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 Brickeys 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 years ending balance is the same as this years 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 Debttoequity ratio Equity multiplier Net profit margin percentage Return on equity Earnings per share Priceearnings 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. ( Use excel and Control ~ to show formulas)

s FS Analysis.pdf (page 1 of 2) Brickey Electronics Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets Cash Accounts receivable, net Inventory Prepaid expenses 6,000 8,000 300 15,731 5,000 120 16,701 Total current assets Property and equipment Land 4,000 12,000 4,000 8,500 Buildings and equipment, net Total property and equipment Total assets 16,000220 12,500 31,731 29,201 Liabilities and Stockholders' Equity Current liabilities 254,000 Accounts payable Accrued liabilites Notes payable, short term 900 300 400 600 Total current liabilities Long-term liabilities 6,825 W5,000 Bonds payable Total liabilites Stockholders' equity: 7,500 14,325 8,000 13,000 Common stock, $12 par Additional paid-in capital Total paid-n capital Retained earnings 6,000 3,000 9,000 8,406 6,000 3,000 9,000 7,201 16,201 Total stockholders' equity Total liabilites and stockholder's equity 31,731 29,201