,000 $900,000 FIN 550 Group Case 2 1. CompU has been in business for 3 years now, and things are going well. The company has been able to expand its number of stores, and the company's sales and earnings have increased quickly. However, their CFO has decided that some additional analysis is required to determine the company's strengths and weaknesses. As a financial analyst with the company, the CFO has asked you to perform the following tasks: a) Using. Excel and the following income statement for 2022 and balance sheets for 2021 and 2022, prepare a statement of cash flows for 2022. b) Using the financial statements and industry average ratios below, develop a complete time series and cross-sectional analysis of CompU's financial condition for 2021 and 2022. Calculate all of the ratios in the list of industry average ratios. c) Prepare common size balance sheets and income statements for 2021 and 2022. d) Construct a DuPont analysis for both CompU and the industry for 2021 and 2022 . e) After analyzing the data, write a shor report (1 page) to the CFO with your conclusions regarding the company's strengths and weaknesses, its performance as compared to the industry, and your recommendations, Include a discussion of the changes in CompU's cash position during 2022. How has the company financed its growth? What areas of CompU/s operations are in greatest need of immediate attention? Are there any changes you would recommend making? Prepare a planned course of action for the solution of the firm's most pressing problems. Industry Average Ratios CompU, Inc. Balance Sheets December 31, 2021 December 31, 2022 Assets Cash Marketable Securities Accounts Receivable Inventory Prepaid Insurance Total Current Assets Fixed Assets Less: Accumulated Depreciation Total Fixed Assets Total Assets \begin{tabular}{r} $150,000 \\ 40,000 \\ 209,250 \\ 220,250 \\ 80,000 \\ \hline$699,500 \\ 1,162,500 \\ (392,500) \\ $770,000 \\ $1,469,500 \end{tabular} Liabilities and Stockholders' Equity Accounts Payable Accrued Wages Notes Rayable Total Current Liabilities Long-term debt Preferred Stock Common Stock Retained Earnings Total Labilities and Stockholders' Equity 5158.750 \begin{tabular}{c|c} 200,500 & 65,000 \\ 5424,250 & 187,500 \\ 125,000 \\ 100,000 & $2,000 \\ 700,000 & 300,000 \\ \hline 00,000 \\ 700,000 \end{tabular} $1,469,500120,250 \begin{tabular}{r} $180,000 \\ 95,000 \\ 215,000 \\ 206,250 \\ 80,000 \\ \hline$776,250 \\ 1,322,500 \\ (442,500) \\ $880,000 \\ $1,656,250 \end{tabular} 5168,750 $1,656,250135,000 CompU, Inc. Income Statements for the Year Ending December 31,2021 December 31, 2022 Preferred Stock Dividends Earnings Available to Common Stockholders 14,7505 21,0005 Total purchases $750,000 $900,000