CASE ANALYSIS - CARRIUM INSIGHTS INC. The following comprehensive assessment is based on a continuing case study of Carrium Insights Inc. The following financial statements have been provided: Carrium Insights Inc. Income Statement For the year ended December 31, 2020 2020 ('000) Sales 2.800 Cost of Goods Sold (1,400) Selling & Marketing Costs (75) Admin. Expenses (25) Depreciation Expense (50) Eamings before Interest & Taxes 1.250 Interest Expense Taxable income Taxation (20%) Net Income 984 Dividends (50%) Addition to retained Earnings 492 (20) 1,230 (246) 492 1000) 2019 (000) 2020 C000s) ASSETS Current Assets Inventories Accounts Receivables Cash & Equivalents Carrium Insights Inc. Statement of Financial Position As at December 31, 2019 & 2020 2019 2020 000s) LIABILITIES & EQUITY Current Liabilities 600 680 Accounts Payables 300 340 Notes Payables 1.100 1,340 2,000 2,360 Non-current Liabilites 1.870 2.240 Total Liabilities 1,100 700 1,800 1,360 860 2.220 770 568 Non Current Assets, Net 2,570 2,788 820 840 480 Equity Common Stock Retained Earnings Total Equity TOTAL LIAB. & EQUITY 972 1,812 1,300 TOTAL ASSETS 3,870 4,600 3,870 4,600 Question 1 25 MARKS PARTA 15 Marks As part of your analysis, you are required to investigate Carrium Insights Inc. cash flows and compute selected financial ratios using the financial statements provided on page 2 Required: (a) Calculate the following for 2020: Operating Cash Flow (1 Mark) II. Net Capital Spending (1 Mark) lii. Change in Net Working Capital (2 Marks) iv. Cash Flow from Assets (2 Marks) v. Cash Flow to Creditors (2 Marks) vi. Cash Flow to Stockholders (2 Marks) (b) A company's asset utilization or turnover ratios are intended to display how efficiently or intensively a firm uses its assets to generate sales. Calculate the following turnover ratios for 2020: 1. Inventory Turnover (1 Mark) ii. Days' sales in inventory (1 Mark) it. NWC Turnover (2 Marks) iv. Total Asset Turnover (1 Mark) PART B 10 Marks The Finance Manager is trying to ensure that the company's excess cash holdings are all invested in interest-bearing short-term instruments. Carrium's bankers have provided details on enhanced savings accounts that is offered to business clients: Option 1: Annual interest rate of 8%, compounded weekly; Option 2: Annual interest rate of 8.25%, compounded monthly: Option 3: Annual interest rate of 8.30%. Required: Advise the Finance Manager on the best option (10 Marks)