Financial Statements Analysis Assignment 3 The balance sheet of Tribulations ltd for the year 2011 is as follows: Fixed Assets Ksh. 000 Intangible 123,000 Tangible 2,079,500 Investments 10,000 2,212,500 Current Assets Stocks 479,000 Debtors 1,774,500 Cash and short-term investments 5,000 2,258,500 Current liabilities Trade creditors 956,500 Bank overdraft 504,000 Other curent liabilities 152,500 1,613,000 Net working capital 645,500 Total assets 2,858,000 Long-term Loans 124,000 Other long-term liabilities 33,000 total non-current liabilities 157,000 Share capital (10 Million shares of ksh 30 each) 300,000 Page 2 of 3 Mackred Dinga Income statement of Tribulations Limited for the year to December 31 2011 Ksh.000 Sales revenue 1,900,000 Less: Cost of Sales (880,000) Gross Profit 1,020,000 Less: operating Expense (270,000) Earnings before interest and taxes 750,000 Interest Expense (130,000) Profit before tax 620,000 Less: Income Tax Expense (92,000) Profit after tax 528,000 Less: proposed dividends (23,500) Retained earnings 504,500 Assume that the market value of the companys stocks at the year end was ksh 300 per share and the company generated a negative cash flow in the year amounting to ksh 93 Million. Required: Use the following models to assess the financial strength or otherwise of the company; a) Altmans model Z=1.2WC/TA + 1.4 RE/TA + 3.3 EBIT/TA + 0.6 MVE/TL + 1.0 SL/TA b) The Springate model Z = 1.03A + 3.07B + 0.66C + 0.4D c) Fulmer model H = 5.528 (V1) + 0.212 (V2) + 0.073 (V3)+ 1.270 (V4) - 0.120 (V5) + 2.335 (V6)+ 0.575 (V7) + 1.083 (V8) + 0.894 (V9)- 6.075 Profit and loss account Brought forward 1,896,500 Retained for year 504,500 Shareholder fund 2,701,000 Long-term liabilities & shareholders funds 2,858,000 Page 3 of 3 Mackred Dinga