Koala Fun Case Study is attached. Please help answer questions

1. Using the data in exhibits C2.1 and C3.3, calculate and analyze the firms 2012 and 2013 ratios. Enter the ratios in the table below in the 2012 and 2013 columns, respectively:

Ratio Type

2012

2013

Current (times)

Quick (times)

Debt (%)

Times interest earned (times)

Inventory turnover (times)

Total asset turnover (times)

Average collections period (days)

Return on equity (%)

2. Part of Owens evaluation will consist of comparing the firms ratios to the industry as shown in Exhibit C3.3 of the text. Discuss the limitations of such a comparative financial analysis. In view of these limitations, why are such industry comparisons so frequently made? (Note: Sales are forecast to be $8.25 million in 2014). Type a three- to four-sentence response below.

3. Owen thinks that the profitability of the firm has been hurt by Tessas reluctance to use much interest-bearing debt. Is this a reasonable position? Explain. Type a three- to four-sentence response below.

4. The case mentions that Tessa rarely takes trade discounts, which are typically 1/10, net 30. Does this seem like a wise financial move? Explain. Type a three- to four-sentence response below.

5. Is the estimate of $35 to $40 for Owens shares a fair evaluation? Explain. Type a three- to four-sentence response below.

CASE TWo Koala Fun LLION-DOLLAR COMPUTERGAME companies such as Activision Blizzard, and Zynga are unusual in the electronic arts industry, which consists primarily of small developers One such firm is Koala Fun (KF) located in Baltimore. MD. KF was started seven years ago by Owen Charles and Tessa Benjamin, who between them had over 15 years of experience with various computer systems design companies The partnership initially blended wery well Owen, reserved and introspec- tive. is creative with a air for designing games and spotting trends. Mainly as a result of his genius, the KF brand is synonymous with intriguing electronics with high graphic appeal. Tessa, more outpoing with a strong marketing focus has assumed the role of the firms chief operating officer THE PARTNERS' FIRST SUCCESS The first successful product the two partners developed was a game called Koala Fun. which they used as the company name. The game uses a cute image of a 223