Module 1: Assignment: Problem

Donna Jamison was recently hired as a financial analyst by Computron Industries, a manufacturer of electronic components. Her first task was to conduct a financial analysis of the firm covering the last two years. You will be taking on the role of Donna Jamison.

Requirements. Be sure to include not only the answers to each problem, but the work that you performed to arrived at that answer. You can send me the google docs link of either Microsoft Word or Excel.

Module 1 Problem Sheet

Balance SheetsAssets Cash Accounts receivable Inventories Total current assets Gross fixed assets Less accumulated depreciation Net fixed assets Total assets Liabilities and Equity Accounts payable Notes payable Accruals Total current liabilities Long-term debt Common stock (100,000 shares) Retained earnings Total equity Total liabilities and equity (continued) Income Statements	2015 $ 52,000 402,000 836,000 $1,290,000 527,000 166,200 $ 360,800 $1,650,800 $ 175,200 225,000 140,000 $ 540,200 424,612 460,000 225,988 $ 685,988 $1,650,800 2015	2016 $ 57,600 351,200 715,200 $1,124,000 491,000 146,200 $ 344,800 $1,468,800 $ 145,600 200,000 136,000 $ 481,600 323,432 460,000 203,768 $ 663,768 $1,468,800 2016
Sales	$3,850,000	$3,432,000
Cost of goods sold	(3,250,000)	(2,864,000)
Other expenses	( 430,300)	( 340,000)
Depreciation	( 20,000)	( 18,900)

Donna Jamison was recently hired as a financial analyst by Computron Industries, a manufacturer of electronic components. Her first task was to conduct a financial analysis of the firm covering the last two

years. To begin, she gathered the following financial statements and other data.

Total operating costs EBIT Interest expense EBT Taxes (40%) Net income EPS Other Data	$3,700,300 $ 149,700 ( 76,000) $ 73,700 ( 29,480) $ 44,220 $0.442 2015	$3,222,900 $ 209,100 ( 62,500) $ 146,600 ( 58,640) $ 87,960 $0.880 2016
December 31 stock price	$6.00	$8.50
Number of shares	100,000	100,000
Dividends per share	$ 0.22 $1.1018
Lease payments	$40,000 $40,000

Industry average data for 2016:

Ratio Industry Average

Current 2.7x

Quick 1.0x

Inventory turnover 6.0x

Days sales outstanding (DSO) 32.0 days

Fixed assets turnover 10.7x

Total assets turnover 2.6x

Debt ratio 50.0%

TIE 2.5x

Fixed charge coverage 2.1x

Net profit margin 3.5%

ROA 9.1 %

ROE 18.2%

Price/earnings 14.2x

Market/book 1.4x Assume that you are Donna Jamison's assistant and that she has asked you to help her prepare a report that evaluates the company's financial condition. Answer the following questions:

1. What are Computron's current and quick ratios? What do they tell you about the company's liquidity position?

1. What is Computron's inventory turnover, day's sales outstanding, fixed assets turnover and total assets turnover ratios? How does the firm's utilization of assets stack up against that of the industry?