1 You're the chief financial officer (CFO) of Worldwide Widget Manufacturing, Inc. The company manufactures and sells widgets at factories in the United States and internationally. Listed below are partial financial statements for Worldwide Widget Manufacturing, Inc. Fill in the missing information in each of the following financial statements. Answer spaces are given below.

Worldwide Widget Manufacturing, Inc. Balance Sheet as of December 31, 2019, and 2018 (in millions of dollars)
	2019	2018		2019	2018
Assets			Liabilities and Equity
Current assets:			Current liabilities:
Cash and marketable securities	$427	$322	Accrued wages and taxes	$309	$257
Accounts receivable	a. ?	259	Accounts payable	381	b. ?
Inventory	815	797	Notes payable	$492	$421
Total	$1,542	$1,378	Total	$1,182	$997
Fixed assets:			Long-term debt:	1,934	c. ?
Gross plant and equipment	d. ?	$2,817	Total	3,116	2,956
Less: Depreciation	368	254	Stockholders' equity:
Net plant and equipment	$2,872	$2,563	Preferred stock (30 million shares)	$30	$30
Other long-term assets	521	487	Common stock and paid-in surplus (250 million shares)	300	e. ?
			Retained earnings	1,489	1,142
Total FA	f. ?	$3,050	Total Equity	$1,819	$1,472
Total assets	$4,935	$4,428	Total liabilities and equity	$4,935	$4,428

A. Accounts receivable for 2019 ________

B. Accounts payable for 2018 ________

C. Long-term debt for 2018 ________

D. Gross plant and equipment for 2019 ________

E. Common stock and paid-in surplus (250 million shares) for 2018 ________

F. Total FA for 2019 ________

Worldwide Widget Manufacturing, Inc. Income Statement for Years Ending December 31, 2019, and 2018 (in millions of dollars)
	2019	2018
Net sales	g. ?	$2,018
Less: Cost of goods sold	753	h. ?
Gross profits	$1,623	$1,189
Less: Other operating expenses	423	167
Earnings before interest, taxes, depreciation, and amortization (EBITDA)	$1,200	$1,022
Less: Depreciation	114	114
Earnings before interest and taxes (EBIT)	$1,086	$ 908
Less: Interest	i. ?	128
Earnings before taxes (EBT)	$949	$780
Less: Taxes	j. ?	234
Net income	$664	$546
Less: Preferred stock dividends	98	98
Net income available to common stockholders	$566	$448
Less: Common stock dividends	219	199
Addition to retained earnings	$347	$249
Per (common) share data:
Earnings per share (EPS)	k. ?	$1.79
Dividends per share (DPS)	$0.88	l. ?
Book value per share (BVPS)	m. ?	$5.77
Market value per share (MVPS)	$23.97	$22.47

G. Net sales for 2019 ________

H. Less: Cost of goods sold for 2018 ________

I. Less: Interest for 2019 ________

J. Less: Taxes for 2019 ________

K. Earnings per share (EPS) for 2019 ________

L. Dividends per share (DPS) for 2018 ________

M. Book value per share (BVPS) for 2019 ________

Worldwide Widget Manufacturing, Inc. Statement of Cash Flows for Year Ending December 31, 2019 (in millions of dollars)
Section A. Cash flows from operating activities
Net income	n. ?
Additions (sources of cash):
Depreciation	114
Increase in accrued wages and taxes	o. ?
Increase in accounts payable	62
Subtractions (uses of cash):
Increase in accounts receivable	-41
Increase in inventory	p. ?
Net cash flow from operating activities	q. ?
Section B. Cash flows from investing activities
Subtractions:
Increase in fixed assets	-$343
Increase in other long-term assets	r. ?
Net cash flow from investing activities:	s. ?
Section C. Cash flows from financing activities
Additions:
Increase in notes payable	t. ?
Increase in common and preferred stock	0
Subtractions:
Decrease in long-term debt	-25
Pay dividends	u. ?
Net cash flow from financing activities:	v. ?
Section D. Net change in cash and marketable securities	$105

N. Net income ________

O. Increase in accrued wages and taxes ________

P. Increase in inventory ________

Q. Net cash flow from operating activities ________

R. Increase in other long-term assets ________

S. Net cash flow from investing activities ________

T. Increase in notes payable ________

U. Pay dividends ________

V. Net cash flow from financing activities ________

Worldwide Widget Manufacturing, Inc. Statement of Retained Earnings as of December 31, 2019 (in millions of dollars)
Balance of retained earnings, December 31, 2018		$1,142
Plus: Net income for 2019		w. ?
Preferred stock	x. ?
Common stock	219
Total cash dividends paid		317
Balance of retained earnings, December 31, 2019		$1,489

W. Plus: Net income for 2019________

X. Preferred stock ________

2. For each of the items listed below indicate on which of the major statements they would be found (1, 2, 3, or 4) and the amount shown on the statements above:

1. Balance sheet	3. Statement of cash flows
2. Income statement	4. Statement of retained earnings

2. Earnings before taxes for 2019 ________; $________
4. Gross plant and equipment for 2019 ________; $________
6. Increase in fixed assets, December 31, 2019 ________; $________
8. Net sales for 2019 ________; $________
10. Balance of retained earnings, December 31, 2019 ________; $________
12. Common stock and paid-in surplus for 2018 ________; $________
14. Net cash flow from investing activities, December 31, 2019 ________; $________
16. Increase in inventory, December 31, 2019 ________; $________
18. Accrued wages and taxes for 2018 ________; $________
20. Book value per share (BVPS) for 2019 ________; $________

3. You'll need to compare your company's ratios with the industry's standards.

Worldwide Widget Manufacturing, Inc.
	Company	Industry	Comparison
Current ratio		2.2 times
Quick ratio		1.1 times
Cash ratio		0.35 times
Inventory turnover		2 times or 1 time
Days' sales in inventory		135 days or 335 days
Average payment period		110 days
Sales to working capital		3 times
Total asset turnover		0.6 times
Debt-to-equity		1.1 times
Profit margin		16.5%
Gross profit margin		48.13%
ROA		8.78%
ROE		19.45%
Dividend payout		32%

2. Use the information found in Worldwide Widget Manufacturing's financial statements to calculate all of the listed financial ratios in the above table for your company. Then, for each ratio, provide a comparison of the company's result with the industry standards, indicating if your company's results are lower than, higher than, slower than, or faster than the industry standards.
4. Calculate your company's internal and sustainable growth rates.