| | | | | | | | | Joshua & White Technologies: December 31 Balance Sheets | | | | (Thousands of Dollars) | | | | | | | | | | | | | | | Assets | | | 2016 | 2015 | | | | Cash and cash equivalents | $21,000 | $20,000 | | | | Short-term investments | | 3,759 | 3,240 | | | | Accounts Receivable | | 52,500 | 48,000 | | | | Inventories | | | 84,000 | 56,000 | | | | Total current assets | | $161,259 | $127,240 | | | | Net fixed assets | | 218,400 | 200,000 | | | | Total assets | | $379,659 | $327,240 | | | | | | | | | | | | Liabilities and equity | | | | | | | Accounts payable | | $33,600 | $32,000 | | | | Accruals | | | 12,600 | 12,000 | | | | Notes payable | | 19,929 | 6,480 | | | | Total current liabilities | | $66,129 | $50,480 | | | | Long-term debt | | 67,662 | 58,320 | | | | Total liabilities | | $133,791 | $108,800 | | | | Common stock | | 183,793 | 178,440 | | | | Retained Earnings | | 62,075 | 40,000 | | | | Total common equity | | $245,868 | $218,440 | | | | Total liabilities and equity | $379,659 | $327,240 | | | | | | | | | | | | Joshua & White Technologies December 31 Income Statements | | | | (Thousands of Dollars) | | | | | | | | | | 2016 | 2015 | | | | Sales | | | $420,000 | $400,000 | | | | COGS except excluding depr. and amort. | 300,000 | 298,000 | | | | Depreciation and Amortization | 19,660 | 18,000 | | | | Other operating expenses | 27,600 | 22,000 | | | | EBIT | | | $72,740 | $62,000 | | | | Interest Expense | | 5,740 | 4,460 | | | | EBT | | | $67,000 | $57,540 | | | | Taxes (40%) | | 26,800 | 23,016 | | | | Net Income | | $40,200 | $34,524 | | | | | | | | | | | | Common dividends | | $18,125 | $17,262 | | | | Addition to retained earnings | $22,075 | $17,262 | | | | | | | | | | | | Other Data | | | 2016 | 2015 | | | | Year-end Stock Price | | $90.00 | $96.00 | | | | # of shares (Thousands) | 4,052 | 4,000 | | | | Lease payment (Thousands of Dollars) | $20,000 | $20,000 | | | | Sinking fund payment (Thousands of Dollars) | $5,000 | $5,000 | | | | | | | | | | | | Ratio Analysis | | 2016 | 2015 | Industry Avg | | | Liquidity Ratios | | | | | | | Current Ratio | | 2.44 | 2.52 | 2.58 | | | Quick Ratio | | 1.17 | 1.41 | 1.53 | | | Asset Management Ratios | | | | | | Inventory Turnover (Total COGS/Inventories) | 5.00 | 7.14 | 7.69 | | | Days Sales Outstanding | 45.61 | 44.00 | 47.45 | | | Fixed Assets Turnover | | 1.92 | 2.00 | 2.04 | | | Total Assets Turnover | | 1.11 | 1.22 | 1.23 | | | Debt Management Ratios | | | | | | Debt Ratio (Total debt-to-assets) | 27.2% | 24.9% | 20.0% | | | Liabilities-to-assets ratio | 35.2% | 33.0% | 32.1% | | | Times-interest-earned ratio | 12.67 | 13.90 | 15.33 | | | EBITDA coverage ratio | 3.66 | 3.39 | 4.18 | | | Profitability Ratios | | | | | | | Profit Margin | | 9.57% | 8.63% | 8.86% | | | Basic Earning Power | | 19.16% | 18.95% | 19.48% | | | Return on Assets | | 10.58% | 10.55% | 10.93% | | | Return on Equity | | 15.00% | 14.64% | 16.10% | | | Market Value Ratios | | | | | | | Earnings per share | | $5.44 | $4.32 | NA | | | Price-to-earnings ratio | | 16.54 | 22.22 | 10.65 | | | Cash flow per share | | $22.80 | $20.00 | NA | | | Price-to-cash flow ratio | 3.95 | 4.80 | 7.11 | | | Book Value per share | | $126.80 | $113.54 | NA | | | Market-to-book ratio | | 0.71 | 0.85 | 1.72 | | | | | | | | | | | a. Has Joshua & White's liquidity position improved or worsened? Explain. | | | Joshua & White's liquidity position has worsened from the year 2015. Liquidity position of a firm is measured by current ratio and quick ratio both of which has declined in the year 2016 as compared to the year 2015. | | | | | | | | | | b. Has Joshua & White's ability to manage its assets improved or worsened? Explain. | | Joshua & White's ability to manage its assets has worsened from the year 2015. Management of assets in a firm is measured by asset management ratios. In the year 2016 as compared to 2015 all the asset management ratio have declined and no were close to industry average thus signalling poor management of its assets. | | | | | | | | | | c. How has Joshua & White's profitability changed during the last year? | | | Profitability position of Joshua and White has increased in 2016 when compared to last year that is 2015 which is clearly reflected in the profitability ratios mentioned above. | | | | | | | | | | d. Perform an extended Du Pont analysis for Joshua & White for 2008 and 2009. | | | | ROE = | PM x | TA Turnover x Equity Multiplier | | | 2016 | 15.00% | 9.57% | 1.11 | 1.42 | | | | 2015 | 14.64% | 8.63% | 1.22 | 1.39 | | | | | | | | | | | | | | | | | | | | | | e. Perform a common size analysis. What has happened to the composition | | | (that is, percentage in each category) of assets and liabilities? | | | | | | | | | | | | Common Size Balance Sheets | | | | | | Assets | | | 2016 | 2015 | | | | Cash and cash equivalents | 13.0% | 15.7% | | | | Short-term investments | | 2.3% | 2.6% | | | | Accounts Receivable | | 32.6% | 37.7% | | | | Inventories | | | 52.1% | 44.0% | | | | Total current assets | | 42.5% | 38.9% | | | | Net fixed assets | | 57.5% | 61.1% | | | | Total assets | | 100.0% | 100.0% | | | | | | | | | | | | Liabilities and equity | | 2016 | 2015 | | | | Accounts payable | | 50.8% | 63.4% | | | | Accruals | | | 19.1% | 23.8% | | | | Notes payable | | 30.1% | 12.8% | | | | Total current liabilities | | 49.4% | 46.4% | | | | Long-term debt | | 50.6% | 53.6% | | | | Total liabilities | | 100.0% | 100.0% | | | | Common stock | | | | | | | Retained Earnings | | | | | | | Total common equity | | | | | | | Total liabilities and equity | | | | | | | | | | | | | | Common Size Income Statements | 2016 | 2015 | | | | Sales | | | | | | | | COGS except excluding depr. and amort. | | | | | | Depreciation and Amortization | | | | | | Other operating expenses | | | | | | EBIT | | | | | | | | Interest Expense | | | | | | | EBT | | | | | | | | Taxes (40%) | | | | | | | Net Income | | | | | | | | | | | | | | | | | | | | | | | | | f. Perform a percent change analysis. What does this tell you about the change in profitability | | and asset utilization? | | | | | | | | | | | | | | Percent Change Balance Sheets | | Base | | | | Assets | | | 2016 | 2015 | | | | Cash and cash equivalents | | | | | | Short-term investments | | | | | | | Accounts Receivable | | | | | | | Inventories | | | | | | | | Total current assets | | | | | | | Net fixed assets | | | | | | | Total assets | | | | | | | | | | | | | | | | | | | Base | | | | Liabilities and equity | | 2016 | 2015 | | | | Accounts payable | | | | | | | Accruals | | | | | | | | Notes payable | | | | | | | Total current liabilities | | | | | | | Long-term debt | | | | | | | Total liabilities | | | | | | | Common stock | | | | | | | Retained Earnings | | | | | | | Total common equity | | | | | | | Total liabilities and equity | | | | | | | | | | | | | | | | | | Base | | | | Percent Change Income Statements | 2016 | 2015 | | | | Sales | | | | | | | | COGS except excluding depr. and amort. | | | | | | Depreciation and Amortization | | | | | | Other operating expenses | | | | | | EBIT | | | | | | | | Interest Expense | | | | | | | EBT | | | | | | | | Taxes (40%) | | | | | | | Net Income | | | | | | | | | | | | | | | | | | |
