A) calculate the firms 2012 financial ratios, and then complete the ratio table

B) analyze the firms current financial position from both a cross-sectional and a time-series viewpoint. Break your analysis into an evaluation of the firms liquidity, activity, leverage, and profitability. use a common-size analysis for profitability. based on your analysis of all the data available, provide a detailed discussion of the firms overall financial position. in your discussion, be sure to comment on the company's financial strengths and weaknesses. provide your analysis in five sections: one for each of the four categories of ratios, and one for an overall evaluation

A) use the historic and projected financial data provided to prepare a pro forma income statement and balance sheet for the year ended December 31,2013

B) will Budda-Bing manufacturing company need to obtain external financing to fund construction of the proposed facility? explain. prepare a statement of EFR

C) how would you recommend Budda-Bing raise the required financing? what options might be available if the company wanted to explore all opportunities other than using their line of credit?

ACC-933 Financial Management Assignment The\tBudda-Bing\tManufacturing\tCompany Fine Print: Individual Submission Submit by Drop box and clearly indicate name of student on the Cover page. Presentation is important, make sure it flows and is easy to follow; Show all calculations. ACC-933 Assignment 1 The Budda-Bing Manufacturing Company Page 1 of 6 The Budda-Bing Manufacturing Company Current Financial Position Analysis Part A: Tony Soprano and Pauli Walnuts, experienced budget analysts at The Budda-Bing Manufacturing Company, have been charged with assessing the firm's financial performance during 2012 and its financial position at year-end 2012. To complete this assignment, they gathered the firm's 2012 financial statements, shown below. In addition, Tony and Pauli obtained the firm's ratio values for 2010 and 2011, along with the 2012 industry average ratios (also applicable to 2010 and 2011). These are presented in the \"Historical Ratios\" table, below. Required Part A: a. Calculate the firm's 2012 financial ratios, and then complete the ratio table. b. Analyze the firm's current financial position from both a crosssectional and a time-series viewpoint. Break your analysis into an evaluation of the firm's liquidity, activity, leverage, and profitability. Use a common-size analysis for profitability. Based on your analysis of all the data available, provide a detailed discussion of the firm's overall financial position. In your discussion, be sure to comment on the company's financial strengths and weaknesses. Provide your analysis in five sections: one for each of the four categories of ratios, and one for an overall evaluation. ACC-933 Assignment 1 The Budda-Bing Manufacturing Company Page 2 of 6 Balance Sheet The Budda-Bing Manufacturing Company As at December 31st, 2011 and 2012 December\t31 Current\tAssets Cash Accounts\tReceivable Inventories Total\tCurrent\tAssets Gross\tfixed\tassets\t(at\tcost) Less:\tAccumulated\tAmortization Net\tfixed\tassets Total\tassets Liabilities\tand\tShareholders\tEquity Current\tLiabilities Accounts\tPayable Line\tof\tcredit Accruals Total\tCurrent\tLiabilities Long-term\tdebt Total\tLiabilities $ 400,500 370,000 100,902 871,402 700,000 1,571,402 $ 230,000 311,000 75,000 616,000 1,165,250 1,781,250 50,000 293,750 980,000 1,323,750 50,000 293,750 1,000,000 1,343,750 Assets Shareholders\tEquity Preferred\tShares Common\tShares Retained\tEarnings Total\tShareholders\tEquity Total\tLiabilities\tand\tShareholders Equity 2011 $ $ 24,100 25,000 763,900 805,556 763,445 700,625 1,551,445 1,531,181 1,691,707 2,093,819 348,000 500,000 1,343,707 1,593,819 $2,895,152 $3,125,000 2012 $2,895,152 $3,125,000 ACC-933 Assignment 1 The Budda-Bing Manufacturing Company Page 3 of 6 Income\tStatement The\tBudda-Bing\tManufacturing Company For\tthe\tYear\tended\tDecember\t31, 2012 Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses Selling expense General and administrative expenses Amortization Expense Total operating expense Operating Earnings (EBIT) Less: Interest expense Earnings before taxes Less: Taxes (rate = 40%) Net income after taxes $5,075,000 3,704,000 1,371,000 $650,000 416,000 152,000 1,218,000 153,000 93,000 60,000 24,000 $36,000 Historical Ratios The Budda-Bing Manufacturing Company Ratio Current\tratio Quick\tRatio Average\tage\tof\tinventory Average\tCollection\tperiod Total\tAsset\tturnover\t(times) Debt\tratio Times\tinterest\tearned\tratio Gross\tmargin Profit\tmargin Return\ton\ttotal\tassets\t(ROA) Return\ton\tEquity\t(ROE) Actual 2010 Actual 2011 1.7 1.8 1.0 0.9 70.2days 73\tdays 50\tdays 55\tdays 1.5 1.5 45.8% 54.3% 2.2 1.9 27.5% 28.0% 1.1% 1.0% 1.7% 1.5% 3.1% 3.3% ACC-933 Assignment 1 The Budda-Bing Manufacturing Company Actual 2012 Industry Average 2012 1.5 1.2 35.8days 46\tdays 2.0 24.5% 2.5 26.0% 1.2% 2.4% 3.2% Page 4 of 6 Part B: The\tBudda-Bing\tManufacturing\tCompany Preparing\tPro\tForma\tFinancial\tStatements\tfor\t2013 Budda-Bing Manufacturing is planning to implement a major plant-modernization program to improve its competitive position. Included will be construction of a state-ofthe-art manufacturing facility that will cost $400,000 in 2013 and is expected to lower the company's variable cost per tonne of steel. Tony and Pauli, experienced budget analysts, have been charged with preparing a forecast of the firm's 2013 financial position assuming construction of the proposed new facility. They plan to use the 2012 financial statements presented above along with the forecasts for other financial accounts provided in the following table. Key Projected Financial Data (2013) The Budda-Bing Manufacturing Company Data\tItem Sales Cost\tof\tgoods\tsold Selling\tExpense General\tand\tadministrative\texpense Accumulated\tAmortization Interest\texpense Tax\trate Dividend\tpayments Average\tage\tof\tinventory Average\tcollection\tperiod Average\tpayment\tperiod Accruals Long-term\tdebt,\tpreferred\tshares,\tand common\tshares: Value Increase\tto\t$6,500,000 Remain\tthe\tsame\t%age\tof\tsales Increase\tby\t22% Increase\tby\t37.5% Increase\tto\t$685,000 Increase\tto\t$97,000 40% $20,000 56\tdays 52\tdays 26\tdays Increase\tto\t$96,000 Remain\tthe\tsame ACC-933 Assignment 1 The Budda-Bing Manufacturing Company Page 5 of 6 Required Part B: a. Use the historic and projected financial data provided to prepare a pro forma income statement and balance sheet for the year ended December 31, 2013. b. Will Budda-Bing Manufacturing Company need to obtain external financing to fund construction of the proposed facility? Explain. Prepare a Statement of EFR. c. How would you recommend Budda-Bing raise the required Financing? What options might be available if the company wanted to explore all opportunities other than using their line of credit? ACC-933 Assignment 1 The Budda-Bing Manufacturing Company Page 6 of 6