1. Answer the following questions regarding Herman Miller. a) What account causes the current ratio to be smaller than the industry and the quick ratio
1. Answer the following questions regarding Herman Miller.
a) What account causes the current ratio to be smaller than the industry and the quick ratio to be similar to the industry?
i) accounts receivable, ii) inventory, iii) Accounts Payable, iv) all of the above
b) Does the amount of time it takes Herman Miller to pay its suppliers appear to be a problem? (Hint: compare their ratios to the industry) (Yes or No answer)
c) When comparing the assets on the balance sheet to industry averages, what account should the analyst question?
i) total assets, ii) accounts receivable, iii) Accounts Payable, iv) inventory, v)Cash & equivalents, vi) Fixed Assets, vii) Goodwill, viii) Long Term Debt, ix) Other Liabilities
d) What was MLHR's Net Working Capital for the last two years (omit 000's)?
i) Most Current Year =
ii) Previous Year =
e) How big a factor would you say market conditions played on the performance of MLHR over the past 10 years?
i) very important, ii) somewhat important, iii) not relevant. iv) cyclical business
RATIO ANALYSIS Herman Miller RMA 6/1/2013 5/31/2014 5/30/2015 Industry Comparison 1.4 1.1 1.3 1.0 1.3 0.9 2.1 0.9 15.4 16.0 10.4 6.2 1.9 1.9 1.8 2.3 37 40 32.3 51 24 23 35.0 59 41 40 44.5 37 5/28/2011 6/2/2012 LIQUIDITY Current 1.8 1.8 Quick 1.5 1.6 ASSET MANAGEMENT Inventory Turnover 16.8 19.1 (COGS / Inventory) Total Asset Turnover 2.0 2.1 DSO (AR Period) 43 34 (365/AR Turnover) Inventory Period 22 19 (365/Inventory Turnover) Days in AP (AP Period) 37 37 (365/[COGS/AP]) Cash Cycle 27 16 LEVERAGE TIE (EBIT / Interest) 6.2 7.9 Debt / Equity (RMA Debt/Worth) 2.9 2.4 Cash Coverage Ratio 8.0 9.8 PROFITABILITY % Profit BT / Tot Assets 12.69% 14.24% Gross Profit 32.63% 34.26% PM (NI/Sales) RMA USES NIBTIS 4.29% 4.36% DuPont Analysis: ROE - ROA EM. ROA=PM'TAT ROE (NI / Total Equity) 34.54% 30.29% ROA (NI / Total Assets) 8.76% 8.96% JPM (NI / Sales) 4.29% 4.36% Total Asset Turnover 2.04 2.05 Equity Multiplier (A/E) 3.94 3.38 20 23 22.8 73 6.7 2.0 8.7 -1.5 1.7 0.7 9.3 1.8 11.9 5.6 1.5 10.27% 34.10% 3.84% 4.38% 33.53% -1.17% 12.17% 36.94% 4.58% 13.40% 28.30% 4.50% 21.35% 7.21% 3.84% 1.88 2.96 -5.94% -2.23% - 1.17% 1.90 2.66 22.75% 8.23% 4.58% 1.80 2.77 25.88% 10.35% 4.50% 2.30 2.50 RATIO ANALYSIS Herman Miller RMA 6/1/2013 5/31/2014 5/30/2015 Industry Comparison 1.4 1.1 1.3 1.0 1.3 0.9 2.1 0.9 15.4 16.0 10.4 6.2 1.9 1.9 1.8 2.3 37 40 32.3 51 24 23 35.0 59 41 40 44.5 37 5/28/2011 6/2/2012 LIQUIDITY Current 1.8 1.8 Quick 1.5 1.6 ASSET MANAGEMENT Inventory Turnover 16.8 19.1 (COGS / Inventory) Total Asset Turnover 2.0 2.1 DSO (AR Period) 43 34 (365/AR Turnover) Inventory Period 22 19 (365/Inventory Turnover) Days in AP (AP Period) 37 37 (365/[COGS/AP]) Cash Cycle 27 16 LEVERAGE TIE (EBIT / Interest) 6.2 7.9 Debt / Equity (RMA Debt/Worth) 2.9 2.4 Cash Coverage Ratio 8.0 9.8 PROFITABILITY % Profit BT / Tot Assets 12.69% 14.24% Gross Profit 32.63% 34.26% PM (NI/Sales) RMA USES NIBTIS 4.29% 4.36% DuPont Analysis: ROE - ROA EM. ROA=PM'TAT ROE (NI / Total Equity) 34.54% 30.29% ROA (NI / Total Assets) 8.76% 8.96% JPM (NI / Sales) 4.29% 4.36% Total Asset Turnover 2.04 2.05 Equity Multiplier (A/E) 3.94 3.38 20 23 22.8 73 6.7 2.0 8.7 -1.5 1.7 0.7 9.3 1.8 11.9 5.6 1.5 10.27% 34.10% 3.84% 4.38% 33.53% -1.17% 12.17% 36.94% 4.58% 13.40% 28.30% 4.50% 21.35% 7.21% 3.84% 1.88 2.96 -5.94% -2.23% - 1.17% 1.90 2.66 22.75% 8.23% 4.58% 1.80 2.77 25.88% 10.35% 4.50% 2.30 2.50
