4 Margaret O'Flaherty, a portfolio manager for MCF Investments, is considering investing in Alpine Chemical 7% bonds, which mature in 10 years. She asks you to analyze the company to determine the riskiness of the bonds. Alpine Chemical Company Financial Statements 25 points ($ in millions) Assets Cash Accounts receivable Inventories Other current assets Current assets Gross fixed assets Less: Accumulated depreciation Net fixed assets Total assets Liabilities and net worth Notes payable Accounts payable Accrued liabilities Current liabilities Long-term debt Deferred tax credits Total liabilities Common stock Capital surplus Retained earnings Net worth Total liabilities and net worth Income statement Net sales Cost of goods sold Gross profit Operating expense Operating income Interest expense Depreciation expense Profit before tax Income taxes Net income 20X1 20X2 Years Ended December 31, 20X3 20X4 20X5 20X6 $ 190 1,637 $ 55 2,087 $ 0 $ 157 1,394 2,143 $ 249 3,493 $ 0 3,451 2,021 945 1,258 1,293 1,322 1,643 17 27 55 393 33 171 3,865 3,114 2,707 3,986 5,097 5,265 4,650 5,038 5,619 5,757 6,181 7,187 2,177 2,543 2,841 3,138 3,465 3,893 2,473 2,495 2,778 2,619 2,716 3,294 $6,338 $5,609 $5,485 $6,605 $7,813 $8,559 $ 525 $ 750 $ 0 $1,300 $1,750 $1,900 673 638 681 338 743 978 303 172 359 359 483 761 1,501 1,560 1,040 1,997 2,976 3,639 1,985 1,044 1,401 1,457 1,542 1,491 352 347 363 336 345 354 3,838 50 2,951 2,804 3,790 4,863 5,484 50 100 100 100 100 100 100 0 0 0 0 2,350 2,508 2,581 2,715 2,850 2,975 2,500 2,658 2,681 2,815 2,950 3,075 $6,338 $5,609 $5,485 $6,605 $7,813 $8,559 20X1 $14,100 20X2 $15,508 20X3 $13,875 20X4 $14,750 20X5 $19,133 20X6 $19,460 10,200 11,220 9,366 10,059 13,400 13,117 3,900 4,288 4,509 4,691 5,733 6,343 2,065 2,203 2,665 2,685 3,472 3,885 1,835 2,085 1,844 2,006 2,261 2,458 275 465 275 319 376 318 475 477 479 478 495 511 1,085 1,143 1,090 1,209 193 115 265 145 1,390 192 1,629 150 $ +A 892 $ 1,028 $ 825 $ 1,064 $ 1,198 $ 1,479