Financial Statement Analysis Worksheet

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timer Asked: May 8th, 2018
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Instructions

One of the most critical responsibilities of financial analysis is analyzing a company's financial statements. This assignment provides you with an opportunity to calculate the ratios necessary to perform an analysis of financial statements.

Use the Module Two Financial Statement Analysis Data PDF to complete the calculations found in the Module Two Financial Statement Analysis Worksheet document.



Analysis of Financial Statements Balance Sheets EXHIBITS: INPUT DATA (XYZ) Table 1 Balance Sheets 2013E 2012 2011 Assets Cash Accounts receivable Inventories Total current assets Gross fixed assets Less: accumulated depreciation Net fixed assets Total assets $ 85,632 878,000 1,716,480 $2,680,112 1,197,160 380,120 $ 817,040 $3,497,152 $ 7,282 632,160 1,287,360 $1,926,802 1,202,950 263,160 $ 939,790 $2,866,592 $ Liabilities and equity Accounts payable Notes payable Accruals Total current liabilities Long-term bonds Total debt Common stock (100,000 shares) Retained earnings Total common equity Total liabilities and equity $ 436,800 300,000 408,000 $1,144,800 400,000 $1,544,800 1,721,176 231,176 $1,952,352 $3,497,152 $ 524,160 636,808 489,600 $1,650,568 723,432 $2,374,000 460,000 32,592 $ 492,592 $2,866,592 $ 57,600 351,200 715,200 $ 1,124,000 491,000 146,200 $ 344,800 $ 1,468,800 $ $ $ $ 145,600 200,000 136,000 481,600 323,432 805,032 460,000 203,768 663,768 1,468,800 Analysis of Financial Statements Income Statements 2013E 2012 2011 $7,035,600 $6,034,000 $ 3,432,000 5,875,992 5,528,000 2,864,000 550,000 $6,425,992 $ 609,608 116,960 $ 492,648 70,008 $ 422,640 169,056 $ 253,584 519,988 $6,047,988 $ (13,988) 116,960 $ (130,948) 136,012 $ (266,960) (106,784) $ (160,176) 358,672 $ 3,222,672 $ 209,328 18,900 $ 190,428 43,828 $ 146,600 58,640 $ 87,960 $ $ $ $ $ (1.602) $ 0.110 $ 4.926 $ 2.25 100,000 40.00% $ 40,000 0 $ $ $ $ Table 2 Income Statements Sales Cost of goods sold Other expenses Total operating exp. excl. depreciation and amortization EBITDA Depreciation and amortization Earnings before interest and taxes (EBIT) Interest expense Earnings before taxes (EBT) Taxes (40%) Net Income Earnings per share (EPS) Dividends per share (DPS) Book value per share (BVPS) Stock price Shares outstanding Tax rate Lease payments Sinking fund payments 1.014 0.220 7.809 12.17 250,000 40.00% $ 40,000 0 $ 0.880 0.220 6.638 8.50 100,000 40.00% 40,000 0 Analysis of Financial Statements Ratio Analysis Current ratio Quick ratio Inventory turnover Days sales outstanding (DSO) Fixed assets turnover Total assets turnover Debt-to-assets ratio Times interest earned (TIE) Operating margin Profit margin Basic earning power (BEP) Return on assets (ROA) Return on equity (ROE) Price/earnings (P/E) Market/book (M/B) Book value per share (BVPS) 2013E * * * * * * * * * * * * * * * * 2012 1.2 0.4 4.7 38.2 6.4 2.1 82.8% -1.0 -2.2% -2.7% -4.6% -5.6% -32.5% -1.4 0.5 $4.93 2011 2.3 0.8 4.8 37.4 10.0 2.3 54.8% 4.3 5.6% 2.6% 13.0% 6.0% 13.3% 9.7 1.3 $6.64 Industry Average 2.7 1.0 6.1 32.0 7.0 2.6 50.0% 6.2 7.3% 3.5% 19.1% 9.1% 18.2% 14.2 2.4 n.a. *The calculations from your module 2 assignment would complete column 2013E. You are not required to complete the ratio analysis chart as part of your assignment, you will submit the calculations with rationale in a word document.
MBA 520 Module Two Financial Statement Analysis Worksheet The main goal of financial statement analysis is to use past and current performance to identify changes and trends that will affect a company. Financial ratios are a widely used form of financial analysis in which the relationship between two or more line items is analyzed to evaluate a company’s performance. The calculations you practice in this assignment will be applicable in completing Milestone One, specifically determining recent financial performance and current financial health. Prompt Reference the information found in the Module Two Financial Statements Analysis Data PDF located in the Assignment Guidelines and Rubrics folder to complete the following. Once you have calculated the ratios asked for using the data in the PDF, provide a brief summary of how the ratios are used and why they are important. Once you have completed the calculations, provide a brief, two- to four-sentence rationale for how these calculations can be used in analyzing the financial position of a company and why they are important. Your rationale should explain what information the ratio provides to the reader and how the reader may use that information. Use the Shapiro Library, your text, and the non-graded discussion forum in this module to ask questions of your peers to inform your responses to the questions below. Before beginning this assignment, you will need to download and/or print the Module Two Financial Statements Analysis Data PDF in order to complete the assignment. 1. (12.5 points) Calculate XYZ’s 2013 current and quick ratios based on the projected balance sheet and income statement data. 2. (12.5 points) Calculate the 2013 inventory turnover, days sales outstanding (DSO), fixed assets turnover, and total assets turnover. 3. (12.5 points) Calculate the 2013 debt-to-assets and times-interest-earned ratios. 4. (12.5 points) Calculate the 2013 operating margin, profit margin, basic earning power (BEP), return on assets (ROA), and return on equity (ROE). 5. (12.5 points) Calculate the 2013 price/earnings ratio, and market/book ratio. Worksheet adapted from Brigham, E., & Houston, J. F. (2016). Fundamentals of financial management (14th ed.). Boston, MA: Cengage Learning. 6. (12.5 points) Use the extended DuPont equation to provide a summary and overview of XYZ’s financial condition as projected for 2013. 7. (12.5 points) Use the following simplified 2013 balance sheet to show, in general terms, how an improvement in the DSO would tend to affect the stock price. For example, if the company could improve its collection procedures and thereby lower its DSO from 45.6 days to the 32-day industry average without affecting sales, how would that change “ripple through” the financial statements (shown in thousands below) and influence the stock price? Accounts receivable $878 Debt $1,545 Other current assets 1,802 Net fixed assets 817 Equity 1,952 Total assets $3,497 Liabilities plus equity $3,497 First, we need to calculate XYZ’s daily sales. Daily sales = Sales / 365 Daily sales = $7,035,600 / 365 Daily sales = $19,275.62 Target A/R = Daily sales × Target DSO Target A/R = $19,276 × 32 Target A/R = $616,820 Freed-up cash = old A/R – new A/R Freed-up cash = $878,000 – $616,820 Worksheet adapted from Brigham, E., & Houston, J. F. (2016). Fundamentals of financial management (14th ed.). Boston, MA: Cengage Learning. Freed-up cash = $261,180 8. (12.5 points) Provide a brief summary or rationale of how these ratios are used, and why they are important. Worksheet adapted from Brigham, E., & Houston, J. F. (2016). Fundamentals of financial management (14th ed.). Boston, MA: Cengage Learning.

Tutor Answer

coneytutor
School: University of Maryland

Attached.

Running head: 2013 FINANCIAL RATIOS FOR XYZ

2013 Financial Ratios for XYZ
Name
Institution

1

2013 FINANCIAL RATIOS FOR XYZ
Qn 1 quick and current ratio calculations for year 2013.
a) Current ratio is the proportion of current assets against current liabilities.
Current ratio (13) =Total current assets (13)/Total current liabilities (13)
=$2,680,112/$1,144,800
Current ratio (13) =2.34
b) Quick ratio (13) = (Total current assets (13)-inventories (13))/Total current liabilities (13)
= ($2,680,112-$1,716,480) /$1,114,800 =0.864
Quick ratio (13) = 0.864
Qn 2 calculation of days sales outstanding (D.S.O), fixed assets turnover, total assets turnover
and inventory turnover.
a). Total assets turnover for 2013.
Total assets turnover (13) =sales (13)/Total assets (13)
=$7,035,600/$3,497,152
Total assets turnover (13) =2.01
b) Day sales outstanding
DSO (13) = Account Receivables (13)/ (sales (13)/365 days)
= ($878,000/$7,035,600) * 365 days
Day sales outstanding =45.55 days

2

2013 FINANCIAL RATIOS FOR XYZ
c) Inve...

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Anonymous
Wow this is really good.... didn't expect it. Sweet!!!!

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