1. Calculate 2016 financial ratios for fictional firm Vikings, Inc.

2. Written report:

a. Prepare an analysis of where the company is now in terms of its financial ratios, what the strengths and weaknesses are, what it must do to regain its financial health, and what actions should be taken.

b. For each ratio, provide detailed calculations, discuss how the ratio has changed over time, and discuss how the ratio compares to the industry average.

Balance Sheets Assets Cash Short-Term Investments. Accounts Receivable Inventories Total Current Assets Gross Fixed Assets Less: Accumulated Depreciation Net Fixed Assets Total Assets 2014 2015 2016 $ 9,000 $ 7,282 $ 14,000 48,600 20,000 71,632 351,200 632,160 878,000 715,200 1,287,360 1,716,480 $ 1,124,000 $ 1,946,802 $ 2,680,112 491,000 1,202,950 1,220,000 146,200 263,160 383,160 $ 344,800 $ 939,790 $ 836,840 $ 1,468,800 $2,886,592 $ 3,516,952 Liabilities and Equity 2014 2015 2016 Accounts Payable $ 145,600 $ 324,000 $ 359,800 Notes Payable 200,000 720,000 300,000 Accruals 136,000 284,960 380,000 Total Current Liabilities $ 481,600 $ 1,328,960 $ 1,039,800 Long-Term Debt 323,432 1,000,000 500,000 Common Stock (100,000 Shares) 460,000 460,000 1,680,936 Retained Earnings 203,768 97,632 296,216 Total Equity $ 663,768 $ 557,632 $ 1,977,152 Total Liabilities And Equity $ 1,468,800 $ 2,886,592 $ 3,516,952 Income Statements 2014 2015 2016 Sales $ 3,432,000 $5,834,400 $ 7,035,600 Cost Of Goods Sold 2,864,000 4,980,000 5,800,000 Other Expenses 340,000 720,000 612,960 Depreciation 18,900 116,960 120,000 Total Operating Costs $ 3,222,900 $5,816,960 $ 6,532,960 EBIT $ 209,100 $ 17,440 $ 502,640 Interest Expense 62,500 176,000 80,000 EBT $ 146,600 $ (158,560) $ 422,640 Taxes (40%) 58,640 (63,424) 169,056 Net Income $ 87,960 $ (95,136) $ 253,584 $ Other Data Stock Price Shares Outstanding EPS $ DPS $ Tax Rate Book Value Per Share $ Lease Payments $ 2014 2015 2016 8.50 $ 6.00 $ 12.17 100,000 100,000 250,000 0.880 $ (0.951) $ 1.014 0.220 $ 0.110 $ 0.220 40% 40% 40% 6.638 $ 5.576 $ 7.909 40,000 $ 40,000 $ 40,000 2016 Ratio Analysis Current Quick Inventory Turnover Days Sales Outstanding Fixed Assets Turnover Total Assets Turnover Debt to Invested Capital TIE Profit Margin Basic Earning Power ROA ROE Price/Earnings (P/E) Market/Book 2014 2.3 0.8 4.8 37.4 10.0 2.3 44.1% 3.3 2.6% 14.2% 6.0% 13.3% 9.7 1.3 2015 1.5 0.5 4.5 39.5 6.2 2.0 75.5% 0.1 -1.6% 0.6% -3.3% -17.1% -6.3 1.1 Industry Average 2.7 1.0 6.1 32.0 7.0 2.5 40.0% 6.2 3.6% 17.8% 9.0% 17.9% 16.2 2.9