Financial Statement Analysis Project This project is to be used in conjunction with the Brickey Electronics Financial Statements we converted into excel in class. Completing this assignment in excel is not required, but it is encouraged. Some of the numbers have been changed in Brickey's financial statements. The changes are highlighted in red on the FS Analysis pdf included with the assignment posting. Either use the attached pdf or make the changes to the Brickey Electronics financial statements you have in Microsoft excel. Refer to chapter 15 for ratios that we may not have covered in class as well as additional information about financial statement analysis. Requirement 1 Perform a horizontal analysis of the financial statements, both income statement and balance sheet, for amount change and percentage change. Requirement 2 Calculate the following ratios for Brickey Electronics for This Year. Hint: Last year's ending balance is the same as this year's beginning balance when calculating averages. -Working capital -Current Ratio -Accounts receivable turnover -Average collection period -Inventory turnover -Average sale period -Operating cycle -Total asset turnover -Times interest earned -Debt-to-equity ratio -Equity multiplier -Net profit margin percentage -Return on equity -Earnings per share -Price-earnings ratio-Assume a $25 per share market price -Dividend yield ratio Requirement 3 For each Liquidity and Asset Management measure, decide if a higher or lower result is more desirable and give a brief description of what the measurement represents. Only do this for the Liquidity and Asset Management measures. Brickey Electronics Comparative Balance Sheet (dollars in thousands) This Last Year Year Assets Current assets: Cash 1,431 2,000 Accounts receivable, net 6,000 5,000 Inventory 8,000 9,581 Prepaid expenses 300 120 Total current assets 15,731 16,701 Property and equipment Land 4,000 4,000 Buildings and equipment, net 12,000 8,500 Total property and equipment 16,000 12,500 Total assets 31,731 29,201 Liabilities and Stockholders' Equity Current liabilities Accounts payable 5,625 4,000 Accrued liabilites 900 400 Notes payable, short term 300 600 Total current liabilities 6,825 5,000 Long-term liabilities Bonds payable 7,500 8,000 Total liabilites 14,325 13,000 Stockholders' equity: Common stock, $12 par 6,000 6,000 Additional paid-in capital 3,000 3,000 Total paid-in capital 9,000 9,000 Retained earnings 8,406 7,201 Total stockholders' equity 17,406 16,201 Total liabilites and stockholder's equity 31,731 29,201 Brickey Electronics Comparative Income State and Reconciliaion of Retained Earnings (dollars in thousands) This Last Year Year Sales 52,500 50,000 Costs of goods sold 36,250 32,250 gross margin 16,250 17,750 Selling and administrative expenses Selling expenes 7,000 6,300 Administrative expenses 5,860 7,200 Total selling and administravie expenses Net operating income 12,860 13,500 3,390 4,250 Interest expense 640 720 Net income before taxes 2,750 3,530 Income taxes (30%) 825 1,059 Net income 1,925 2,471 Dividens to common stockholders, 1.44 per share 720 720 Net income added to retained earnings 1,205 1,751 Beginning retained earnings 7,201 5,450 Ending retained earnings 8,406 7,201