BnB Caribbean Inc. (BnB) is a leading construction company founded in 2001 and is based in Jamaica. The company has within recent years been experiencing increases in revenues from its construction related services such as design, build, expansion and remodeling, and emergency services. Its main line of business is from the construction of roads and commercial buildings within Jamaica and to a lesser extent a few other Caribbean countries. Since the growth of the tourism sector in the Caribbean, BnB Caribbean has become concerned about the number of other construction companies which have entered the market to provide similar services around the Caribbean region. Business overseas contributes to 40% of the companys revenues, while the other 60% comes mainly from works done in the domestic market. The COVID-19 pandemic has caused a slowdown in overall operations leading to prolonged delays in delivery of raw materials from abroad. The CEO of the company is optimistic that there will be a turnaround in operations in 2021, and is therefore considering contracting a loan of $500.0 Million from its local bank to help rebuild its lead position in the market and to expand its line of business to include the sales of heavy equipment. The company has over the years relied mainly on issuing long-term bonds to finance its capital projects. As of today, the firm has 50.0 million shares of common stock outstanding. You are hired as the Chief Financial Controller of the company to advise the CEO and board of the company of the current financial health of the company and to assist them in determining whether they would be successful with the new loan.
DD Case Analysis_S2_20_2021 (1).pd X + o c File C:/Users/kimberly%20Arjoon/Desktop/MGMT2023-Financial%20Management/Case%20Analysis_S2_20_2021%... Q Not syncing e looking Glass Secur... PDF 70220038.pdf Other favorites 2 of 6 Q + ID Page view | A Read aloud | Draw Highlight Erase @ A BnB Construction Inc Balance Sheet Millions of dollars) 2021 2021 Assets 2020 2019 Liabilities 2020 2009 Est Est Cash and Cash 15 10 15 Accounts payable 115 60 30 Equivalents Short-Term investments 10 65 Overdrafts 115 110 60 Accounts Receivable 420 375 315 Accruals 260 140 130 Inventories 700 615 415 Total Current Liabilities 490 310 220 Total Current Assets 1.145 1,000 810 Long-Term Bonds and 1300 754 580 New Loan Net Plant and 1884 1.190 870 Equipment Total Debt 1790 1,064.00 800 Preferred Stock 40 40 40 Common Stock 130 130 130 Retained Earnings 1069 956 710 Total Common Equity 1199 1086 840 Total Assets $ $ Total Liabilities and $ $ $ 3,029 2,190 1,600 Equity 3,029 2,190 1,600 2021 Est. 2.SO Est. Estimate BnB Construction Inc. Income Statement Millions of dollars 2020 2019 Net Sales 4,000 3,000 Operating costs 3.100 2300 2.100 | EBITD 900.00 700 750 Depreciatio 110 100 90 Amortization 0 Depreciation and Amortization 110 100 90 | EBITD 200 290 600 660 Interest 100 88 60 Earnings Before Taxes 690 512 600 Taxes (40%) 276 204.8 240 Net Income Before preferred Dividends 414 302.2 360 Preferred Dividends 4 Net Income $ 410.0 S 303.2$ Common Dividends 57.5 57.5 53 Addition to retained Earnings $ 352.50 $ 245.70 $ $ 356.0 303.0 Per Share Date Common Stock Price 2021 $ 2020 28.0 5 2019 $ 23.00 26.00 Earnings Per Share (EPS) Dividend Per Share (OPS) Book Value Per Share (BPS) Cash Flow Per Share 772 7777 7777 7777 $ s $ $ 6.06 $ 1.15$ 21.72 $ 8.06S 7.12 106 16.80 892 SUGGESTED FORMAT FOR REPORT 1. Introduction (3-4 lines) 2. Analysis of Financial Data (Table with ratios) 2021 Ratio Analysis Est. Liquidity Ratios Current Ratio (times) Quick Ratio (times) Industry Average 2020 2019 4.2 2.1 9 9 Asset Management Ratios Average sales/day Inventory Turnover Ratio (times) Days Sales Outstanding (days) Fixed Assets Turnover Ratio (times) Total Asset Turnover Ratio 36 3 1.8 40 Debt Management Ratios Total Debt to Total Assets (%) Times Interest Earned (times) Debt to Equity Ratio (%) 6 1 Profitability Ratios Profit Margin on Sales (%) Earning Power (%) Return on Total Assets (%) Return on Common Equity (%) 8 17.2 12 25 Market Value Ratios Price/Earnings Ratio Price/Earnings Ratio (times) Price/Cash Flow Ratio (times) Market /Book Value Ratio (times) 12.5 6.8 1.7 3. Comments on Financial Performance and Financial Position a. Liquidity b. Profitability C. Leverage d. Asset Management e. Market Value 4. Chance of Success of Application of the Loan 5. Conclusion 6. References (1 page maximum, included calculated per share data) DD Case Analysis_S2_20_2021 (1).pd X + o c File C:/Users/kimberly%20Arjoon/Desktop/MGMT2023-Financial%20Management/Case%20Analysis_S2_20_2021%... Q Not syncing e looking Glass Secur... PDF 70220038.pdf Other favorites 2 of 6 Q + ID Page view | A Read aloud | Draw Highlight Erase @ A BnB Construction Inc Balance Sheet Millions of dollars) 2021 2021 Assets 2020 2019 Liabilities 2020 2009 Est Est Cash and Cash 15 10 15 Accounts payable 115 60 30 Equivalents Short-Term investments 10 65 Overdrafts 115 110 60 Accounts Receivable 420 375 315 Accruals 260 140 130 Inventories 700 615 415 Total Current Liabilities 490 310 220 Total Current Assets 1.145 1,000 810 Long-Term Bonds and 1300 754 580 New Loan Net Plant and 1884 1.190 870 Equipment Total Debt 1790 1,064.00 800 Preferred Stock 40 40 40 Common Stock 130 130 130 Retained Earnings 1069 956 710 Total Common Equity 1199 1086 840 Total Assets $ $ Total Liabilities and $ $ $ 3,029 2,190 1,600 Equity 3,029 2,190 1,600 2021 Est. 2.SO Est. Estimate BnB Construction Inc. Income Statement Millions of dollars 2020 2019 Net Sales 4,000 3,000 Operating costs 3.100 2300 2.100 | EBITD 900.00 700 750 Depreciatio 110 100 90 Amortization 0 Depreciation and Amortization 110 100 90 | EBITD 200 290 600 660 Interest 100 88 60 Earnings Before Taxes 690 512 600 Taxes (40%) 276 204.8 240 Net Income Before preferred Dividends 414 302.2 360 Preferred Dividends 4 Net Income $ 410.0 S 303.2$ Common Dividends 57.5 57.5 53 Addition to retained Earnings $ 352.50 $ 245.70 $ $ 356.0 303.0 Per Share Date Common Stock Price 2021 $ 2020 28.0 5 2019 $ 23.00 26.00 Earnings Per Share (EPS) Dividend Per Share (OPS) Book Value Per Share (BPS) Cash Flow Per Share 772 7777 7777 7777 $ s $ $ 6.06 $ 1.15$ 21.72 $ 8.06S 7.12 106 16.80 892 SUGGESTED FORMAT FOR REPORT 1. Introduction (3-4 lines) 2. Analysis of Financial Data (Table with ratios) 2021 Ratio Analysis Est. Liquidity Ratios Current Ratio (times) Quick Ratio (times) Industry Average 2020 2019 4.2 2.1 9 9 Asset Management Ratios Average sales/day Inventory Turnover Ratio (times) Days Sales Outstanding (days) Fixed Assets Turnover Ratio (times) Total Asset Turnover Ratio 36 3 1.8 40 Debt Management Ratios Total Debt to Total Assets (%) Times Interest Earned (times) Debt to Equity Ratio (%) 6 1 Profitability Ratios Profit Margin on Sales (%) Earning Power (%) Return on Total Assets (%) Return on Common Equity (%) 8 17.2 12 25 Market Value Ratios Price/Earnings Ratio Price/Earnings Ratio (times) Price/Cash Flow Ratio (times) Market /Book Value Ratio (times) 12.5 6.8 1.7 3. Comments on Financial Performance and Financial Position a. Liquidity b. Profitability C. Leverage d. Asset Management e. Market Value 4. Chance of Success of Application of the Loan 5. Conclusion 6. References (1 page maximum, included calculated per share data)
