Document Preview: 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.
Balance Sheets XXXXXXXXXX
Cash $52,000 57,600
Accounts receivable 402,000 351,200
Inventory 836,000 715,200
Total current assets $1,290,000 $1,124,000
Gross fixed assets $527,000 $491,000
Less: Accumulated depreciation 166,200 146,200
Net fixed assets $360,800 344,800
Total assets $1,650,800 $1,468,800
Accounts payable $175,200 $145,600
Notes payable 225,000 200,000
Accruals 140,000 136,000
Total current liabilities $ XXXXXXXXXX , XXXXXXXXXX $481,600
Long-term debt XXXXXXXXXX4 2 4 , XXXXXXXXXX $323,432
Common stock 460,000 460,000
Retained earnings 225,988 203,768
Total equity $685,988 $663,768
Total Claims $1,650,800 $1,468,800
INCOME STATEMENTS
Sales $ 3 , XXXXXXXXXX , XXXXXXXXXX $3,432,000
Cost of goods sold 3,250,000 2,864,000
Other expenses 430,300 340,000
Depreciation 20,000 18,900
EBIT $ XXXXXXXXXX , XXXXXXXXXX $209,100
Interest expense 76,000 62,500
EBT $73,700 146,600
Taxes (40%) 29,480 58,640
Net income $44,220 $87,960
OTHER DATA
December 31 stock price $6.00 $8.50
Number of shares outstanding 100, XXXXXXXXXX100,000
Dividend per share $0.22 $0.22
Annual lease payment $40,000 $40,000
Earnings per share $0.442 $0.880Gardems also developed the following industry average data for 2012:
Ratio Industry Average
Current XXXXXXXXXX7
Quick XXXXXXXXXX
Inventory Turnover 7.0
Days sales outstanding (DSO XXXXXXXXXX days
Fixed asset turnover ...