Asher, your newly appointed boss, has tasked you with evaluating the following financial data for Allied Biscuit Co. to determine how Allied Biscuit's value has changed over the past year. The investment firm for which you work will make a positive (or "buy recommendation to its investing clients if Allied Biscuit's value has increased over the past year, a neutral (or "hold") recommendation if the value has remained constant, or a negative (or "sell") recommendation if the value has decreased. He has recommended that you use saveral metrics to ascertain how the firm's value has changed, and he has provided you with the following income statement and balance sheet. Allied Biscuit Co. Income Statement January 1- December 31, Year 2 Allied Biscuit Co. Balance Sheet December 31, Year 2 Year 1 $7,750,000 6,355,000 Year 2 S8,912,500 7,130,000 1,782,500 311,938 1,470,562 267,375 1,203,187 81,275 $721,912 $433,147 $288,765 Assets: Year 2 $508,013 1,693,375S 2,963,406 5,164,794 3,302,081 $8,466,875 Year 1 $441,750 1,472,500 2,576,875 4,491,125 2,871,37!5 $7,362,500 Cash and cash equivalents Expenses EBITDA Inventory Depreciation and amortization expense 271,250 1,123,750 193,750 930,000 Current assets Net fixed assets Interest expense Total assets Liabilities and Equity: Accounts payable Tax expense (40%) Net income Common dividends Addition to retained earnings LExcludes depreciation and amortization $1,270,031 825,520 1,778,044 3,873,595 1,629,873 5,503,469 592,681 2,370,725 2,963,406 $1,104,375 717,844 1,546,125 3,368,344 1,417,281 4,785,625 515,375 2,061,500 2,576,875S $8,466,875 7,362,500 $558,000 $334,800 $223,200 Notes payable Total current liabilities Long-term debt Total liabilities Common stock ($1 par) Retained earnings Total equity Total debt and equity Shares outstanding Weighted average cost of capital 592,681 7.9B% 515,375 7.30% Asher, your newly appointed boss, has tasked you with evaluating the following financial data for Allied Biscuit Co. to determine how Allied Biscuit's value has changed over the past year. The investment firm for which you work will make a positive (or "buy recommendation to its investing clients if Allied Biscuit's value has increased over the past year, a neutral (or "hold") recommendation if the value has remained constant, or a negative (or "sell") recommendation if the value has decreased. He has recommended that you use saveral metrics to ascertain how the firm's value has changed, and he has provided you with the following income statement and balance sheet. Allied Biscuit Co. Income Statement January 1- December 31, Year 2 Allied Biscuit Co. Balance Sheet December 31, Year 2 Year 1 $7,750,000 6,355,000 Year 2 S8,912,500 7,130,000 1,782,500 311,938 1,470,562 267,375 1,203,187 81,275 $721,912 $433,147 $288,765 Assets: Year 2 $508,013 1,693,375S 2,963,406 5,164,794 3,302,081 $8,466,875 Year 1 $441,750 1,472,500 2,576,875 4,491,125 2,871,37!5 $7,362,500 Cash and cash equivalents Expenses EBITDA Inventory Depreciation and amortization expense 271,250 1,123,750 193,750 930,000 Current assets Net fixed assets Interest expense Total assets Liabilities and Equity: Accounts payable Tax expense (40%) Net income Common dividends Addition to retained earnings LExcludes depreciation and amortization $1,270,031 825,520 1,778,044 3,873,595 1,629,873 5,503,469 592,681 2,370,725 2,963,406 $1,104,375 717,844 1,546,125 3,368,344 1,417,281 4,785,625 515,375 2,061,500 2,576,875S $8,466,875 7,362,500 $558,000 $334,800 $223,200 Notes payable Total current liabilities Long-term debt Total liabilities Common stock ($1 par) Retained earnings Total equity Total debt and equity Shares outstanding Weighted average cost of capital 592,681 7.9B% 515,375 7.30%
