1. Data for Cary Company and its industry average follow. Provide your answers with solutions.

Balance Sheet as of Dec. 31
Assets		Liabilities and Owner's Equity
	2019		2019
Current Assets		Current Liabilities
Cash	75,500	Accts payable	127,000
A/R	330,000	Notes payable	84,000
Inventories	251,500	Other current liabilities	115,000
Total CA	657,000	Total CL	326,000
Net fixed assets		Long-term debt	266,500
Net plant and equipment	282,500	Total Liabilities	592,500
		Common Equity	347,000
Total Assets	939,500	Total Liabilities and Equity	939,500

Income statement for the year ending December 31
	2019
Sales	1,600,500
COGS	(1,353,000)
Gross profit	247,500
Fixed operating expenses except depreciation	(140,000)
Earnings before interest, taxes, depre and amort (EBITDA)	107,500
Depreciation	(40,000)
EBIT (Opering income)	67,500
Interest expense	(24,000)
EBT (Taxable income)	43,500
Taxes (40%)	(17,400)
Net income	26,100

1. Calculate the indicated ratios for Cary.

Ratio		Cary	Industry Average
Current ratio		_____________	2.0 X
Days sales outstanding		_____________	35 days
Inventory turnover		_____________	5.6 X
Total assets turnover		_____________	3.0 X
Net profit margin		_____________	1.2%
Return on assets (ROA)		_____________	3.60%
Return on equity (ROE)		_____________	9.00%
Debt ratio		_____________	60%

2. Construct the DuPont equation for both Cary and the industry (Only construct DuPont ROA for Cary and the industry)

DuPont ROA (Cary) =

DuPont ROA (Industry) =

3. Outline Carys strengths and weaknesses as revealed by your analysis.

Use the following balance sheet and income statement to calculate OCF, NCS, change in NWC, CF to creditors, CF to shareholders, and CFFA. Assets Current Assets Cash Accounts receivable Inventory Total Fixed Assets Net Plant and Equipment U.S. CORPORATION 2018 and 2019 Balance Sheets ($ in millions) Liabilities and Owner's Equity 2018 2019 2018 2019 Current Liabilities $ 104 $ 160 Accounts payable $ 232 $ 266 455 688 Notes payable 196 123 553 555 Total $ 428 $ 389 $ 1,112 $1,403 Long-Term Debt $ 408 $ 454 $1,644 $1,709 Owner's Equity Common stock and paid-in surplus 600 640 Retained earnings 1,320 1,629 Total $ 1,920 $2,269 Total liabilities and owner's $ 2,756 $3,112 equity $ 2,756 $3,112 Total Assets $ 1,509 750 U.S. CORPORATION 2019 Income Statement ($ in millions) Net sales Cost of goods sold Depreciation Earnings before interest and taxes Interest paid Taxable income Taxes (34%) Net income Dividends $ 103 Additions to retained earnings 309 65 $ 694 70 $ 624 212 $ 412 OCF = NCS = Change in NWC = CF to creditors = = CF to shareholders = CFFA=