Question
A new mobile phone company went to market. The financials below are for the first six years of operations. Note that the emergency loans were
A new mobile phone company went to market. The financials below are for the first six years of operations. Note that the emergency loans were always paid the following year and did not accumulate.
Conduct an analysis that would go in a shareholder's report. Name the top 5 successes and challenges based on the data below.
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | |
| ROS | 0.62% | 2.25% | -1.60% | -9.03% | -3.74% | 12.91% |
| Asset Turnover | 0.83 | 0.94 | 1.05 | 0.86 | 1.07 | 1.32 |
| ROA | 0.51% | 2.12% | -1.69% | -7.73% | -3.98% | 17.08% |
| Leverage | 2.47 | 2.34 | 2.35 | 2.73 | 2.61 | 1.99 |
| ROE | 1.27% | 4.97% | -3.98% | -21.08% | -10.42% | 34.02% |
| Emergency Loans | $22,680,869 | $20,177,885 | $0 | $22,381,842 | $6,777,150 | $0 |
| Sales | $99,778,924 | $113,037,903 | $121,928,005 | $94,764,205 | $103,546,888 | $148,297,682 |
| Variable Costs | $72,062,788 | $78,680,156 | $79,202,955 | $68,464,085 | $67,439,283 | $90,823,747 |
| SGA | $9,059,753 | $12,970,248 | $15,616,565 | $23,326,469 | $18,250,661 | $15,184,339 |
| EBIT | $9,941,384 | $12,820,333 | $5,078,319 | ($3,790,324) | $2,024,838 | $36,723,929 |
| Profit | $616,416 | $2,542,103 | ($1,954,083) | ($8,558,857) | ($3,868,262) | $19,143,536 |
| Cumulative Profit | $4,804,924 | $7,347,026 | $5,392,944 | ($3,165,913) | ($7,034,175) | $12,109,361 |
| Stock Price | $20.05 | $19.89 | $24.18 | $1.00 | $1.00 | $44.14 |
| Market Capitalization | $40,103,651 | $39,791,924 | $48,378,235 | $2,000,499 | $2,400,499 | $105,966,779 |
| S&P Rating | CC | CC | CC | C | C | B |
| Working Capital | $5,291,590 | $9,460,360 | $48,282,944 | $19,478,063 | $15,376,357 | $33,161,028 |
| Days of Working Capital | 19.4 | 30.5 | 144.5 | 75 | 54.2 | 81.6 |
| Free Cash Flow | ($26,114,516) | $2,492,984 | $21,849,665 | ($23,473,622) | $6,523,693 | $48,511,071 |
| Plant and Equipment | $128,500,000 | $128,500,000 | $109,200,000 | $112,200,000 | $118,650,000 | $101,950,000 |
| Total Assets | $120,101,940 | $119,701,262 | $115,619,021 | $110,776,573 | $97,080,889 | $112,085,438 |
| Plant Utilization | 96.89% | 86.23% | 99.12% | 132.23% | 101.43% | 166.39% |
| Traditional Segment Share | 15.23% | 22.48% | 22.38% | 13.18% | 11.07% | 14.11% |
| Low End Segment Share | 15.20% | 14.42% | 15.56% | 19.45% | 19.46% | 25.68% |
| High End Segment Share | 12.96% | 6.46% | 5.10% | 0.48% | 0.00% | 5.70% |
| Performance Segment Share | 13.52% | 10.39% | 8.45% | 4.15% | 4.05% | 3.67% |
| Size Segment Share | 12.53% | 7.03% | 4.81% | 0.61% | 1.20% | 3.16% |
| Overall Market Share | 14.56% | 14.83% | 14.49% | 11.66% | 10.89% | 14.13% |
| Complement | 783 | 783 | 620 | 766 | 336 | 543 |
| Overtime | 0.00% | 0.00% | 0.00% | 0.00% | 0.08% | 0.19% |
| Turnover Rate | 10.00% | 10.00% | 7.00% | 6.90% | 6.54% | 6.48% |
| Productivity Index | 100.00% | 100.00% | 102.05% | 108.28% | 113.46% | 115.69% |
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Top 5 Successes 1 Sales Growth The company experienced consistent sales growth over the six years with a significant increase from 998 million in Year ...
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Financial Reporting Financial Statement Analysis And Valuation A Strategic Perspective
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
9th Edition
1337614689, 1337614688, 9781337668262, 978-1337614689
