As a fixed income analyst at Blackstone, your managing director has asked you to complete the ratio analysis shown below for Outdoor Outfitters (00) and a comparable company ("the comp" American Outdoor Brands). Because their markets include year-round sports and hobbies, these companies are virtually non-seasonal. Financial Statements for OO are provided below the incomplete ratio analysis. Use the financial statements to fill in the missing ratios. Use the ratio analysis to answer the remaining questions based on these companies. OutdoorOutfitters 00 Ratio Analysis for Q1 Ending: Q3 Q2 Q1 3/31/20X1 TTM Q8 Q7 Q6 Q5 Q4 300.000 150.000 308.985 154 104 320.502 157 289 327.651 163.291 335.092 169.742 348.399 176.479 361.920 183.285 369.915 189.232 1,415.326 718.738 Sales (SMM) Comps Sales Sales Growth (Q on Q except TTM) Comps Sales Growth 3.00% 2.74% 3.73% 2.07% 2.23% 3.82% 2.27% 3.95% 3.97% 3.9796 3.88% 3.86% 2.21% 3.24% 12.58% 15.06% Profit Margin Comps Profit Margin 4.73% 13.50% 4.76% 13.86% 4.73% 13.38% 4.26% 14.11% 4.27% 14.63% 4.97% 14.66% 5.24% 14.81% 4.77% 15.38% 1 14.88% COGS Margin=COGS/Sales (%) Comps COGS Margin 30.00% 33.33% 29.74% 33.34% 29.53% 33.71% 29.85% 33.33% 30.07% 32.77% 29.87% 32.65% 29.90% 32.36% 30.24% 32.56% 30.02% 32.58% Tax Rate Tax Expense/EBT (%) Comps Tax Rate 32.42% 32.03% 31,65% 30.99% 34.96% 30.58% 34.85% 30.05% 30.70% 31.35% 32.99% 33.15% 33.64% 34.51% 31.47% 32. 20% 32.31% 32.84% Asset Efficiency Ratio - Sales/Assets/bop) Comps AER 0.82 0.84 0.83 0.63 0.83 0.63 0.82 0.64 0.83 0.64 0.84 0.65 0.83 0.66 0.86 0.67 Return on Assets (ROA) Comps ROA 3.92% 8.81% 3.93% 8.41% 3.53% 8.90% 3.49% 9.32% 4.40% 9.67% 3.96% 10.11% 4.18% 10.04% 9.45% Return on Equity (ROE) Comps ROE 98.03% 21.35% 93.76% 20.39% 78.65% 21.23% 66.64% 22.02% 95.14% 22.43% 118.26% 23.32% 2 24.28% 79.42% 23.72% Accounts Receivable Turnover (AR-T) Comps AR-T 0.83% 3.33% 0.839 3.37% 0.82% 3.41% 0.83% 3.38% 0.84% 3.36% 0.83% 3.33% 0.82% 3.27% 0.82% 3.28% 3 3.45% AP-T = AP(eop) COGS % Comps AP-T 5.58% 5.00% 5.58% 4.98% 5.48% 5.56% 5.01% 5.51% 5.06% 5.49% 5.07% 5.49% 5.03% 5.09% 5.47% 4.95% 5.76% 5.21% Debt to Capital (DTC) Comps DIC 95 59% 56.04% 95.37% 56.03% 95.06% 55.32% 94 22% 54.91% 95.23% 55. 11% 95.89% 55.81% 94.779 55.64% 4 55.38% 95.15% 55.38% COTIDICOIT 27 COD 4 ER 5 nal Income Statement (SMM UON) Revenues COGS Depreciation SGA INT Other Expenses/(Income) Pretax Income Tax After Tax Expenses/Income) Net Income Q8 300.000 90.000 100.000 40.000 39.0 10.000 21.000 6.807 0.000 14.193 Q7 308.985 91.900 103.417 41.211 40.555 10.387 21.515 6.810 0.000 14.705 Q6 320.502 94.651 107.477 42.236 42.149 10.684 23.305 8.148 0.000 15.156 Q5 327.651 97.788 110.501 43.556 43.295 11.063 21.448 7.475 0.000 13.973 Q4 335.092 100.772 113.064 44.449 44.733 11.415 20.659 6.341 0.000 14.318 Q3 348.399 104.066 115.475 45.569 45.768 11.671 25.851 8.528 0.000 17.323 Q2 361.920 108.200 118.672 47.025 47.455 11.988 28.581 9.613 0.000 18.968 01 369.915 111.850 123.114 48.154 48.675 12.368 25.754 8.105 0.000 17.649 oo TTM 1,415 326 424 887 470.324 185.198 186.630 47.442 100.845 32.587 0.000 68.257 Additions to Equity NI + Paid in Capital (PIC) Dividends = Delta Equity Check: Delta Equity from BS's 14.193 0.000 0.000 14.193 14.705 0.000 -10.044 4.661 4.661 15.156 0.000 -8.754 6.403 6.403 13.973 0.905 0.000 14.878 14.878 14.318 0.000 -27.432 -13.114 -13.114 17.323 0.000 -25.996 -8.673 -8.673 18.968 1.316 0.000 20.284 20.284 17.649 0.000 -21.433 -3.784 -3.784 68.257 1.316 -74.861 -5.287 -5.287 PPE Roll Forward Net PPE BOP + CAPX Deprec = Net PPE EOP NA 1,000.000 1,026.747 1,056.499 1,093.352 1,124.077 1,149.077 1,189.986 110.000 130.165 137.229 147.354 143.789 140.475 159.581 155.325 -100.000 -103.417 -107.477 -110.501 -113.064 -115.475 -118.672 -123.114 1,000.000 1,026.747 1,056.499 1,093.352 1,124.077 1,149.077 1,189.986 1,222.198 1,093.352 599.170 -470.324 1,222.198 Cash Flow Statement ($MM UON) Cash Flow (Ops) NI Dprec Other Operating Flows CF Ops Q8 14.193 100.000 4.161 118.353 Q7 14.705 103.417 3.850 121.972 Q6 15.156 107.477 1.609 124.242 Q5 13.973 110.501 5.114 129.588 Q4 14.318 113,064 1.295 128.677 Q3 17.323 115.475 4.963 137.761 Q2 18.968 118.672 6.849 144.489 Q1 17.649 123.114 1.599 142.362 00 TTM 68.257 470.324 14.707 553.288 Cash Flow (Inv) CAPX Other Investing Flows CF Inv Q8 -110,000 0.000 -110.000 Q7 -130.165 0.000 -130.165 Q6 -137.229 0.000 -137.229 Q5 -147.354 0.000 -147.354 Q4 -143.789 0.000 -143.789 Q3 -140.475 0.000 -140.475 Q2 -159.581 0.000 -159.581 Q1 -155.325 0.000 -155.325 TTM -599.170 0.000 -599.170 Q6 Cash Flow (Fin) Dividends Paid in Capital (PIC) Other Financing Flows CF Fin Q8 0.000 0.000 0.000 0.000 Q7 -10.044 0.000 15.311 15.311 -8.754 0.000 -4.503 17.489 Q5 0.000 0.905 -7.127 24.892 Q4 -27.432 0.000 -4.971 20.083 Q3 -25.996 0.000 -5.949 8.663 Q2 0.000 1.316 -8.026 23.118 Q1 -21.433 0.000 -8.673 21.636 TTM -74.861 1.316 -27.618 73.500 12 19 Which company or companies can comfortably pay their interest obligations from the fruits of their day-to-day business operations? How do you justify your answer? Choose one or more companies and one justification. Just 00 By inspecting interest rates. By inspecting debt to capital ratios. By guessing By inspecting Debt to Ebit ratios. Just the Comp Both companies By inspecting fixed coverage ratios. D 13 19 Looking forward for about a year, which company has the best liquidity? Which ratio did you use to determine this? Choose one company and one ratio. Ebitda sustainability ratio Fixed Coverage Ratio Current Ratio Debt to Capitalization Ratio OO The Comp Interest Rate 14 1 * What is Ratio 5? 15 15 During the past year, on average, which firm enjoyed the most profit per dollar of assets? The Comp 16 15 Which firm has the higher operating leverage? Pick one firm and the ratio you used to determine your answer. SDIC Fixed Coverage Ratio The comp AR-T Debt to Capital Debt to Ebit 17 15 What is Ratio 4? D 18 15 Which firm has the most financial leverage? Which of the given ratios could you use to determine this? Choose one firm and one ratio. Working Capital Ratio Asset Efficiency Ratio SDIC 00 Profit Margin Debt to Capital The Comp 19 1 What is Ratio 3? 20 1 What is Ratio 1? 21 15 Which firm handles its AR best? What demonstrates this? Choose one company and one explaination. 00 It has the larger AR-T ratio It is growing sales fastest. It has the smaller AR-T ratio U It has the lowers ROE It has the highest ROE It has the highest COGS margin The Comp It has the lowest COGS margin 22 1 What is Ratio 2? As a fixed income analyst at Blackstone, your managing director has asked you to complete the ratio analysis shown below for Outdoor Outfitters (00) and a comparable company ("the comp" American Outdoor Brands). Because their markets include year-round sports and hobbies, these companies are virtually non-seasonal. Financial Statements for OO are provided below the incomplete ratio analysis. Use the financial statements to fill in the missing ratios. Use the ratio analysis to answer the remaining questions based on these companies. OutdoorOutfitters 00 Ratio Analysis for Q1 Ending: Q3 Q2 Q1 3/31/20X1 TTM Q8 Q7 Q6 Q5 Q4 300.000 150.000 308.985 154 104 320.502 157 289 327.651 163.291 335.092 169.742 348.399 176.479 361.920 183.285 369.915 189.232 1,415.326 718.738 Sales (SMM) Comps Sales Sales Growth (Q on Q except TTM) Comps Sales Growth 3.00% 2.74% 3.73% 2.07% 2.23% 3.82% 2.27% 3.95% 3.97% 3.9796 3.88% 3.86% 2.21% 3.24% 12.58% 15.06% Profit Margin Comps Profit Margin 4.73% 13.50% 4.76% 13.86% 4.73% 13.38% 4.26% 14.11% 4.27% 14.63% 4.97% 14.66% 5.24% 14.81% 4.77% 15.38% 1 14.88% COGS Margin=COGS/Sales (%) Comps COGS Margin 30.00% 33.33% 29.74% 33.34% 29.53% 33.71% 29.85% 33.33% 30.07% 32.77% 29.87% 32.65% 29.90% 32.36% 30.24% 32.56% 30.02% 32.58% Tax Rate Tax Expense/EBT (%) Comps Tax Rate 32.42% 32.03% 31,65% 30.99% 34.96% 30.58% 34.85% 30.05% 30.70% 31.35% 32.99% 33.15% 33.64% 34.51% 31.47% 32. 20% 32.31% 32.84% Asset Efficiency Ratio - Sales/Assets/bop) Comps AER 0.82 0.84 0.83 0.63 0.83 0.63 0.82 0.64 0.83 0.64 0.84 0.65 0.83 0.66 0.86 0.67 Return on Assets (ROA) Comps ROA 3.92% 8.81% 3.93% 8.41% 3.53% 8.90% 3.49% 9.32% 4.40% 9.67% 3.96% 10.11% 4.18% 10.04% 9.45% Return on Equity (ROE) Comps ROE 98.03% 21.35% 93.76% 20.39% 78.65% 21.23% 66.64% 22.02% 95.14% 22.43% 118.26% 23.32% 2 24.28% 79.42% 23.72% Accounts Receivable Turnover (AR-T) Comps AR-T 0.83% 3.33% 0.839 3.37% 0.82% 3.41% 0.83% 3.38% 0.84% 3.36% 0.83% 3.33% 0.82% 3.27% 0.82% 3.28% 3 3.45% AP-T = AP(eop) COGS % Comps AP-T 5.58% 5.00% 5.58% 4.98% 5.48% 5.56% 5.01% 5.51% 5.06% 5.49% 5.07% 5.49% 5.03% 5.09% 5.47% 4.95% 5.76% 5.21% Debt to Capital (DTC) Comps DIC 95 59% 56.04% 95.37% 56.03% 95.06% 55.32% 94 22% 54.91% 95.23% 55. 11% 95.89% 55.81% 94.779 55.64% 4 55.38% 95.15% 55.38% COTIDICOIT 27 COD 4 ER 5 nal Income Statement (SMM UON) Revenues COGS Depreciation SGA INT Other Expenses/(Income) Pretax Income Tax After Tax Expenses/Income) Net Income Q8 300.000 90.000 100.000 40.000 39.0 10.000 21.000 6.807 0.000 14.193 Q7 308.985 91.900 103.417 41.211 40.555 10.387 21.515 6.810 0.000 14.705 Q6 320.502 94.651 107.477 42.236 42.149 10.684 23.305 8.148 0.000 15.156 Q5 327.651 97.788 110.501 43.556 43.295 11.063 21.448 7.475 0.000 13.973 Q4 335.092 100.772 113.064 44.449 44.733 11.415 20.659 6.341 0.000 14.318 Q3 348.399 104.066 115.475 45.569 45.768 11.671 25.851 8.528 0.000 17.323 Q2 361.920 108.200 118.672 47.025 47.455 11.988 28.581 9.613 0.000 18.968 01 369.915 111.850 123.114 48.154 48.675 12.368 25.754 8.105 0.000 17.649 oo TTM 1,415 326 424 887 470.324 185.198 186.630 47.442 100.845 32.587 0.000 68.257 Additions to Equity NI + Paid in Capital (PIC) Dividends = Delta Equity Check: Delta Equity from BS's 14.193 0.000 0.000 14.193 14.705 0.000 -10.044 4.661 4.661 15.156 0.000 -8.754 6.403 6.403 13.973 0.905 0.000 14.878 14.878 14.318 0.000 -27.432 -13.114 -13.114 17.323 0.000 -25.996 -8.673 -8.673 18.968 1.316 0.000 20.284 20.284 17.649 0.000 -21.433 -3.784 -3.784 68.257 1.316 -74.861 -5.287 -5.287 PPE Roll Forward Net PPE BOP + CAPX Deprec = Net PPE EOP NA 1,000.000 1,026.747 1,056.499 1,093.352 1,124.077 1,149.077 1,189.986 110.000 130.165 137.229 147.354 143.789 140.475 159.581 155.325 -100.000 -103.417 -107.477 -110.501 -113.064 -115.475 -118.672 -123.114 1,000.000 1,026.747 1,056.499 1,093.352 1,124.077 1,149.077 1,189.986 1,222.198 1,093.352 599.170 -470.324 1,222.198 Cash Flow Statement ($MM UON) Cash Flow (Ops) NI Dprec Other Operating Flows CF Ops Q8 14.193 100.000 4.161 118.353 Q7 14.705 103.417 3.850 121.972 Q6 15.156 107.477 1.609 124.242 Q5 13.973 110.501 5.114 129.588 Q4 14.318 113,064 1.295 128.677 Q3 17.323 115.475 4.963 137.761 Q2 18.968 118.672 6.849 144.489 Q1 17.649 123.114 1.599 142.362 00 TTM 68.257 470.324 14.707 553.288 Cash Flow (Inv) CAPX Other Investing Flows CF Inv Q8 -110,000 0.000 -110.000 Q7 -130.165 0.000 -130.165 Q6 -137.229 0.000 -137.229 Q5 -147.354 0.000 -147.354 Q4 -143.789 0.000 -143.789 Q3 -140.475 0.000 -140.475 Q2 -159.581 0.000 -159.581 Q1 -155.325 0.000 -155.325 TTM -599.170 0.000 -599.170 Q6 Cash Flow (Fin) Dividends Paid in Capital (PIC) Other Financing Flows CF Fin Q8 0.000 0.000 0.000 0.000 Q7 -10.044 0.000 15.311 15.311 -8.754 0.000 -4.503 17.489 Q5 0.000 0.905 -7.127 24.892 Q4 -27.432 0.000 -4.971 20.083 Q3 -25.996 0.000 -5.949 8.663 Q2 0.000 1.316 -8.026 23.118 Q1 -21.433 0.000 -8.673 21.636 TTM -74.861 1.316 -27.618 73.500 12 19 Which company or companies can comfortably pay their interest obligations from the fruits of their day-to-day business operations? How do you justify your answer? Choose one or more companies and one justification. Just 00 By inspecting interest rates. By inspecting debt to capital ratios. By guessing By inspecting Debt to Ebit ratios. Just the Comp Both companies By inspecting fixed coverage ratios. D 13 19 Looking forward for about a year, which company has the best liquidity? Which ratio did you use to determine this? Choose one company and one ratio. Ebitda sustainability ratio Fixed Coverage Ratio Current Ratio Debt to Capitalization Ratio OO The Comp Interest Rate 14 1 * What is Ratio 5? 15 15 During the past year, on average, which firm enjoyed the most profit per dollar of assets? The Comp 16 15 Which firm has the higher operating leverage? Pick one firm and the ratio you used to determine your answer. SDIC Fixed Coverage Ratio The comp AR-T Debt to Capital Debt to Ebit 17 15 What is Ratio 4? D 18 15 Which firm has the most financial leverage? Which of the given ratios could you use to determine this? Choose one firm and one ratio. Working Capital Ratio Asset Efficiency Ratio SDIC 00 Profit Margin Debt to Capital The Comp 19 1 What is Ratio 3? 20 1 What is Ratio 1? 21 15 Which firm handles its AR best? What demonstrates this? Choose one company and one explaination. 00 It has the larger AR-T ratio It is growing sales fastest. It has the smaller AR-T ratio U It has the lowers ROE It has the highest ROE It has the highest COGS margin The Comp It has the lowest COGS margin 22 1 What is Ratio 2