H.J. Boswell, Inc., Income Statement(millions, except per share data) for the Year Ended December 31, 2016 Sales $2,700.00 Cost of goods sold (2,025.00) Gross profit $ 675.00 Operating expenses: Selling expense $190.00) General and administrative expense (67.50) Depreciation and amortization expense (135.00) Total operating expenses (292.50) Net operating income (EBIT, or earnings before interest and taxes) $382.50 Interest expense (67.50) Earnings before taxes $ 315.00 Income taxes (110.25) Net income $ 204.75 Additional information: Dividends paid to stockholders during 2016 $ 45.00 Number of common shares outstanding 90.00 Earnings per share (EPS) $2.28 Dividends per share $0.50 1 H.J. Boswell, Inc., Balance Sheets (5 millions, except per share data) for the Year Ended December 31, 2016 Assets Liabilities and Stockholders' Equity 2015 2016 2015 2016 Cash $ 94.50 $ 90.00 Accounts payable $184.50 $ 189,00 Accounts 139.50 162.00 Accrued expenses 45.00 45.00 Receivable Inventory 229.50 378.00 Short-term notes 63.00 54.00 Other current 13.50 13.50 Total current liabilities $ 292.50 $288.00 assets Total current assets $ 477.00 $ 643.50 Long-term debt 720.00 771.75 Gross plant and 1,669.50 1,845.00 Total liabilities $1,012.50 S1,059.75 equipment Less accumulated (382.50) (517.50) Common stockholders' equity depreciation $1,287.00 $1,327.50 Common stock-par value 45.00 45.00 Net plant and equipment Paid-in capital 324.00 324.00 Retained earnings 382.50 542.25 $ 751.50 $911.25 Total common stockholders' equity Total assets $1,764.00 $1.971.00 S1,764.00 $1,971.00 Total liabilities and stockholders' equity H.J. Boswell, Inc. Cash flow statements (S millions, except per share data) for the Year Ended December 31, 2016 Ending cash balance for 2015 (beginning cash balance for 2016) $94.50 Operating activities Net income $204.75 Increase in accounts receivable (22.50) Increase in inventory (148.50) No change in other current assets 0.00 Depreciation expense 135.00 Increase in accounts payable 4.50 No change in accrued expenses 0.00 Cash flow from operating activities $ 173.25 Investing activities Purchases of plant and equipment (175.50) Cash flow from investing activities (175.50) Financing activities Decrease in short-term notes (9.00) Increase in long-term debt 51.75 Cash dividends paid to shareholders S (45.00) Cash flow from financing activities (2.25) Increase (decrease) in cash during the year S (4.50) Ending cash balance for 2016 $90.00 3 Peer Group Current ratio Acid-Test (or Quick) Ratio Average collection period Account receivable turnover Inventory turnover Debt ratio Times interest camned Total asset turnover Fixed asset turnover Gross profit margin Operating profit margin (OPM) Net profit margin (NPM) Operating return on asset (OROA) Return on equity Price earnings ratio Market-to-book ratio 1.8 times 0.94 times 25 days 14.6 times 7 times 35% 7 times 1.15 times 1.75 times 28.2% 15.5% 10.2% 17.8% 18% 12 times 2.7 times Market price per share - $ 32 H.J. Boswell, Inc., Income Statement(millions, except per share data) for the Year Ended December 31, 2016 Sales $2,700.00 Cost of goods sold (2,025.00) Gross profit $ 675.00 Operating expenses: Selling expense $190.00) General and administrative expense (67.50) Depreciation and amortization expense (135.00) Total operating expenses (292.50) Net operating income (EBIT, or earnings before interest and taxes) $382.50 Interest expense (67.50) Earnings before taxes $ 315.00 Income taxes (110.25) Net income $ 204.75 Additional information: Dividends paid to stockholders during 2016 $ 45.00 Number of common shares outstanding 90.00 Earnings per share (EPS) $2.28 Dividends per share $0.50 1 H.J. Boswell, Inc., Balance Sheets (5 millions, except per share data) for the Year Ended December 31, 2016 Assets Liabilities and Stockholders' Equity 2015 2016 2015 2016 Cash $ 94.50 $ 90.00 Accounts payable $184.50 $ 189,00 Accounts 139.50 162.00 Accrued expenses 45.00 45.00 Receivable Inventory 229.50 378.00 Short-term notes 63.00 54.00 Other current 13.50 13.50 Total current liabilities $ 292.50 $288.00 assets Total current assets $ 477.00 $ 643.50 Long-term debt 720.00 771.75 Gross plant and 1,669.50 1,845.00 Total liabilities $1,012.50 S1,059.75 equipment Less accumulated (382.50) (517.50) Common stockholders' equity depreciation $1,287.00 $1,327.50 Common stock-par value 45.00 45.00 Net plant and equipment Paid-in capital 324.00 324.00 Retained earnings 382.50 542.25 $ 751.50 $911.25 Total common stockholders' equity Total assets $1,764.00 $1.971.00 S1,764.00 $1,971.00 Total liabilities and stockholders' equity H.J. Boswell, Inc. Cash flow statements (S millions, except per share data) for the Year Ended December 31, 2016 Ending cash balance for 2015 (beginning cash balance for 2016) $94.50 Operating activities Net income $204.75 Increase in accounts receivable (22.50) Increase in inventory (148.50) No change in other current assets 0.00 Depreciation expense 135.00 Increase in accounts payable 4.50 No change in accrued expenses 0.00 Cash flow from operating activities $ 173.25 Investing activities Purchases of plant and equipment (175.50) Cash flow from investing activities (175.50) Financing activities Decrease in short-term notes (9.00) Increase in long-term debt 51.75 Cash dividends paid to shareholders S (45.00) Cash flow from financing activities (2.25) Increase (decrease) in cash during the year S (4.50) Ending cash balance for 2016 $90.00 3 Peer Group Current ratio Acid-Test (or Quick) Ratio Average collection period Account receivable turnover Inventory turnover Debt ratio Times interest camned Total asset turnover Fixed asset turnover Gross profit margin Operating profit margin (OPM) Net profit margin (NPM) Operating return on asset (OROA) Return on equity Price earnings ratio Market-to-book ratio 1.8 times 0.94 times 25 days 14.6 times 7 times 35% 7 times 1.15 times 1.75 times 28.2% 15.5% 10.2% 17.8% 18% 12 times 2.7 times Market price per share - $ 32