4G 4G 14:47 43 QI Group assignment for ... Ads = DBS Group Assignment Below are...

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4G 4G 14:47 43 QI Group assignment for ... Ads = DBS Group Assignment Below are the financial statements for two firms T. P. Jarmon Company and ABC Company, for 2012 and 2013. a. How did T. P. Jarmon Company profit margins change from 2012 to 2013? To what would you attribute the differences? Answer the same question for ABC Company b. Compare the profit margins between T. P. Jarmon Company and ABC Company. How are they different? How would you explain these differences? c. What differences do you notice in the common-sized balance sheets that might indicate that one of the firms is doing better than the other? d. Conduct an Internet search on the two firms to gain additional insights as to causes of the financial differences between the firms in 2012 and continuing into 2013. e. How are the two companies doing financially today? T. P. Jarmon Company. Annual Income Statement and Common-Sized Income Statement for Years Ending December 31, 2012 and December 31, 2013 (in $ millions except earnings per share) 2012 2013 Dollars Percentage of Sales Dollars Percentage of Sales Sales $28,729 100.0% $29,795 100.0% Cost of goods sold (15,934) (55.5%) (16,230) (54.5%) Gross profits $12,795 44.5% $13,565 45.5% Selling, general, and administrative expenses (6,333) (22.0%) (6.465) (21.7%) Depreciation and amortization (248) (0.9%) (251) (0.8%) Other operating expenses (296) (1.0%) (244) (0.8%) Operating income $ 5,918 20.6% $ 6,605 22.2% Interest expense (1,253) (4.4%) (1,190) (4.0%) Nonoperating income (loss) (217) (-0.8%) (112) (-0.4%) Earnings before taxes $ 4,448 15.5% $ 5,303 17.8% Income taxes (1,526) (5.3%) (1,612) (5.4%) Net income $2,922 10.2% $3.691 12.4% Common shares outstanding Earnings per share 932.00 $ 3.14 942.00 $ 3.92 T. P. Jarmon Company. Balance Sheet and Common-Sized Balance Sheet for Years Ending December 31, 2012 and December 31, 2013 ($ millions) December 31, 2012 Dollars Percentage of Assets Dollars December 31, 2013 Percentage of Assets Cash and short-term investments $ 2,841 4.2% $ 1,862 2.7% Receivables Inventories Other current assets 7,385 10.8% 7,868 11.6% 2,036 3.0% 2,028 3.0% 1,002 1.5% 1,086 1.6% Total current assets $ 13,264 19.5% $12,844 18.9% Gross fixed assets $ 57,607 84.6% $57,849 85.1% Accumulated depreciation (4.828) (7.1%) (5,189) (7.6%) Net fixed assets $ 52,779 77.5% $52,660 77.4% III 4 4G 4G 14:47 43 QI Group assignment for ... Ads = DBS Group Assignment Below are the financial statements for two firms T. P. Jarmon Company and ABC Company, for 2012 and 2013. a. How did T. P. Jarmon Company profit margins change from 2012 to 2013? To what would you attribute the differences? Answer the same question for ABC Company b. Compare the profit margins between T. P. Jarmon Company and ABC Company. How are they different? How would you explain these differences? c. What differences do you notice in the common-sized balance sheets that might indicate that one of the firms is doing better than the other? d. Conduct an Internet search on the two firms to gain additional insights as to causes of the financial differences between the firms in 2012 and continuing into 2013. e. How are the two companies doing financially today? T. P. Jarmon Company. Annual Income Statement and Common-Sized Income Statement for Years Ending December 31, 2012 and December 31, 2013 (in $ millions except earnings per share) 2012 2013 Dollars Percentage of Sales Dollars Percentage of Sales Sales $28,729 100.0% $29,795 100.0% Cost of goods sold (15,934) (55.5%) (16,230) (54.5%) Gross profits $12,795 44.5% $13,565 45.5% Selling, general, and administrative expenses (6,333) (22.0%) (6.465) (21.7%) Depreciation and amortization (248) (0.9%) (251) (0.8%) Other operating expenses (296) (1.0%) (244) (0.8%) Operating income $ 5,918 20.6% $ 6,605 22.2% Interest expense (1,253) (4.4%) (1,190) (4.0%) Nonoperating income (loss) (217) (-0.8%) (112) (-0.4%) Earnings before taxes $ 4,448 15.5% $ 5,303 17.8% Income taxes (1,526) (5.3%) (1,612) (5.4%) Net income $2,922 10.2% $3.691 12.4% Common shares outstanding Earnings per share 932.00 $ 3.14 942.00 $ 3.92 T. P. Jarmon Company. Balance Sheet and Common-Sized Balance Sheet for Years Ending December 31, 2012 and December 31, 2013 ($ millions) December 31, 2012 Dollars Percentage of Assets Dollars December 31, 2013 Percentage of Assets Cash and short-term investments $ 2,841 4.2% $ 1,862 2.7% Receivables Inventories Other current assets 7,385 10.8% 7,868 11.6% 2,036 3.0% 2,028 3.0% 1,002 1.5% 1,086 1.6% Total current assets $ 13,264 19.5% $12,844 18.9% Gross fixed assets $ 57,607 84.6% $57,849 85.1% Accumulated depreciation (4.828) (7.1%) (5,189) (7.6%) Net fixed assets $ 52,779 77.5% $52,660 77.4% III 4