27. Comparative historical financial statements for Northern Manufacturing of the preceeding problem are as follows.

a. Use the ANALYS program to prepare common size statements and a set of financial ratios for each of the last three years.

b. Analyze the results of ANALYS for Northern Manufacturing. The firm has been quite successful in terms of revenue and profit growth so far. Do the ratios reveal any disturbing trends that might indicate future problems?

Transcribed Image Text:

Northern Manufacturing Income Statements For the years ended ($000) 12/31/X1 12/31/X2 12/31/X3 Sales $17,850 $20,510 $22,560 COGS 9,100 10,665 11,506 Gross margin $ 8,750 $ 9,845 $11,054 Expense 5,180 5,702 5,332 Depreciation 600 650 700 EBIT $ 2,970 $ 3,493 $ 5,022 Interest 800 910 1,180 EBT $ 2,170 $ 2,583 $ 3,842 Tax 868 1,033 1,537 Net income $ 1,302 $ 1,550 $ 2,305 Dividends paid $ 650 $ 750 $ 1,200 Stock sold 0 0 1,000 Lease payments $ 500 $ 700 $ 800