1 KPL Company K.S.C.P. All Amounts in KWD 2 Balance Sheet 3 2018 2019 2020 Horizontal Analysis Industry Average 113% 9,685,300 7,031,100 20,399,850 4,365,400 10,565,050 25,847,400 21,476,250 106% 117% 18,838,150 138% 4 Assets 5 Cash 6 Short Term Investments 7 Accounts Receivable 8 Total Inventory 9 Prepaid Expenses 10 Total Current Assets 11 Property/Plant/Equipment - Total - Gross 12 Accumulated Depreciation - Total 13 Property/Plant/Equipment-Total-Net 14 Long Term Investments 15 Total Assets 3,768,550 5,294,600 20,595,350 19,683,400 931,500 41,953,150 118,206,200 183,993,700) 34,211,350 633,650 568,100 48,171,200 81% 113% 120,065,750 51,239,400 121,280,150 (90,151,950) 89N 87% 88% (87,946,250) 32,124,100 47,296,050 127,590,200 46,921,150 31,128,200 48,458,700 130,826,300 95% 123,086,800 95% 16 8,415,700 8,115,550 69% 1.644,500 243% 723,350 77% 1,639.900 5,800,600 3,521,300 21,564,800 17 Liabilities 18 Accounts Payable 19 Accrued Expenses 20 Notes Payable/Short Term Debt 21 Other Current liabilities. Total 22 Total Current abilities 23 Long Term Debt 24 Total Long Term Debt 25 Total Debt 26 Minority interest 27 Other Liabilities - Total 28 Total Liabilities 9,367,900 1,848,050 731,400 2,634,650 14,582,000 1,521,130 4,692,000 306% 15,293,850 99% 1.443,000 1,583,800 100% 1,443,000 1,521.130 100% 1,583,800 841,800 7,987,900 731,400 10% 3,207,350 3,280,950 6,471,050 157 5,925,950 6,268,650 6,488,300 109) 30,690,100 24,843,450 27,541,350 78% 29 40,013,100 100% 39,877,400 36,824,150 14,567,050 37,033,450 100% 16,990,100 43% 30 Shareholders Equity 31 Common Stock - Total 32 Additional Paid-in Capital 33 Retained Earnings (Accumulated Delicit) 34 Treasury Stock-Common 35 Unrealized Gain (Loss) 36 Other Equity - Total 37 Total Equity 39,845,650 36.795,400 5,953,250 16,9001 9,841,700 140,250) 92,388,700 16.900) (39.100) 1% 11.443,650 9,087,300 856% 41,400 -4% 201 250 103,286,100 102,746.750 103N 38 C D Income Statement 2018 2019 2020 95% 100% 51,359,000 51,359,000 Revenue Total Revenue Cost of Revenue, Total Gross Profit 54,790,600 54,790,600 39,876,250 102% 55,448,400 55,448,400 40,315,550 15,132,850 38,918,300 102% 12,441,850 14,914,350 102% 111% 117% 94% Selling/General/Admin. Expenses, Total Interest Expense (income). Net Operating Total Unusual Expense (Income) Other Operating Expenses, Total Total Operating Expense Operating income Interest Income (Expense), Net-Non-Operating Total Gain (LOS) on Sale of Assets Net Income Before Taxes 6,008,750 (18,400) 6,157,100 (253,000) 50,811,600 $47.400 (1,803,200) 1,946,950 5,761,500 (101,200) 1,582,400 (242,650) 46,876,300 7,914,300 923,450 158% 6,621,700 (178,250) 822,250 (264,500) 47,316,750 8,131,650 1,490,400 10% 535% 27% 142% 692,300 8,837,750 9,620,900 5% 143% 35,650 169% 374,900 8,464,000 656,650 14 Provision for Income Taxes Net Income After Taxes Minority interest Net Income 393,300 9,227,600 (272,550) 8,956,200 (66,700) 589,950 8,464,000 15% 1 13% 2 3 6% 4 5 12% -6 12% 2 8 12% 19 12% 70 21 12% 101% WN 8% 0% 74 75 92% 76 Based on all your calculations and conclusions above, what is your assessment of the new CEO's performance so far? List as many strengths/pros and weaknesses/cons on his performance as you can below: Areas of Strength Areas of Weakness NOTE: ALL YOU WORKINGS MUST BE DONE ON THE EXCEL SHEET USING EQUATIONS Ratio Formula Ratio Formula Liquidity Current Gross profit margin EBIT Total current assets Total current liabilities Current assets - inventories Current liabilities Net return on assets Quick, or Acid Test Gross return on assets Total operating revenue Net income Total average assets EBIT Total average assets Net income to stokholders Average common equity Asset Management Inventory Tumover Return on common equity Days sales outstanding Fixed assets tumover Cost of goods sold Inventories (average) Receivables Sales per day Annual sales Net fixed assets (average) Annual sales Total assets (average) Total assets turnover Debt Management Debt ratio Interest coverage Total debt Total assets EBIT Interest charges Profitability Net profit margin Net income Total operating revenue You are requested to refer to the financial statements for to KPL Company K.S.C.C. and perform the following: 1) Perform the Horizontal Analysis (as a %) using 2018 as the base year. 2) What can you conclude about the company's overall health/performance compared to the Industry average with regards to the following (fill the table): Line Item 2019 % 2020 % Conclusions Ind. Avg. 113% Cash 138% Total Inventory Accounts Receivable Total Liabilities 117% 78% 102% Cost of Goods Sold Gross Profit 102% Net Income 104% 3) On the excel sheet provided, calculate all of the ratios included in the equation sheet provided on the next page. 4) You were not able to find the industry averages for Kuwait for the above ratios. However, what conclusions can you make from the ratios