Note the statements include some historical balances when Midwest Shocks was owned by AfterM. They also include the performance/position from the past two years as a standalone entity. Lastly, the financials include managements forecast for the coming year. As you review the statements and consider the strategy the Midwest Shocks Management/Ownership team is implementing, give thought to:
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In each of five focus areas (liquidity, profitability, ), provide your view/thoughts/analysis of Midwest Shocks HISTORICAL performance.
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Create a list with the numbers 1, 2, and 3. In order of priority (#1 being the highest), rank the three greatest concerns (not necessarily focus areas and not necessarily individual ratios) you have about the HISTORICAL performance. Your rankings are not necessarily entire focus areas (e.g., not all of the profitability, but maybe one aspect of it) and should not necessarily be a ratio either. Briefly explain your thoughts.
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Do the same as what you did in #3 above, except do it now for the one-year forecast period.
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Use your answer in #4 (forecast concerns) to create your own forecast. In Excel, create a new, one-year forecast (balance sheet, income statement, and statement of cash flows) that combines the companys forecast with your concerns in #4 to reflect your adjusted forecast. Use Excel so that this is a mathematical exercise where your income statement adds/subtracts correctly, your balance sheet balances, and the statement of cash flows sums to the actual change in cash on the balance sheet.
Midwest Shocks Consolidated Balance Sheet Actual 12/31/2017 Group Forecast 12/31/2020 Management Assumptions Group Assumptions Plug 45.75 doh 144.54 doh - 100% growth (S in COO) Assets Cash AR Net Inventory Other Current Assets Total Current Assets Land and improvements Buildings Equipment Accum. Depreciation PP&E .Net Intangibles Other LIT Assets Total Non-Current Assets Total Assets Actual 12/31/2018 38,349 75,854 174,066 14,628 302,897 20,067 43,842 40,644 7,360 97,193 0 6,527 215,633 $14,530 518.500 Actual 12/31/2019 24,224 69,629 157,134 16,721 267.908 18,486 37,805 61,162 19,450 98,003 3,088 7.541 108,832 376,540 Management Forecast 12/30/2020 27.913 72,703 153,172 33,314 287,102 18,486 37,805 81,264 32,560 105,005 2,779 1,307 109,091 396,193 No additions No additions -33% growth Deprec. Schedule SIL Amort. Disposition 59.32 doh based on pay date no meaningful che From Tax Attorney Liabilities and Equity Accounts Payable Accrued Compensation Other Accrued Expenses Taxes Payable CMLTD TOTAL CURRENT LIABILITIES AEL - Revolving Loan Senior Debt (foreign) Senior Debt (1) Senior Debt (2) Other Long Term Liabilities Deferred Income Taxes 58,626 15,593 40,560 10,200 0 124,969 50,000 11,928 35,122 0 54,431 15,333 50,701 912 0 121,377 43,000 11,928 32,976 20,981 2,722 4,831 62,868 18,941 49,246 7,576 0 138,621 67,247 11,928 32,976 20,981 1,820 3.589 Plug No change No change No change No meaningful cha From Tax Attorney 2,537 TOTAL NON-CURRENT LIABS 104,021 116,438 138,541 0 TOTAL LIABILITIES 228.990 237,815 277,162 No change No change EQUITY Common Stock Additoninal Paid In Capital Retained Earnings Accum Other Comp. (Loss income Total Shareholder's Equity TOTAL LIABILITIES AND EQUITY Check 29 37,670 136,521 3,207 177,627 406,617 111.913.00 $ 38,232 103,242 (2.778) 138,725 376,540 29 38,232 83,548 12.778) 119,031 396,193 No change 0 Midwest Shocks Consolidated Income Statement (S in 000s) Actual 12/31/2018 474,831 Group Forecast 12/31/2020 Actual 12/31/2017 628,800 548,499 80,301 Group Assumpitions Management Assumptions 6.7% Growth 12.77% 356,435 118,396 24.93% 55,971 7,687 50,100 13,600 14,400 Net Sales Cost of Sales Gross Profit Gross Profit Margin SG&A Expense Depreciation Expense Restructuring Restructuring Management Management fees Total Operating Expenses Earnings Before Int. & Tax Interest Expense Interest Income Interest income Dividend on Preferred Stock FX Exchange Loss'Restructuring/Other Earnings Before Tax Significant improvement from Sales Force Growth Deprec. Schedule Misc. Nearly Complete Contractual Other expenses 19,764 3,976 87,398 30,998 12.500) 620 Actual Management Forecast 12/31/2019 12/30/2020 544,111 580,000 397,386 386,800 146,725 193,200 26.97% 26.97% 33.37% 33.31% 92.205 82,205 134.502 134,502 12 654 13.100 12.034 13,100 5 280 3.000 0.200 3,000 9.431 2.70 2.598 2,596 1.591 1.08 5.000 5,000 121.10 158.200 25.564 35.000 (4.620) (4.000) A57 0 (2,307) (1,500) 19.494 29,500 7,902 7,375 40.5% 11,532 22.125 0 11,592 (45,000) (40,000) 38,218 48,100 15,201 26.250 78,100 2.201 (2.100) 0 0 1,500 1,601 10,200 637.1% (8,599) 3.3% average rate Income Tax Expense Cross Border Benefits Effective Tax Rate 25.0% (1,099) (4.772) 23, 159 9.468 3,466 40.9% 40.87 13 691 10.08 147.220 160.911 (34.400) 38,685 18,325 Earnings Before Exo Item Bargain Purchase Gain Net Earnings Dividends - Common EBITDA NOPAT one-time event (8,599) 22,125 15,801 (11,822) Midwest Shocks Consolidated Statement of Cash Flows Actual 12/31/2017 Actual 2019 Group Forecast 12/31/2020 Management Assumptions Group Assumptions 11,592 12,654 143 0 (S in 200s) Operating Activities Net Income Depreciation Loss On Sale of PP&E Bargain Purchase Option Other Non-Cash Items Deferred Income Tax Misc. Accounts Receivable Inventories Prepaid Expenses and Other Accounts Payable and Accruals Income Taxes Payable Accrued Compensation Other Current Other Long-Term Assets/Liab CFFO Actual 2018 160.911 7,687 0 (147,220) 1,453 (901) 0 17,259 16,681 7,105 18,938 3,180 3,406 0 2.509 91,008 692 2.294 0 5,825 16,932 (1,893) 5,95 (9,288) (260) 0 (2.726) 41,921 Management Forecast 12/30/2020 22,125 13,100 0 0 D (1,242) 0 (2.874) 3,962 (16,593) 6,972 6,684 3,608 5,641 41,363 0 Investing Activities Capital Expenditures Proceeds From Sales of PP&E Other CFFIA (11.451) 6,785 (37,602) (42.268) (16,157) 2,550 (4,102) (17,709) (20,102) 0 0 (20,102) 24,247 0 0 0 Financing Activities ABL Revolver Senior Debt (foreign) Senior Debt #1 Serior Debt #2 Capital Contributions Dividends Repayment of Preferred Stock Other CFFFA Effect of Foreign Currency Exchange CHANGE IN CASH (31,000) 0 35,122 0 37,602 (34,400) (31,099) (418) (24,193) (1,119) 23,428 (7.000) 0 (2,146) 20,981 0 (45,000) 0 (3,433) (36,596) (1.739) (14,125) (40,000) 0 (1.819) (17,572) 3,689 Midwest Shocks Consolidated Balance Sheet Actual 12/31/2017 Group Forecast 12/31/2020 Management Assumptions Group Assumptions Plug 45.75 doh 144.54 doh - 100% growth (S in COO) Assets Cash AR Net Inventory Other Current Assets Total Current Assets Land and improvements Buildings Equipment Accum. Depreciation PP&E .Net Intangibles Other LIT Assets Total Non-Current Assets Total Assets Actual 12/31/2018 38,349 75,854 174,066 14,628 302,897 20,067 43,842 40,644 7,360 97,193 0 6,527 215,633 $14,530 518.500 Actual 12/31/2019 24,224 69,629 157,134 16,721 267.908 18,486 37,805 61,162 19,450 98,003 3,088 7.541 108,832 376,540 Management Forecast 12/30/2020 27.913 72,703 153,172 33,314 287,102 18,486 37,805 81,264 32,560 105,005 2,779 1,307 109,091 396,193 No additions No additions -33% growth Deprec. Schedule SIL Amort. Disposition 59.32 doh based on pay date no meaningful che From Tax Attorney Liabilities and Equity Accounts Payable Accrued Compensation Other Accrued Expenses Taxes Payable CMLTD TOTAL CURRENT LIABILITIES AEL - Revolving Loan Senior Debt (foreign) Senior Debt (1) Senior Debt (2) Other Long Term Liabilities Deferred Income Taxes 58,626 15,593 40,560 10,200 0 124,969 50,000 11,928 35,122 0 54,431 15,333 50,701 912 0 121,377 43,000 11,928 32,976 20,981 2,722 4,831 62,868 18,941 49,246 7,576 0 138,621 67,247 11,928 32,976 20,981 1,820 3.589 Plug No change No change No change No meaningful cha From Tax Attorney 2,537 TOTAL NON-CURRENT LIABS 104,021 116,438 138,541 0 TOTAL LIABILITIES 228.990 237,815 277,162 No change No change EQUITY Common Stock Additoninal Paid In Capital Retained Earnings Accum Other Comp. (Loss income Total Shareholder's Equity TOTAL LIABILITIES AND EQUITY Check 29 37,670 136,521 3,207 177,627 406,617 111.913.00 $ 38,232 103,242 (2.778) 138,725 376,540 29 38,232 83,548 12.778) 119,031 396,193 No change 0 Midwest Shocks Consolidated Income Statement (S in 000s) Actual 12/31/2018 474,831 Group Forecast 12/31/2020 Actual 12/31/2017 628,800 548,499 80,301 Group Assumpitions Management Assumptions 6.7% Growth 12.77% 356,435 118,396 24.93% 55,971 7,687 50,100 13,600 14,400 Net Sales Cost of Sales Gross Profit Gross Profit Margin SG&A Expense Depreciation Expense Restructuring Restructuring Management Management fees Total Operating Expenses Earnings Before Int. & Tax Interest Expense Interest Income Interest income Dividend on Preferred Stock FX Exchange Loss'Restructuring/Other Earnings Before Tax Significant improvement from Sales Force Growth Deprec. Schedule Misc. Nearly Complete Contractual Other expenses 19,764 3,976 87,398 30,998 12.500) 620 Actual Management Forecast 12/31/2019 12/30/2020 544,111 580,000 397,386 386,800 146,725 193,200 26.97% 26.97% 33.37% 33.31% 92.205 82,205 134.502 134,502 12 654 13.100 12.034 13,100 5 280 3.000 0.200 3,000 9.431 2.70 2.598 2,596 1.591 1.08 5.000 5,000 121.10 158.200 25.564 35.000 (4.620) (4.000) A57 0 (2,307) (1,500) 19.494 29,500 7,902 7,375 40.5% 11,532 22.125 0 11,592 (45,000) (40,000) 38,218 48,100 15,201 26.250 78,100 2.201 (2.100) 0 0 1,500 1,601 10,200 637.1% (8,599) 3.3% average rate Income Tax Expense Cross Border Benefits Effective Tax Rate 25.0% (1,099) (4.772) 23, 159 9.468 3,466 40.9% 40.87 13 691 10.08 147.220 160.911 (34.400) 38,685 18,325 Earnings Before Exo Item Bargain Purchase Gain Net Earnings Dividends - Common EBITDA NOPAT one-time event (8,599) 22,125 15,801 (11,822) Midwest Shocks Consolidated Statement of Cash Flows Actual 12/31/2017 Actual 2019 Group Forecast 12/31/2020 Management Assumptions Group Assumptions 11,592 12,654 143 0 (S in 200s) Operating Activities Net Income Depreciation Loss On Sale of PP&E Bargain Purchase Option Other Non-Cash Items Deferred Income Tax Misc. Accounts Receivable Inventories Prepaid Expenses and Other Accounts Payable and Accruals Income Taxes Payable Accrued Compensation Other Current Other Long-Term Assets/Liab CFFO Actual 2018 160.911 7,687 0 (147,220) 1,453 (901) 0 17,259 16,681 7,105 18,938 3,180 3,406 0 2.509 91,008 692 2.294 0 5,825 16,932 (1,893) 5,95 (9,288) (260) 0 (2.726) 41,921 Management Forecast 12/30/2020 22,125 13,100 0 0 D (1,242) 0 (2.874) 3,962 (16,593) 6,972 6,684 3,608 5,641 41,363 0 Investing Activities Capital Expenditures Proceeds From Sales of PP&E Other CFFIA (11.451) 6,785 (37,602) (42.268) (16,157) 2,550 (4,102) (17,709) (20,102) 0 0 (20,102) 24,247 0 0 0 Financing Activities ABL Revolver Senior Debt (foreign) Senior Debt #1 Serior Debt #2 Capital Contributions Dividends Repayment of Preferred Stock Other CFFFA Effect of Foreign Currency Exchange CHANGE IN CASH (31,000) 0 35,122 0 37,602 (34,400) (31,099) (418) (24,193) (1,119) 23,428 (7.000) 0 (2,146) 20,981 0 (45,000) 0 (3,433) (36,596) (1.739) (14,125) (40,000) 0 (1.819) (17,572) 3,689