2. Case study analysis (5 Points):
a) Why should one begin a case analysis with a financial analysis?
b) When are other approaches appropriate?
Bb Documents & Content - 2019-F X Bb Bitsch et al.2006 - 2019-FL-AC X = Case Study 2 (1) - Google Doc: X . Reef - Polling Active Homework Help - Q&A from Or x + C docs.google.com/document/d/10T_ze9zSuPm-4tJmrfzIZH39GzHO5EMa2hd_02AatAY/edit# N Apps YouTube Maps M Gmail My Drive - Google... $ myStanState Portal h Hulu @ Pearson Sign In D Reef Case Study 2 (1) a Share N File Edit View Insert Format Tools Add-ons Help All changes saved in Drive 100% Normal text Times New... 12 Editing 1 1 4 1 1 1 1 1 1 1 5 1 1 1 1 1 1 1 6 1 1 1 7 1 1 1 7 1 1 Outline Case Study Analysis 2: 1. Convert the following two years of income statements of Stan Ag Company into common-size statements (20 Points) nalysis 2: 2017 % 2016 Net Sales $3,041,223 100% $2,970,626 100% Cost of sales 2,339.406 76.92% 2,254,221 75.88% Gross profits 701,817 23.08% 716,405 24.12% Selling, general, admin expenses 528,250 17.37% 524,898 17.67% Reorganization 3.12% 0% Expenses 95.000 Operating income 78,567 2.58% 191,507 6.45% Interest expense (75,004) -2.47% (75,159) 2.53% Other-net 3,983 0.13% 7,069 0.24% Income before Taxes and Accounting Changes 0.25% 4.15% 7.546 123,417 Income taxes (15,900) 0.52% (44,400) -1.49% Income before (8,354) -0.27% 79,017 2.66% account changes Effects of account changes (307,000) -10.09% 0% for postretirement benefits Net income (loss) $(315,354) 10.37% $79,017 2.66% The dollar figures are in thousands. What does converting to a common size reveal about the +Bb Documents & Content - 2019-F X Bb Bitsch et al.2006 - 2019-FL-AC X = Case Study 2 (1) - Google Doc: X . Reef - Polling Active Homework Help - Q&A from Or x + C docs.google.com/document/d/10T_ze9zSuPm-4tJmrfzIZH39GzHO5EMa2hd_02AatAY/edit# N Apps YouTube Maps M Gmail My Drive - Google... $ myStanState Portal h Hulu @ Pearson Sign In D Reef Case Study 2 (1) a Share N File Edit View Insert Format Tools Add-ons Help All changes saved in Drive 100% Normal text Times New... 12 BIU AN GAY BEE Editing 31 1 1 1 1 1 1 1 12 1 1 15 1 1 1 1 7 admin expenses Outline Reorganization 3.12% 0% Expenses 95,000 Operating income 78,567 2.58% 191,507 6.45% nalysis 2: Interest expense (75,004) -2.47% (75, 159) 2.53% Other-net 3.983 0.13% 7.069 0.24% Income before Taxes and Accounting Changes 0.25% 4.15% 7,546 123,417 Income taxes (15,900 -0.52% (44,400) -1.49% Income before (8,354) -0.27% 79,017 2.66% account changes Effects of account changes (307,000) -10.09% 0% for postretirement benefits Net income (loss) $(315,354) 10.37% $79,017 2.66% The dollar figures are in thousands. What does converting to a common size reveal about the current and future performance of the company with specific focus on the following?: 1) Sales over the years 2) Efficiency of sales 3) Selling, general, admin expenses 4) Reorganization expenses 5) Profitability of the company over the year +
