Integrative Problem 7-17 Donna Jamison was recently hired as a financial analyst by Computron Indus- tries, a manufacturer of electronic components. Her first task was to conduct a financial analysis of the firm covering the last two years. To begin, she gathered the following financial statements and other data: Balance Sheets 2015 2014 Assets Cash Accounts receivable Inventories Total current assets Gross fixed assets Less: Accumulated depreciation Net fixed assets Total assets $ 52,000 402,000 836.000 $1.290,000 $27.000 (166,200) S 360,800 $1,650.800 $ 57,600 351,200 715,200 $1,124,000 491,000 (146,200) S 344,800 $1,468,800 Liabilities and Equity Accounts payable Notes payable Accruals Total current liabilities Long-term debe Common stock (100,000 shares) Retained earnings Total equity Total liabilities and equity $ 175.200 225,000 140,000 $ 540,200 424,612 460.000 225.988 $ 685.988 S1650.800 $ 145,600 200,000 136,000 S481,600 323,432 460,000 203,768 $ 663,768 $1,468.800 Income Statements 2015 2014 Sales Cost of goods sold Other expenses Depreciation Total operating costs EBIT Interest expense Taxes (40%) Net income EPS $3,850,000 (3,250,000) ( 430,300) 20,000) $3,700,300 $ 149,700 (76,000) $ 73,700 29,480) $ 44,220 $ 0.442 $3,432,000 (2,864,000) (340,000) 18,900) $3,222,900 $ 209,100 ( 62,500) $ 146,600 58,640) S87,960 $ 0.880 Statement of Cash Flows (2015) $ 44,220 Operating Activities Net income Additions (sources of cash) Depreciation Increase in accounts payable Increase in accruals Subtractions (uses of cash) Increases in accounts receivable Increase in inventories Net cash flow from operations 20,000 29,600 4,000 (50,800) (120,800) $(73,780) Long-Term Investing and Financing Activities Investment in fixed assets Increase in notes payable Increase in long-term debt Payment of cash dividends Net cash flow from investing and financing Net reduction in cash account Cash at beginning of year Cash at end of year $(36,000) $ 25,000 101,180 ( 22,000) $ 68,180 $( 5,600) 57,600 S 52,000 2015 2014 Other Data December 31 stock price Number of shares Dividends per share Lease payments $ 6.00 100,000 $ 0.22 $ 40,000 $ 8.50 100,000 $ 0.22 $ 40,000 Industry Average Data for 2015 Ratio Industry Average Current Quick Inventory turnover Days sales outstanding (DSO) Fixed assets turnover Total assets turnover Debt ratio TIE Fixed charge coverage Net profit margin ROA ROE Pricelearnings Market/book 2.7x 1.0x 6.0x 32.0 days 10.7x 2.6% 50.0% 2.5% 2.1 x 3.5% 9.1% 18.2% 14.2x 1.4 x