write a recommendation / summary of milavec financial reports using the following formula sheet

Liquidity Ratios

Working Capital = Current assets Current liabilities

Current Ratio = Current assets/Current liabilities

Quick Ratio (acid-test) = Quick assets/Current liabilities

Accounts Receivable Turnover = Net credit sales/Average accounts receivable

Average Days to Collect Receivables = 365/Accounts receivable turnover

Inventory Turnover = COGS/Average ending inventory

Average Days to Sell Inventory = 365/Inventory turnover

Solvency Ratios

Debt to Assets = Total liabilities/Total assets

Debt to Equity = Total liabilities/Total stockholders equity

Number of Times Interest is Earned = Earnings before interest & tax exp/Interest exp

Plant Assets to Long-Term Liabilities = Net plant assets/Long-term liabilities

Management Effectiveness Ratios

Net Margin (return on sales) = Net income/Net sales

Asset Turnover = Net sales/Average total assets

Return on Investment (ROI) = Net income/Average total assets

Return on Equity (ROE) = Net income/Avg total stockholders equity

Stock Market Ratios

Earnings per Share = Net earnings avail for CS/Avg number CS shares outstanding

Book Value per Share = Stockholders equity Preferred stock/Outstanding CS shares

Price-Earnings Ratio = Market price per share/Earnings per share

Dividend Yield = Dividends per share/Market price per share

EXHIBIT 9.1 MILAVEC COMPANY Income Statements and Statements of Retained Earnings For the Years Ending December 31 Year 4 Year 3 $900,000 $800,000 Sales Cost of goods sold Beginning inventory Purchases Goods available for sale Ending inventory Cost of goods sold Gross margin Operating expenses Income before taxes Income taxes Net income Plus: Retained earnings, beginning balance Less: Dividends Retained earnings, ending balance 43,000 637,000 680,000 70,000 610,000 290,000 248,000 42,000 17,000 25,000 40,000 483,000 523,000 43,000 480,000 320,000 280,000 40,000 18,000 22,000 137,000 0 130,000 15,000 $162,000 $137,000 EXHIBIT 9.2 MILAVEC COMPANY Balance Sheets As of December 31 Year 4 Year 3 $ 20,000 20,000 4,000 50,000 70,000 4,000 $ 17,000 22,000 3,000 56,000 43,000 4,000 340,000 $508,000 310,000 $455,000 Assets Cash Marketable securities Notes receivable Accounts receivable Merchandise inventory Prepaid expenses Property, plant, and equipment (net) Total assets Liabilities and Stockholders' Equity Accounts payable Salaries payable Taxes payable Bonds payable, 8% Preferred stock, 6%, $100 par, cumulative Common stock, $10 par Retained earnings Total liabilities and stockholders' equity $ 40,000 2,000 4,000 100,000 $ 38,000 3,000 2,000 100,000 50,000 150,000 162,000 50,000 125,000 137,000 $508,000 $455,000