Eample: in Table 6, 1993 current ratio =209,677/99808=2,10. See Tables 1 and 2 in casebook. 111 and 131 in textbook. For 1994, current 305,532/106058=2.88. In Table 6 in cascbook on page 72 , change most 1993 and 1994 ratios to (some do not change): Asset Management Ratios: Inventory turnover (cost): 5.75.7 Inventory turnover (sales) xx Fixed asset tumover 11.3813.77 Total asset turnover 1.78 Days sales outstanding (ACP) 32 Profitability Ratios: Profit margin xX Gross profit margin 30%40 Return on total assets 18.44%25.73% ROE xx Other Rotios: Altman Z factor 6.5210.05 Payout ratio 0.00% For pro forma ratios Current ratio - page 111 (4-2A) Quick ratio - page 113 (4-2B) Dobtratin - 110(A.A) Table 2 Total operating expenses 47.880 EBIT 84,533 Interest on short term loans 5,9061,912379 Interest on long term loans Interest on mortgage 379 Total interest 8,197 Before-tax earnings 76,336 LIABILITES AND EQUITIES Short-term bank loans Accounts payable Accruals Current liabilities Long-term bank loans Mortgage Long-term debt Total liabilitics Common stock (7 million shares) Retained earnings Total equity Total liabilities and equity \begin{tabular}{rr} X & X \\ 31,990 & 33,590 \\ 18,602 & 23,252 \end{tabular} 20.082 20,082 4,208 3,789 24,290 23,870 x 46,538 46,538 X X X x Before-tax carnings 76,336 Taxes 30,534 Net income 45,802 Dividends on stock o Additions to retained earnings 45,802 EPS (7,.000,000 shares) 6.54 4. Fill in the Xs, Do income statement first. Fill in blanks in order that you can figure them out. I suggest you do them in the following order on the balance sheet accounts receivable, inventory, short term bank loans, current liabilities, total liabilities, retained earnings, total equity, total liabilities and equity. current assets, cash and marketable securities. In Table 1 in casebook on page 67 , change most 1993 and 1994 numbers to (some do not change): Examples: Net sales 1993=4012511.1=$441,376(10% increase ) Cost of goods sold 1993=441,376.7=$308,963 Administrative and selling expenses 1993=441,376.08=$35,310 Historical and Pro Forma Balance Sheets Table 2 19931994 Net Sales \begin{tabular}{rr} $441,376 & $507.583 \\ 308,963 & \\ \hline \end{tabular} Cost of goods sold Gross profit 132,413 203.033 \begin{tabular}{|c|c|c|} \hline Administration and selling expenses & x & x \\ \hline Depreciation & 4,846 & 3,646 \\ \hline Miscellaneous expenses & x & 6.345 \\ \hline Total operating expenses & x & x \\ \hline EBIT & 84,533 & x \\ \hline Interest on short term loans & 5,906 & 5,906 \\ \hline Interest on long term loans & 1.912 & 1,912 \\ \hline Interest on mortgage & 379 & 341 \\ \hline \end{tabular} Total interest 8.197 8.159 For pro forma ratios Current ratio - page 111(42N) Quick ratio - page 113(428) Debt ratio- 119(44N) ThE coverage - 119(448) Inventory turnover (CCS) - 114(43N) Total assets turnover 116(43D) DsO (ACP)=115(43B) Profit marein - 121 (4-58) Gross profit margin = gross profit / sales ROE - 122(450) Payout ratio - casebook or dividends / net income Ntman Z tactor * use P/Es (given in case for 1993 and 1994) X net income to get market value of stock-see bale 6 footnote d on page 72 Eample: in Table 6, 1993 current ratio =209,677/99808=2,10. See Tables 1 and 2 in casebook. 111 and 131 in textbook. For 1994, current 305,532/106058=2.88. In Table 6 in cascbook on page 72 , change most 1993 and 1994 ratios to (some do not change): Asset Management Ratios: Inventory turnover (cost): 5.75.7 Inventory turnover (sales) xx Fixed asset tumover 11.3813.77 Total asset turnover 1.78 Days sales outstanding (ACP) 32 Profitability Ratios: Profit margin xX Gross profit margin 30%40 Return on total assets 18.44%25.73% ROE xx Other Rotios: Altman Z factor 6.5210.05 Payout ratio 0.00% For pro forma ratios Current ratio - page 111 (4-2A) Quick ratio - page 113 (4-2B) Dobtratin - 110(A.A) Table 2 Total operating expenses 47.880 EBIT 84,533 Interest on short term loans 5,9061,912379 Interest on long term loans Interest on mortgage 379 Total interest 8,197 Before-tax earnings 76,336 LIABILITES AND EQUITIES Short-term bank loans Accounts payable Accruals Current liabilities Long-term bank loans Mortgage Long-term debt Total liabilitics Common stock (7 million shares) Retained earnings Total equity Total liabilities and equity \begin{tabular}{rr} X & X \\ 31,990 & 33,590 \\ 18,602 & 23,252 \end{tabular} 20.082 20,082 4,208 3,789 24,290 23,870 x 46,538 46,538 X X X x Before-tax carnings 76,336 Taxes 30,534 Net income 45,802 Dividends on stock o Additions to retained earnings 45,802 EPS (7,.000,000 shares) 6.54 4. Fill in the Xs, Do income statement first. Fill in blanks in order that you can figure them out. I suggest you do them in the following order on the balance sheet accounts receivable, inventory, short term bank loans, current liabilities, total liabilities, retained earnings, total equity, total liabilities and equity. current assets, cash and marketable securities. In Table 1 in casebook on page 67 , change most 1993 and 1994 numbers to (some do not change): Examples: Net sales 1993=4012511.1=$441,376(10% increase ) Cost of goods sold 1993=441,376.7=$308,963 Administrative and selling expenses 1993=441,376.08=$35,310 Historical and Pro Forma Balance Sheets Table 2 19931994 Net Sales \begin{tabular}{rr} $441,376 & $507.583 \\ 308,963 & \\ \hline \end{tabular} Cost of goods sold Gross profit 132,413 203.033 \begin{tabular}{|c|c|c|} \hline Administration and selling expenses & x & x \\ \hline Depreciation & 4,846 & 3,646 \\ \hline Miscellaneous expenses & x & 6.345 \\ \hline Total operating expenses & x & x \\ \hline EBIT & 84,533 & x \\ \hline Interest on short term loans & 5,906 & 5,906 \\ \hline Interest on long term loans & 1.912 & 1,912 \\ \hline Interest on mortgage & 379 & 341 \\ \hline \end{tabular} Total interest 8.197 8.159 For pro forma ratios Current ratio - page 111(42N) Quick ratio - page 113(428) Debt ratio- 119(44N) ThE coverage - 119(448) Inventory turnover (CCS) - 114(43N) Total assets turnover 116(43D) DsO (ACP)=115(43B) Profit marein - 121 (4-58) Gross profit margin = gross profit / sales ROE - 122(450) Payout ratio - casebook or dividends / net income Ntman Z tactor * use P/Es (given in case for 1993 and 1994) X net income to get market value of stock-see bale 6 footnote d on page 72