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Posted on Aug 07, 2024

A B D E 3 4 un 6 7 2018 2019 2020 399,351.00 475,171.00 546,446.65 262,924.00 344,241.00 395,877.15 31,610.00 38,815.00 44,637.25 40,432.00 59,925.00 59,925.00 64,385.00

A B D E 3 4 un 6 7 2018 2019 2020 399,351.00 475,171.00 546,446.65 262,924.00 344,241.00 395,877.15 31,610.00 38,815.00 44,637.25 40,432.00 59,925.00 59,925.00 64,385.00 32,190.00 46,007.25 8,895.00 11,120.00 11,120.00 55,490.00 21,070.00 34,887.25 16,647.00 6,321.00 11,861.67 38,843.00 14,749.00 23,025.59 Sales Cost of goods sold Operating expenses Depreciation EBIT Interest Expense EBT Taxes Expense Net Income 2020 546,446.65 395,877.15 44,637.25 59,925.00 46,00 7.25 11,120.00 34,887.25 11,861.67 23,025.59 8 9 10 11 12 13 14 15 Dividends paid Add to RE 11,650.00 27,193.00 12,650.00 2,099.00 20,669.73 2,355.86 20,669.73 2,355.86 16 B D E G H Balance Sheet 2018 2019 2020 2018 2019 2020 2020 Current Assets: Cash Accounts Receivable Inventory Total current assets 10,619.00 37,810.00 25,437,00 73,866.00 20,055.00 53,725.00 65,798.00 139,578,00 23,063.25 61,783.75 75,667.70 160,514.70 39,023.00 28,349.00 67,372.00 40, 107.00 74,213.00 114,320.00 46,123.05 74,213.00 120,336,05 46,123.05 74,213.00 120,336,05 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 2020 Current Liabilities: 23,063.25 Accounts payable 61,783.75 Notes payable 75,667.70 Total current liabilities 160,514.70 Long-term debt 226,835.20 Equity Common Shares Retained Earnings Total equity 105,042,00 137,491.00 137,491.00 179,642.99 Net Fixed Assets 181,464.00 197,248.00 226,835.20 44,850.00 38,066,00 82,916,00 44,850.00 40,165.00 85,015.00 44,850.00 42,520.86 87,370.86 44,850.00 42.520.86 87,370.86 Total Assets 255,330,00 336,826.00 387,349.90 255,330,00 336,826.00 387,349.90 387,349.90 Total Liab & Equity EFN 345,197.91 42,151.99 35 PART 2 - Analysis 1) Prove that the DuPont Identity is working. Calculate ROE using this identity for all 3 years and show that it matches to your earlier calculation of ROE. 2) Analyze the projected ROE for this company using all 3 years of data, all components of the DuPont Identity, and any other ratios you feel are relevant a) Explain what contributed to the change in the TAT ratio. b) Explain what contributed to the change in the PM ratio. c) Explain what contributed to the change in the EM ratio. 3) Using all 3 years of data, how do you feel about the short-term liquidity of this company? Identify the specific ratios you are referring to in your analysis. Use at least two ratios. 4) Using all 3 years of data, how do you feel about the long-term liquidity of this company? Identify the specific ratios you are referring to in your analysis. Use at least two ratios. Page 2 of 3 FIN2221 - Business Finance Spring 2020 5) Purrfect Pet Supplies is operating at a 100% fixed asset capacity, meaning any increase in sales would require an increase in fixed assets. If Sunrise was operating at 80% FA capacity in 2019, would the company have needed to increase Fixed Assets in 2020'? Why or why not? 6) Management made several assumptions in the 2020' projection. Share your thoughts on any strengths or weaknesses in these assumptions as used to build the proforma financial statements for 2020. Include at least two strengths or weaknesses. 7) You are a potential investor (shareholder). Would you invest in this company? Refer to specific ratio calculations in your answer here. Use at least three ratios. 8) Briefly, what additional information, if any, would you say would allow for a more complete financial analysis of Purrfect Pet Supplies? A B D E 3 4 un 6 7 2018 2019 2020 399,351.00 475,171.00 546,446.65 262,924.00 344,241.00 395,877.15 31,610.00 38,815.00 44,637.25 40,432.00 59,925.00 59,925.00 64,385.00 32,190.00 46,007.25 8,895.00 11,120.00 11,120.00 55,490.00 21,070.00 34,887.25 16,647.00 6,321.00 11,861.67 38,843.00 14,749.00 23,025.59 Sales Cost of goods sold Operating expenses Depreciation EBIT Interest Expense EBT Taxes Expense Net Income 2020 546,446.65 395,877.15 44,637.25 59,925.00 46,00 7.25 11,120.00 34,887.25 11,861.67 23,025.59 8 9 10 11 12 13 14 15 Dividends paid Add to RE 11,650.00 27,193.00 12,650.00 2,099.00 20,669.73 2,355.86 20,669.73 2,355.86 16 B D E G H Balance Sheet 2018 2019 2020 2018 2019 2020 2020 Current Assets: Cash Accounts Receivable Inventory Total current assets 10,619.00 37,810.00 25,437,00 73,866.00 20,055.00 53,725.00 65,798.00 139,578,00 23,063.25 61,783.75 75,667.70 160,514.70 39,023.00 28,349.00 67,372.00 40, 107.00 74,213.00 114,320.00 46,123.05 74,213.00 120,336,05 46,123.05 74,213.00 120,336,05 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 2020 Current Liabilities: 23,063.25 Accounts payable 61,783.75 Notes payable 75,667.70 Total current liabilities 160,514.70 Long-term debt 226,835.20 Equity Common Shares Retained Earnings Total equity 105,042,00 137,491.00 137,491.00 179,642.99 Net Fixed Assets 181,464.00 197,248.00 226,835.20 44,850.00 38,066,00 82,916,00 44,850.00 40,165.00 85,015.00 44,850.00 42,520.86 87,370.86 44,850.00 42.520.86 87,370.86 Total Assets 255,330,00 336,826.00 387,349.90 255,330,00 336,826.00 387,349.90 387,349.90 Total Liab & Equity EFN 345,197.91 42,151.99 35 PART 2 - Analysis 1) Prove that the DuPont Identity is working. Calculate ROE using this identity for all 3 years and show that it matches to your earlier calculation of ROE. 2) Analyze the projected ROE for this company using all 3 years of data, all components of the DuPont Identity, and any other ratios you feel are relevant a) Explain what contributed to the change in the TAT ratio. b) Explain what contributed to the change in the PM ratio. c) Explain what contributed to the change in the EM ratio. 3) Using all 3 years of data, how do you feel about the short-term liquidity of this company? Identify the specific ratios you are referring to in your analysis. Use at least two ratios. 4) Using all 3 years of data, how do you feel about the long-term liquidity of this company? Identify the specific ratios you are referring to in your analysis. Use at least two ratios. Page 2 of 3 FIN2221 - Business Finance Spring 2020 5) Purrfect Pet Supplies is operating at a 100% fixed asset capacity, meaning any increase in sales would require an increase in fixed assets. If Sunrise was operating at 80% FA capacity in 2019, would the company have needed to increase Fixed Assets in 2020'? Why or why not? 6) Management made several assumptions in the 2020' projection. Share your thoughts on any strengths or weaknesses in these assumptions as used to build the proforma financial statements for 2020. Include at least two strengths or weaknesses. 7) You are a potential investor (shareholder). Would you invest in this company? Refer to specific ratio calculations in your answer here. Use at least three ratios. 8) Briefly, what additional information, if any, would you say would allow for a more complete financial analysis of Purrfect Pet Supplies