Following are the information given for Cafes Richard Bangladesh

Cafs Richard Bangladesh

2020 Income Statement

Net sales Tk. 5,680,000

Cost of goods sold (4,060,000)

Depreciation (420,000)

Earnings before interest and taxes 1,200,000

Less: Interest paid (30,000)

Taxable Income 1,170,000

Less: Taxes (410,000)

Net income Tk. 760,000

Dividends 500,000

Cafs Richard Bangladesh

Comparative Balance Sheets

2019 20202019 2020

Cash70,000180,000Accounts pay.1,350,0001,170,000

Accounts rec.980,000 840,00Long-term debt 720,000 500,000

Inventory1,560,0001,990,000Common stock 3,200,000 3,500,000

Total Current

Assets 2,610,0003,010,00Retained earnings 940,000 1,200,000

Net fixed assets 3,600,0003,360,000

Total assets6,210,000 6,370,000Total liabilities & equity6,210,000 6,370,000

Required :

a. Calculate cash flow from assets for 2020;

b. What is the Internal Growth rate for Gloria Jeans BD? What is the sustainable growth rate for Gloria

Jeans BD? If sales grow at SGR, how much External Financing will be needed for the year 2021 using

Percentage of sales approach, assuming that the firm is operating at full capacity? Interest expense and

tax rate will not change. Calculate the tax rate (hint: tax rate = tax/taxable income). Please create pro

forma statements as well. What's the impact in the new Debt to equity ratio, if any?

(4+4+4+4=17)

c. Comment on the liquidity position of the company using current ratio, quick ratio, and cash ratio for

2020 only.

d. Choose a company from the following list and comment on their market position. Your answer must be

in essay format. Address the following issues in your answer:

Choose any one of the following: Tesla, Amazon, Netflix, Zoom, Starbucks. You should get

company information from either yahoo finance or WSJ markets.

The P/E

Is the stock expensive? Yes or No? Justify your answer

How many years will it take to recover the investment if earnings remain the same?

Will the stock price go up or down?