Gardems was recently hired as a financial analyst by Taylor, Inc., which is a Pennsylvania based...

Question

Gardems was recently hired as a financial analyst by Taylor, Inc., which is a Pennsylvania based company. His first task is to conduct a financial statement analysis of firm covering the past 2 years. Download the statementhere then review the statement to complete an report based on his assumptions.

Robert · Accepted Answer

Answer A 
Taylor, Inc. is a Pennsylvania based company. It is a profit making company; however, the net 
profit of the company has decreased in comparison to the last year. As result of this downfall the 
earning per share of the company has decreased from $0.880 per share to $0.440 per share. In 
terms of the financial position of the company, the company is consistent performer; the current 
ratio of the company revolves close to 230% since last two years. There has been a sudden 
increase in the fixed assets block of the company; this shows some signs of growth for the 
company. There has been a 10% increase in the sales of the company, however, the increased 
sales numbers are been offset by increase in the other expenses head. Further, the company is 
relying more on the long term debt for meeting its working capital needs as result the long term 
debt of the company has increased by approx 30% in the current year as compared to the 
previous year. This has affected the debt equity ratio of the company and also the related interest 
cost has impacted the profit numbers.  
Answer B 
Cash flows from operating activities     
Net income    $         
44,220  
Adjustments for:     
Depreciation and amortization  $         
20,000
     $         
20,000  
Increase in trade receivables  $        
(50,800)
Increase in inventories  $      
(120,800)
Increase in trade payables  $         
29,600
Increase in Notes payables  $         
25,000
Increase in Accruals  $           
4,000
     $      
(113,

Gardems was recently hired as a financial analyst by Taylor, Inc., which is a Pennsylvania based company. His first task is to conduct a financial statement analysis of firm covering the past 2 years....

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