Instructions:

Using the Wally's Soda and Drug income statements and balance sheets (2012-2016), complete the following items;

1.) Construct a statement of cash flows for 2013 to 2016.

2.) Perform common-size, horizontal, ratio, and cross sectional analysis on the company.

3.) Write a brief memo (2 page max) about your conclusions about the company's financial strength. Attach your cash flow statements and analysis to the memo as an addendum.

Wally's Drug & Soda Shop Annual Income Statements Fiscal Year Ending December 31 Report Prepared by: {YOUR NAME HERE} Revenue Cost of revenue Gross profit Operating expenses Depreciation & amortization expenses Operating income (EBIT) Interest Expense Other income (expense) Income before taxes (EBT) Provision for income taxes Net income 2012 $422,020 304,140 117,880 88,820 4,820 24,240 0 320 24,560 8,960 $15,600 2013 $474,090 342,400 131,690 98,950 5,720 27,020 0 530 27,550 10,040 $17,510 Actuals 2014 $537,620 385,180 152,440 114,170 6,760 31,510 0 380 31,890 11,480 $20,410 Supplemental Income Data Earnings per share Shares Outstanding Tax Rate (Actual and Forecasted) EBITDA 2012 $1.53 10,200 36.5% $29,060 2013 $1.73 10,100 36.4% $32,740 2014 $2.04 9,990 36.0% $38,270 Fiscal Year Ending 12/31 Exam #3: Valuation FINA-401-001 2015 $590,340 423,910 166,430 123,620 8,400 34,410 110 0 34,300 12,730 $21,570 2016 $633,350 457,220 176,130 133,910 9,750 32,470 830 0 31,640 11,580 $20,060 2015 $2.18 9,910 37.1% $42,810 2016 $2.03 9,900 36.6% $42,220 Report as of 02/03/2017 Wally's Drug & Soda Shop Annual Balance Sheets Fiscal Year Ending December 31 Report Prepared by: {YOUR NAME HERE} Fiscal Year Ending 12/31 Assets Cash & Cash Equivalents Receivables Inventories Other current assets Total current assets 2012 2013 Actuals 2014 10,720 13,960 55,930 2,560 $83,170 13,350 20,630 60,500 2,570 $97,050 2,550 22,360 67,900 2,290 $95,100 4,430 25,270 72,490 2,140 $104,330 25,870 24,960 67,890 1,770 $120,490 Property, plant and equipment, Gross Accumulated Depreciation Property, plant and equipment, net Other non-current assets Total assets 81,500 (19,850) 61,650 1,270 $146,090 92,870 (23,380) 69,490 4,770 $171,310 109,760 (27,770) 81,990 16,040 $193,130 129,180 (31,430) 97,750 22,020 $224,100 142,900 (34,880) 108,020 22,910 $251,420 Accounts payable Notes Payable Accrued liabilities Other current liabilities Total current liabilities 29,180 0 14,920 710 $44,810 40,390 0 8,780 8,390 $57,560 37,330 8,780 10,100 11,220 $67,430 42,890 830 22,720 0 $66,440 43,080 150 24,060 400 $67,690 Long-term debt Other long-term liabilities Total liabilities 0 12,380 $57,190 0 12,590 $70,150 0 14,660 $82,090 13,370 15,600 $95,410 23,360 16,610 $107,660 2015 2016 Liabilities Stockholders' equity Exam #3: Valuation FINA-401-001 Report as of 02/03/2017 Common stock Additional paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity Supplemental Balance Sheet Data Total interest bearing debt Investment in PP&E Debt-to-Total Assets Ratio (Actual & Forecasted) Equity-to-Total Assets Ratio (Actual & Forecasted) Exam #3: Valuation 800 5,650 82,450 $88,900 $146,090 800 5,580 94,780 $101,160 $171,310 800 5,590 104,650 $111,040 $193,130 800 5,750 122,140 $128,690 $224,100 800 6,050 136,910 $143,760 $251,420 2012 $0 --0.0% 100.0% 2013 $0 $11,370 0.0% 100.0% 2014 $8,780 $16,890 4.5% 95.5% 2015 $14,200 $19,420 6.3% 93.7% 2016 $23,510 $13,720 9.4% 90.6% FINA-401-001 Report as of 02/03/2017