Assignment #1 Instructions: You are allowed to work in groups for this assignment. Each group could contain up to 3 or 4 members. If you choose to work in a group, please include the names of your group members in the first page of your submission document(s). Each group will turn in one set of documents, which includes a document with the answers, and any supplementary excel file with all the analysis. Recall that late submission will not be allowed. problem sets must be submitted by the duc date indicated on Moodle. Make sure to show your work: do not merely give a solution without adequate explanations and intermediate steps necessary to obtain the results. You will be graded not only on the basis of the accuracy of your results, but also on the clarity and completeness of your written solution. Your answers to the questions below should be typed using a word processor or an excel file. Points would be deducted if the final submission documents are not properly formatted and/or labeled You are not allowed to discuss this assignment with other groups. A strict penalty will be enforced for violations. I will not be helping you with solving the assignment or comment on the correctness of your solution before it is turned in. I will of course be more than happy to answer any clarification questions that you might have. Download the spreadsheet "Assignment1_Data" from Moodle. The data contains (partial) information for Grizzly Bear Muffin Company's balance sheet and income statement. Complete the balance sheet and income statement, and then answer the following questions. 1. Calculate the number of shares outstanding for the company and the market price per share at the end of 2020. 2. Calculate the cash flow from operations, net capital spending, and the change in NWC to calculate the cash flow from assets. Then, calculate the cash flow to creditors and cash flow to shareholders to calculate the cash flow from assets from the "uses" side and confirm that the cash-flow identity is satisfied. 3. Use information from the balance sheet and income statement to calculate the following financial ratios and the market value added (MVA). Whenever balance sheet numbers are used to calculate financial ratios, please ensure that you use the average of the 2019 and 2020 numbers in your calculation. To calculate MVA, you can assume that 1 the average book value number for common stock and paid-in-surplus is the amount that the shareholders initially invested in the company. Short-term Solvency Ratios Current Ratio Quick Ratio NWC to total assets Asset Utilization Ratios Days' sales in inventory Receivables Turnover Long-term Solvency Ratios Equity Multiplier Cash Coverage Ratio Profitability Ratios Profit Margin Return on equity Market Value Ratios Market-to-book ratio Market Value Added ($M) Ba Assets ($M) 2019 2020 Current Assets Cash Accounts Receivable Inventory Total Current Assets 5,290 ? 5,586 ? 5,822 3,656 ? 15,995 Fixed Assets Net Plant and Equipment 71,433 ? Total Assets ? $95,664 GRIZZLY BEAR MUFFIN COMPANY Balance Sheet Liabilities & Shareholders' Equity ($M) 2019 2020 Current Liabilities Accounts Payable Notes Payable Other Current Liabilities Total Current Liabilities ? 3,168 3,055 ? 7,098 ? 4,088 13,886 Long Term Debt 19,000 ? Shareholders' Equity Common Stock & paid-in-surplus Accumulated Retained Earnings Total Shareholders Equity 9,000 44,704 ? 9,000 50,778 ? . Total Liabilities & Shareholders' Equity $85,047 ? Income Statement ($M) 2020 5 Sales Cost of goods sold Gross Profit Depreciation EBIT Interest Expense Taxable Income Taxes (35%) Net Income Dividends Retained Earnings $84,409 ? 26,191 7,410 ? ? 15,500 ? ? ? ? 3 EPS PE Ratio 4.03 14.5
