Find the Ratios and Cash Flow information from financial statements.
POSH FURNITURE BALANCE SHEET 2018 2019 Income Statement 2017 2018 Assets Cash 930,000 693,000 237,000 934,000 700,000 234,000 2019 937,000 712,000 225,000 Accounts receivable Less: allowance for doubtful accounts Net accounts receivable Inventory Total current assets Furniture and fixtures Leasehold improvements Transportation equipment Gross fixed assets Less: Accum. depreciation Net fixed assets Intangible assets Total assets 2017 10,000 112,000 2,500 109,500 70,000 189,500 67,000 3,000 52,000 122,000 36,000 86,000 3,000 278,500 5,000 109,000 2,500 106,500 68,000 179,500 75,000 3,000 53,000 131,000 43,000 88,000 3,000 270,500 4,000 109,000 2,500 106,500 70,000 180,500 81,000 3,000 60,000 144,000 50,500 93,500 3,000 277,000 159,000 25,000 20,000 2,000 0 160,500 27,000 21,000 2,000 Net sales Cost of goods sold Gross profit Operating Expenses Selling, gen. and admin. Expense Officer's compensation Rent expenses Bad debt expense Profit-sharing expense Depreciation expense Total operating expenses Operating income Other Income and Expenses Other income Interest income Rental income Interest expense Net profit before tax Taxes Net profit after tax 162,000 27,000 22,000 2,000 0 7,500 220,500 4,500 0 6,000 212,000 25,000 7,000 217,500 16,500 2,000 3,000 1,800 4,554 27,246 0 27,246 1,500 3,000 2,000 4,554 18,446 0 18,446 1,500 3,000 2,000 3,857 7,143 7,143 Liabilities Notes payable bank short-term Accounts payable-trade Income taxes payable Accrued bonuses Total current liabilities Subordinated debt officers Other long-term debt Total long-term debt Total liabilities 74,000 43,000 9,000 9,000 135,000 5,000 79,500 84,500 219,500 62,000 44,000 8,000 9,000 123,000 5,000 66,554 71,554 194,554 68,500 32,000 9,000 14,000 123,500 4,000 69,411 73,411 196,911 3 Net worth Common stock 1 Retained earnings 2 Intangible equity 3 Total net worth Total liabilities and net worth 2,000 54,000 3,000 59,000 278,500 2,000 70,946 3,000 75,946 270,500 2,000 75,089 3,000 80,089 277,000 5 5 7 Notes: 3 Current Maturity of Long-Term Debt Current interest expense on Long-Term Debt 14,923 4,554 12,637 3,857 Most recent median POSH FURNITURE BALANCE SHEET Ratios Green=correct, Red=incorrect 2017 2018 2019 Peer Ratios 2017 2018 2019 peer ratios SIC code 25 1 1 Liquidity Current ratio (x) Quick ratio (x) Working capital ($000s) 1.4 0.9 $54,500 1.5 0.9 $56,500 1.5 0.9 $57,000 1.7 0.7 n/a 1 1 1 1 1 1 n/a 2.60 0.79 1 1 1 1 Leverage Debt to net worth (x) Tangible leverage (x) Tangible effective leverage (x) 3.7 3.9 2.5 2.6 1 1 1 n/a 2.7 2.4 3.5 2.4 n/a 0 0 0 n/a 1 1 1 1 1 Profitability Gross profit margin (%) Operating profit margin (%) Pretax profit margin (%) Net profit margin (%) Return-on-assets (%) Return-on-equity (%) n/a n/a 1 1 25.5% 2.7% 2.9% 2.9% 9.8% 46.2% 0 n/a n/a 1 1 25.1% 1.8% 2.0% 2.0% 6.8% 24.3% 24.0% 0.5% 0.8% 0.8% 2.6% 8.9% 1 1 3.7% 5.0% 1 1 1 1 1 13.9% 1 1 1 43.0 29.9 1 1 1 Efficiency Accounts receivable turnover (d) Inventory turnover (d) Accounts payable turnover (d) Sales to total assets (x) 41.5 35.9 36.9 1 1 1 41.6 35.5 22.9 3.5 n/a n/a 1 n/a n/a 57.0% 1 22.6 3.3 1 16.4 3.4 1 1 1 0 Coverage AFS Ratios CashFlow PeerRatios PeerNorms n/a 1.71 1.16 n/a n/a 0 0 Coverage Traditional cash flow coverage Interest coverage (x) Fixed charge coverage (x) Dividend payout ratio (%) n/a n/a 7.0 5.1 2.9 n/a 1 1 1 8.3 3.7 1.0 n/a 1 0 0 n/a n/a n/a 8.1% 42.0% n/a n/a 1 1 1 1 1 Earnings EBI ($000s) EBIT ($000s) EBITD ($000s) EBITDA ($000s) 1 1 1 31,800 31,800 37,800 37,800 23,000 23,000 30,000 30,000 11,000 11,000 18,500 18,500 1 1 1 1 1 1 21 21 21 Points 4.4 Total Quiz Points 8.3 FS Ratios CashFlow Peer Ratios PeerNorms Green=correct, Red=incorrect 2018 2019 2018 2019 18,446 7,143 7,000 7,500 1 POSH FURNITURE BALANCE SHEET CASH FLOW FOR THE YEAR ENDING Cash Flow from Operating Activities Net income Adjustments to reconcile net income to net cash Depreciation Changes in current assets and current liabilities Accounts receivable (increase) decrease Inventory (increase) decrease Accounts payable-trade increase (decrease) Income taxes payable increase (decrease) Accrued bonuses increase (decrease) Net cash provided by operating activities 0 3,000 2,000 1,000 -2,000 - 12,000 1,000 5,000 - 1,000 ol 0 n/a n/a Cash Flow from Investing Activities Proceeds from sale of equipment Capital expenditures Net cash provided by investing activities n/a -9,000 n/a -13,000 1 0 0 0 0 - 12,000 6,500 Cash Flow from Financing Activities Proceeds from sale of stock Proceeds from short-term debt Proceeds from subordinated debt Payment under capital lease obligations Dividends paid Net cash provided by financing activities 0 0 n/a n/a 1 -1,500 -3,000 0 Sum of net cash flows (net change in cash) -5.000 -1,000 AFS Ratios CashFlow Peer Ratios PeerNorms 0 1 1 -12,000 6,500 1 1 Cash Flow from Financing Activities Proceeds from sale of stock Proceeds from short-term debt Proceeds from subordinated debt Payment under capital lease obligations Dividends paid Net cash provided by financing activities 0 0 n/a n/a -1,500 -3,000 1 1 0 0 1 1 Sum of net cash flows (net change in cash) Cash at beginning of year Cash at end of year -5,000 10,000 5,000 -1,000 5,000 4,000 1 1 1 1 14 14 Points 3.9 FS Ratios CashFlow PeerRatios PeerNorms + POSH FURNITURE BALANCE SHEET 2018 2019 Income Statement 2017 2018 Assets Cash 930,000 693,000 237,000 934,000 700,000 234,000 2019 937,000 712,000 225,000 Accounts receivable Less: allowance for doubtful accounts Net accounts receivable Inventory Total current assets Furniture and fixtures Leasehold improvements Transportation equipment Gross fixed assets Less: Accum. depreciation Net fixed assets Intangible assets Total assets 2017 10,000 112,000 2,500 109,500 70,000 189,500 67,000 3,000 52,000 122,000 36,000 86,000 3,000 278,500 5,000 109,000 2,500 106,500 68,000 179,500 75,000 3,000 53,000 131,000 43,000 88,000 3,000 270,500 4,000 109,000 2,500 106,500 70,000 180,500 81,000 3,000 60,000 144,000 50,500 93,500 3,000 277,000 159,000 25,000 20,000 2,000 0 160,500 27,000 21,000 2,000 Net sales Cost of goods sold Gross profit Operating Expenses Selling, gen. and admin. Expense Officer's compensation Rent expenses Bad debt expense Profit-sharing expense Depreciation expense Total operating expenses Operating income Other Income and Expenses Other income Interest income Rental income Interest expense Net profit before tax Taxes Net profit after tax 162,000 27,000 22,000 2,000 0 7,500 220,500 4,500 0 6,000 212,000 25,000 7,000 217,500 16,500 2,000 3,000 1,800 4,554 27,246 0 27,246 1,500 3,000 2,000 4,554 18,446 0 18,446 1,500 3,000 2,000 3,857 7,143 7,143 Liabilities Notes payable bank short-term Accounts payable-trade Income taxes payable Accrued bonuses Total current liabilities Subordinated debt officers Other long-term debt Total long-term debt Total liabilities 74,000 43,000 9,000 9,000 135,000 5,000 79,500 84,500 219,500 62,000 44,000 8,000 9,000 123,000 5,000 66,554 71,554 194,554 68,500 32,000 9,000 14,000 123,500 4,000 69,411 73,411 196,911 3 Net worth Common stock 1 Retained earnings 2 Intangible equity 3 Total net worth Total liabilities and net worth 2,000 54,000 3,000 59,000 278,500 2,000 70,946 3,000 75,946 270,500 2,000 75,089 3,000 80,089 277,000 5 5 7 Notes: 3 Current Maturity of Long-Term Debt Current interest expense on Long-Term Debt 14,923 4,554 12,637 3,857 Most recent median POSH FURNITURE BALANCE SHEET Ratios Green=correct, Red=incorrect 2017 2018 2019 Peer Ratios 2017 2018 2019 peer ratios SIC code 25 1 1 Liquidity Current ratio (x) Quick ratio (x) Working capital ($000s) 1.4 0.9 $54,500 1.5 0.9 $56,500 1.5 0.9 $57,000 1.7 0.7 n/a 1 1 1 1 1 1 n/a 2.60 0.79 1 1 1 1 Leverage Debt to net worth (x) Tangible leverage (x) Tangible effective leverage (x) 3.7 3.9 2.5 2.6 1 1 1 n/a 2.7 2.4 3.5 2.4 n/a 0 0 0 n/a 1 1 1 1 1 Profitability Gross profit margin (%) Operating profit margin (%) Pretax profit margin (%) Net profit margin (%) Return-on-assets (%) Return-on-equity (%) n/a n/a 1 1 25.5% 2.7% 2.9% 2.9% 9.8% 46.2% 0 n/a n/a 1 1 25.1% 1.8% 2.0% 2.0% 6.8% 24.3% 24.0% 0.5% 0.8% 0.8% 2.6% 8.9% 1 1 3.7% 5.0% 1 1 1 1 1 13.9% 1 1 1 43.0 29.9 1 1 1 Efficiency Accounts receivable turnover (d) Inventory turnover (d) Accounts payable turnover (d) Sales to total assets (x) 41.5 35.9 36.9 1 1 1 41.6 35.5 22.9 3.5 n/a n/a 1 n/a n/a 57.0% 1 22.6 3.3 1 16.4 3.4 1 1 1 0 Coverage AFS Ratios CashFlow PeerRatios PeerNorms n/a 1.71 1.16 n/a n/a 0 0 Coverage Traditional cash flow coverage Interest coverage (x) Fixed charge coverage (x) Dividend payout ratio (%) n/a n/a 7.0 5.1 2.9 n/a 1 1 1 8.3 3.7 1.0 n/a 1 0 0 n/a n/a n/a 8.1% 42.0% n/a n/a 1 1 1 1 1 Earnings EBI ($000s) EBIT ($000s) EBITD ($000s) EBITDA ($000s) 1 1 1 31,800 31,800 37,800 37,800 23,000 23,000 30,000 30,000 11,000 11,000 18,500 18,500 1 1 1 1 1 1 21 21 21 Points 4.4 Total Quiz Points 8.3 FS Ratios CashFlow Peer Ratios PeerNorms Green=correct, Red=incorrect 2018 2019 2018 2019 18,446 7,143 7,000 7,500 1 POSH FURNITURE BALANCE SHEET CASH FLOW FOR THE YEAR ENDING Cash Flow from Operating Activities Net income Adjustments to reconcile net income to net cash Depreciation Changes in current assets and current liabilities Accounts receivable (increase) decrease Inventory (increase) decrease Accounts payable-trade increase (decrease) Income taxes payable increase (decrease) Accrued bonuses increase (decrease) Net cash provided by operating activities 0 3,000 2,000 1,000 -2,000 - 12,000 1,000 5,000 - 1,000 ol 0 n/a n/a Cash Flow from Investing Activities Proceeds from sale of equipment Capital expenditures Net cash provided by investing activities n/a -9,000 n/a -13,000 1 0 0 0 0 - 12,000 6,500 Cash Flow from Financing Activities Proceeds from sale of stock Proceeds from short-term debt Proceeds from subordinated debt Payment under capital lease obligations Dividends paid Net cash provided by financing activities 0 0 n/a n/a 1 -1,500 -3,000 0 Sum of net cash flows (net change in cash) -5.000 -1,000 AFS Ratios CashFlow Peer Ratios PeerNorms 0 1 1 -12,000 6,500 1 1 Cash Flow from Financing Activities Proceeds from sale of stock Proceeds from short-term debt Proceeds from subordinated debt Payment under capital lease obligations Dividends paid Net cash provided by financing activities 0 0 n/a n/a -1,500 -3,000 1 1 0 0 1 1 Sum of net cash flows (net change in cash) Cash at beginning of year Cash at end of year -5,000 10,000 5,000 -1,000 5,000 4,000 1 1 1 1 14 14 Points 3.9 FS Ratios CashFlow PeerRatios PeerNorms +
