f. Calculate the 2013 pricelearnings ratio, price/cash flow ratio, and market/book ratio. Do these ratios indicate that investors are expected to have a high or low opinion of the company? Hillar With its peers? Have there been any interesting changes over time in this mea wife? Do you consider Ford's inventory management to be a strength or weakness? MINI CASE The first part of the case, presented in Chapter 7, discussed the situation of Computron Industries after an expansion program. A large loss occurred in 2012, rather than the expected profit. As a result, its managers, direc- tors, and investors are concerned about the firm's survival. Jenny Cochran was brought in as assistant to Gary Meissner, Computron's chairman, who had the task of getting the company back into a sound financial position. Computron's 2011 and 2012 balance sheets and income statements, together with projections for 2013, are shown 2. Take a look at Ford's inventory turnover ratio. How does this ratio compare 3. Construct a simple Du Pont analysis for Ford and its peers. What are Ford's strengths and weaknesses relative to its competitors? Cochrans and Meissner's best guess for 2013 suming tut some new financing is arranged to get in the following tables. The tables also show the 2011 and 2018 financial rotos, along with industry average data The 2013 projected froncial statement data represent company over the hump- Balance Sheets 2012 2013E 2011 7,982 20,000 632,160 1,287,360 $1,946,802 1,202,950 263,160 $ 939,790 $2,886,592 $ 14,000 71,632 878,000 1,716,480 $2,680,112 1,990,000 383,160 $ 836,840 $3,516,952 Assets Cash $ 9,000 Short-term investments 48,600 Accounts receivable 351,900 Inventories 715,200 Total current assets $1,194,000 Gross fixed assets 491,000 Less: Accumulated depreciation 146,200 Net fixed assets $ 344,800 Total assets $1,468,800 Liabilities and Equity Accounts payable $ 145,000 Notes payable 200,000 Accruals 136,000 Total current liabilities $ 481,600 Long-term debt 393,432 Common stock (100,000 shares) 460,000 Retained earnings 203,768 Total equity $ 663,768 Total liabilities and equity $1,468,800 Note: "E" denotes "estimated", the 2013 data are forecasts. $ 394,000 720,000 284,960 $1,398,960 1,000,000 460,000 97,632 $ 557,632 $2,886,592 $ 359,800 300,000 380,000 31,039,800 500,000 1,680,936 296 216 $1.977 152 $3,516,952 Income Statements 2011 Sales Cost of goods sold Other expenses Depreciation and amortization Total operating costs EBIT Interest expense EBT Taxes (40%) Net income Other Data Stock price Shares outstanding $3,432,000 2,864,000 340,000 18,900 $3,222,900 $ 209,100 62,500 $ 146,600 58,640 $ 87,960 2012 $5,834,400 4,980,000 720,000 116,960 $5,816,960 $ 17,440 176,000 ($ 158,560) (63,424) ($ 95,136) 2013E $7,035,000 5,800,000 612,960 120,000 $6,539,960 $ 509,640 80,000 $ 422,640 169,056 $ 253,584 $ 100,000 600 100.00 19.17 250,000 313 Chapter 8 Analysis of Financial Statements EPS DPS Tax rate Book value per share Lease payments 2011 $ 0.880 $ 0.220 40% $ 6.638 $40,000 2012 (5 0.951) 0.110 40% $ 5.576 $40,000 2013E $ 1.014 0.220 40% $ 7.909 $40,000 Note: "E" denotes estimated"; the 2013 data are forecasts Ratio Analysis 2013E 2012 1.5 0.5 USS 4.5 39.6 6.2 2.0 80.7% 20 13.6% 2011 2.3 0.8 4.8 37.3 10.0 2.3 54.8% 3.3 2.6 2.6% 14.2% 6.0% 13.3% 9.7 8.0 1.3 0.1 Current Quick Inventory tumover Days sales outstanding Fixed assets turnover Total assets turnover Debt ratio TIE EBITDA coverage Profit margin Basic earning power ROA ROE Price/Earnings (P/E) Price/Cash flow Market/Book Industry Average 2.7 1.0 6.1 39.0 7.0 25 50.0% 6.2 8.0 3.6% 17.8% 9.0% 17.9% 16.2 7.6 2.9 55 0.8 -1.6% 0.6% -3.3% -17.1% --6.3 27.5 1.1 3.2 178 Note: "E* denotes "estimated