eBook Calculator Chapter 3 Homework The Protek Company is a large manufacturer and distributor of electronic components. Because of some successful new products marketed to manufacturers of computers and mobile electronic devises, the firm has recently undergone a period of explosive growth, more than doubling its revenues during the last two years. However, the growth has been accompanied by a marked decline in profitability and a precipitous drop in the company's stock price. You are a financial consultant who has been retained to analyze the company's performance and find out what's going wrong. Your investigative plan involves conducting a series of in-depth interviews with management and doing some independent research on the industry. However, before starting, you want to focus your thinking to be sure you can ask the night questions. You'll begin by analyzing the firm's financial statements over the last three years, which are shown below. The following additional information is provided with the financial statements. Depreciation for 20x1, 20X2, and 20x3 was $200, $250, and $275 million respectively. No stock was sold or repurchased, and like many fast-growing companies, Protek paid no dividends. Assume the tax rate is a flat 34% and the firm pays 10% interest on its debt. Protek Company Income Statements For the periods ended 12/31 (5000,000) 20X1 20X2 20x3 Sales $ 1604 $ 2118 $ 3263 COGS 631 906 1502 Gross margin 5973 $1212 $ 1761 Expenses Marketing $316 $ 495 $ 82 R&D 158 211 327 Administration 294 126 179 Total expenses $ 600 $ 855 $ 1503 EBIT Interest $ 373 63 $ 327 95 $ 258 143 Check My Work Email Instructor Save and Exit Submit Assignment for Grading Assignment Score: 4.76% 7:46 PM 9/16/2020 o Type here to search Ri . 99+ Chapter 3 Homework eBook Calculator $ 310 $ 232 $ 115 EBT Tax 105 79 39 $ 205 $ 153 $ 76 Protek Company Balance Sheets For the periods ended 12/31 ($000,000) 20X1 20X2 20X3 ASSETS Cash 5 30 S 40 $ 62 175 351 590 Accounts receivable Inventory Current assets 90 151 300 > $ 295 $ 542 $ 952 Fixed assets Gross $ 2331 $ 1515 (610) Accumulated depreciation (860) $ 1471 $ 2675 (1135) $ 1540 $ 2492 Net $ 905 Total assets $ 1200 $ 2013 Protek Company Balance Sheets For the periods ended 12/31 ($000,000) Check My Work Assignment Score: 4.76% Email Instructor Chapter 3 Homework eBook Calculator 20X1 20X2 20x3 LIABILITIES Accounts payable $ 56 $ 81 $ 134 Accruals 15 20 30 Current liabilities $ 71 $ 101 $ 164 Capital Long term debt S 630 $ 1260 $ 1600 Equity 499 652 728 Total liabilities & equity $ 1200 $ 2013 $ 2492 a. Construct common size income statements for 20X1, 20X2, and 20X3. Round your answers to 2 decimal places. 20X1 20X2 20X3 % $ 20 $ Sales 5 1604 $ 2118 $ 3263 COGS 631 906 1,502 Gross Margin $ 973 $ 1212 $ 1761 Expenses Marketing $316 $ 495 $ 882 R&D 158 211 327 Admin. 126 179 294 Total Expenses $600 $ 885 $ 1503 EBIT $ 373 $327 $ 258 Check My Work Assignment Score: 4.76% Email Instructor Save and Exit Submit Assignment for Grading Type here to search 99 0 7:48 PM 9/16/2020 Chapter 3 Homework ebook Calculator Interest 95 143 EBT $310 $ 232 115 $105 $ 79 $ 39 EAT $ 205 $ 153 S 76 b. Construct statements of cash flows for 20x2 and 20X3. Use a minus sign, to indicate any decreases in cash or cash outflows. PROTEK COMPANY Statement of Cash Flows For the years ended 12/31 20x2 and 20X3 (S000,000) OPERATING ACTIVITIES: 20X2 20X3 Net Income 5 5 Depreciation $ S Net changes in current accounts 5 S Cash from Operating Activities 5 $ INVESTING ACTIVITIES: Increase in Fixed Assets $ $ Cash from Investing Activities $ $ Check My Work TO All in EmaLTO Save and til Chapter 3 Homework ebook Calculator FINANCING ACTIVITIES: Increase in Debt $ Cash from Financing Activities $ $ NET CASH FLOW S $ RECONCILIATION Beginning Cash 5 5 Net Cash Flow $ $ 5 Ending Cash 5 c. Calculate the indicated ratios for all three years. Round ACP up to the nearest whole day. Round the other answers to 1 decimal place. PROTEK COMPANY Ratio Analysis Industry Average 20X1 20x2 20x3 Current Ratio 4.5 Quick Ratio 3.2 42 days days days Inventory Tumover (COGS) 7.5X X X Check My Work Email Instructor Save and Exit All work saved Submit Assignment for Gradin Assignment Score: 4.76% 7:49 PM 9/16/202 Type here to search O d . 99 Chapter 3 Homework ebook Calculator Fixed Asset Turnover 1.6X X X X Total Asset Turnover 1.2X X X Debt Ratio 53% 9% % % Debt Equity 1:1 21 11 :1 TIE 4.5X X X ROS 9.0% % % % ROA 10.8% % % % ROE 22.8% 9 % % Equity Multiplier 2.1 d. Construct both Du Pont equations for Protek and the industry. Round your answers to 1 decimal place. The Du Pont Equation ROA ROS % Total Asset Turnover % Industry X Protek % % The Extended Du Pont Equation ROE ROA Equity Multiplier X 11 Industry % - % X Protek 20 Check My Work Email Instructor Save and Et Sub All work saved. Chapter 3 Homework look Calculator 10 Industry Protek The Extended Du Pont Equation ROE ROA Equity Multiplier Industry 9 x Protek . One hundred million shares of stock luve been outstanding for the entire period. The price of Protek stock in 20X1, 20X2, od 20x3 was 547.15, $30.60, and $12.92 respectively. Calculate the firm's Earnings Per Share (EPS) and Price Earnings Ratio (P/E). Round your answers to 2 decimal places 20x1 20x2 20X3 of Shares 100 mil 100 mil 100 mil Earnings (SM) 205 153 7h Stock Price $47.15 $30.60 $12.92 EPS 5 $ PE Market to TV Ched Work Partially Check My Work Instructor Save and Exit All work saved Submit Assignment for Grading Assignment Score: 4.75% D 2:50 PM 9/10/2000 22 CE Type here to search O 99+ eBook Calculator Chapter 3 Homework The Protek Company is a large manufacturer and distributor of electronic components. Because of some successful new products marketed to manufacturers of computers and mobile electronic devises, the firm has recently undergone a period of explosive growth, more than doubling its revenues during the last two years. However, the growth has been accompanied by a marked decline in profitability and a precipitous drop in the company's stock price. You are a financial consultant who has been retained to analyze the company's performance and find out what's going wrong. Your investigative plan involves conducting a series of in-depth interviews with management and doing some independent research on the industry. However, before starting, you want to focus your thinking to be sure you can ask the night questions. You'll begin by analyzing the firm's financial statements over the last three years, which are shown below. The following additional information is provided with the financial statements. Depreciation for 20x1, 20X2, and 20x3 was $200, $250, and $275 million respectively. No stock was sold or repurchased, and like many fast-growing companies, Protek paid no dividends. Assume the tax rate is a flat 34% and the firm pays 10% interest on its debt. Protek Company Income Statements For the periods ended 12/31 (5000,000) 20X1 20X2 20x3 Sales $ 1604 $ 2118 $ 3263 COGS 631 906 1502 Gross margin 5973 $1212 $ 1761 Expenses Marketing $316 $ 495 $ 82 R&D 158 211 327 Administration 294 126 179 Total expenses $ 600 $ 855 $ 1503 EBIT Interest $ 373 63 $ 327 95 $ 258 143 Check My Work Email Instructor Save and Exit Submit Assignment for Grading Assignment Score: 4.76% 7:46 PM 9/16/2020 o Type here to search Ri . 99+ Chapter 3 Homework eBook Calculator $ 310 $ 232 $ 115 EBT Tax 105 79 39 $ 205 $ 153 $ 76 Protek Company Balance Sheets For the periods ended 12/31 ($000,000) 20X1 20X2 20X3 ASSETS Cash 5 30 S 40 $ 62 175 351 590 Accounts receivable Inventory Current assets 90 151 300 > $ 295 $ 542 $ 952 Fixed assets Gross $ 2331 $ 1515 (610) Accumulated depreciation (860) $ 1471 $ 2675 (1135) $ 1540 $ 2492 Net $ 905 Total assets $ 1200 $ 2013 Protek Company Balance Sheets For the periods ended 12/31 ($000,000) Check My Work Assignment Score: 4.76% Email Instructor Chapter 3 Homework eBook Calculator 20X1 20X2 20x3 LIABILITIES Accounts payable $ 56 $ 81 $ 134 Accruals 15 20 30 Current liabilities $ 71 $ 101 $ 164 Capital Long term debt S 630 $ 1260 $ 1600 Equity 499 652 728 Total liabilities & equity $ 1200 $ 2013 $ 2492 a. Construct common size income statements for 20X1, 20X2, and 20X3. Round your answers to 2 decimal places. 20X1 20X2 20X3 % $ 20 $ Sales 5 1604 $ 2118 $ 3263 COGS 631 906 1,502 Gross Margin $ 973 $ 1212 $ 1761 Expenses Marketing $316 $ 495 $ 882 R&D 158 211 327 Admin. 126 179 294 Total Expenses $600 $ 885 $ 1503 EBIT $ 373 $327 $ 258 Check My Work Assignment Score: 4.76% Email Instructor Save and Exit Submit Assignment for Grading Type here to search 99 0 7:48 PM 9/16/2020 Chapter 3 Homework ebook Calculator Interest 95 143 EBT $310 $ 232 115 $105 $ 79 $ 39 EAT $ 205 $ 153 S 76 b. Construct statements of cash flows for 20x2 and 20X3. Use a minus sign, to indicate any decreases in cash or cash outflows. PROTEK COMPANY Statement of Cash Flows For the years ended 12/31 20x2 and 20X3 (S000,000) OPERATING ACTIVITIES: 20X2 20X3 Net Income 5 5 Depreciation $ S Net changes in current accounts 5 S Cash from Operating Activities 5 $ INVESTING ACTIVITIES: Increase in Fixed Assets $ $ Cash from Investing Activities $ $ Check My Work TO All in EmaLTO Save and til Chapter 3 Homework ebook Calculator FINANCING ACTIVITIES: Increase in Debt $ Cash from Financing Activities $ $ NET CASH FLOW S $ RECONCILIATION Beginning Cash 5 5 Net Cash Flow $ $ 5 Ending Cash 5 c. Calculate the indicated ratios for all three years. Round ACP up to the nearest whole day. Round the other answers to 1 decimal place. PROTEK COMPANY Ratio Analysis Industry Average 20X1 20x2 20x3 Current Ratio 4.5 Quick Ratio 3.2 42 days days days Inventory Tumover (COGS) 7.5X X X Check My Work Email Instructor Save and Exit All work saved Submit Assignment for Gradin Assignment Score: 4.76% 7:49 PM 9/16/202 Type here to search O d . 99 Chapter 3 Homework ebook Calculator Fixed Asset Turnover 1.6X X X X Total Asset Turnover 1.2X X X Debt Ratio 53% 9% % % Debt Equity 1:1 21 11 :1 TIE 4.5X X X ROS 9.0% % % % ROA 10.8% % % % ROE 22.8% 9 % % Equity Multiplier 2.1 d. Construct both Du Pont equations for Protek and the industry. Round your answers to 1 decimal place. The Du Pont Equation ROA ROS % Total Asset Turnover % Industry X Protek % % The Extended Du Pont Equation ROE ROA Equity Multiplier X 11 Industry % - % X Protek 20 Check My Work Email Instructor Save and Et Sub All work saved. Chapter 3 Homework look Calculator 10 Industry Protek The Extended Du Pont Equation ROE ROA Equity Multiplier Industry 9 x Protek . One hundred million shares of stock luve been outstanding for the entire period. The price of Protek stock in 20X1, 20X2, od 20x3 was 547.15, $30.60, and $12.92 respectively. Calculate the firm's Earnings Per Share (EPS) and Price Earnings Ratio (P/E). Round your answers to 2 decimal places 20x1 20x2 20X3 of Shares 100 mil 100 mil 100 mil Earnings (SM) 205 153 7h Stock Price $47.15 $30.60 $12.92 EPS 5 $ PE Market to TV Ched Work Partially Check My Work Instructor Save and Exit All work saved Submit Assignment for Grading Assignment Score: 4.75% D 2:50 PM 9/10/2000 22 CE Type here to search O 99+