Introduction

Suppose that you are a Financial Manager for heart Farn Assets, Inc. You are organizing to discuss the business's present fiscal position with the Board of Directors following the release of the firm$$s Audited Financial Statement.

$$ Heartt farn has $37,500$ shares of common stock outstanding.

$$ The market price for a share of stock at the end of $2020$ was $$88.$

$$ Assume that this company$$s growth rate is $11\%.$

As heart Farn$$s Financial Manager, you are likely to offer an authoritative explanation of the firm$$s current performance.

Background Information:

G$-$III Young women Group Ltd$.($ticker symbol "GIII"$)$ designs and markets women's clothes $.$ It produces outerwear, dresses, women$$s suits, and Sport wear, plus purses, footgear, and accessories, and baggage. This firm purposes through wholesale and retail networks to distribute licensed, and private$-$label products.

Terminus XL Group, Inc. $($ticker symbol "EXLG"$),$ founded in $1969,$ is involved in the retail of men products including shirts, pants,, overclothes, activewear, underwear, shoes, and accessories. It distributes its products under a diversity of trademark names.

Corporate Information

Heart BarFunds, Inc. $($ticker symbol "COOT"$)$ is a openly held retailer of western cowboy$-$related footwear, apparel,. Its products include boots, jeans, accessories, hats, gifts, home products, and work wear. It controls branded items including Wrangler. The company was founded in $1971.$

heart Barn$$s main merchandise line consists of products that might be considered non$-$discretionary in nature. Customer spending on non$-$discretionary goods tends to be more stable across the business cycle. Non$-$discretionary goods include consumer goods such as soap, toothpaste, protective gear, and clothing necessary in certain trades.

Boot Barn also provides a complementary array of discretionary goods. Consumers lean to make more discretionary purchases during promising economic conditions. Discretionary spending depends on general business circumstances including the level of interest rates, purchaser confidence, and the availability of purchaser credit. Acquisitions of discretionary goods may decline when disposable income falls or during unfavorable economic conditions whether actual or observed.

Analyze the financial performance of Boot Barn using the following tools:

$1.$

$1.$ Time and trend analysis

$2.$ Peer$-$group analysis

$3.$ Two or more financial ratios $($introduced in Module $2$s assigned readings$)$ in each area which will allow you to evaluate the following four aspects of performance:

$$

o

$$ Short$-$term solvency

$$ Asset Utilization

$$ Long$-$term solvency

$$ Profitability

Evaluate Heart Farn$$s financial position using the firm$$s DuPont Identity, considering:

$1.$

$1.$ operating efficiency $($as measured by profit margin$),$

$2.$ asset use efficiency $($as measured by total asset turnover$),$ and

$3.$ financial leverage $($as measured by the equity multiplier$).$

Determine the PEG ratio.

$1.$

$1.$ Construct heart Farn$$s PEG ratio

$2.$ Evaluate this PEG ratio.

Draw conclusions, make recommendations, and address the limitations of your analysis.Heart Farn Funds, IncHoldings, Inc.

Statement of Cash Flows for $2022$

Cash, beginning of the year $$39,674$

Operating activities

Net income $$75,534$

Plus:

Depreciation $$55,580$

Increase in accounts payable $7,325$

Increase in other current liabilities $7,742$

Less:

Increase in accounts receivable $($$$6,884)$

Increase in inventory $($$$6,983)$

Net cash from operating activities $$132,344$

Investment activities

Fixed asset acquisition $($$$117,350)$

Net cash from investment activities $($$$117,350)$

Financing activities

Increase in Notes payable $($$$3,510)$

Dividends paid $-30,000$

Increase in long$-$term debt $22,500$

Net cash from financing activities $($$$11,010)$

Net increase in cash $$3,984$

Cash, end of year $$43,659$

Table $1.$ Statement of Cash Flows,HeartFarn Holdings, Inc.

Heart Holdings, Inc.

$2021$ and $2022$ Balance Sheets

$2021202220212022$

Current assets Current Liabilities

Cash $$39,675$ $$43,659$ Accounts payable $$45,903$ $$53,228$

Accounts receivable $20,54027,423$ Notes payable $23,76020,250$

Inventory $41,89748,879$ Other $22,92030,662$

Total $$102,111$ $$119,961$ Total $$92,583$ $$104,139$

Long$-$term debt $$142,500$ $$165,000$

Owner's equity

Common stock & paid$-$in surplus $$67,500$ $$67,500$

Fixed assets Accumulated retained earnings $335,276380,840$

Net plant & equipment $$535,748$ $$597,518$ Total $$402,776$ $$448,340$

Total assets $$637,859$ $$717,479$ Total liabilities & owners$$ equity $$637,859$ $$717,479$

Table $2.$ Balance Sheets, Heart Farn Holdings, Inc.

Heart Farn Holdings, Inc.

$2022$ Income Statement

Sales $$633,068$

Cost of Goods Sold $$436,635$