Joshua & White Technologies: December 31 Balance Sheets

(Thousands of Dollars)

Assets20192018

Cash and cash equivalents$21,000$20,000

Short-term investments3,7593,240

Accounts Receivable52,50048,000

Inventories84,00056,000

Total current assets$161,259$127,240

Net fixed assets223,097200,000

Total assets$384,356$327,240

Liabilities and equity

Accounts payable$33,600$32,000

Accruals12,60012,000

Notes payable19,9296,480

Total current liabilities$66,129$50,480

Long-term debt67,66258,320

Total liabilities$133,791$108,800

Common stock178,440178,440

Retained Earnings72,12540,000

Total common equity$250,565$218,440

Total liabilities and equity $384,356$327,240

Joshua & White Technologies December 31 Income Statements-PLEASE ANSWER ALL PARTSAND QUESTION MARKS

(Thousands of Dollars) 2019 2018

Sales $420,000$400,000

COGS except excluding depr. and amort. 300,000298,000

Depreciation and Amortization 19,66018,000

Other operating expenses 27,60022,000

EBIT $72,740$62,000

Interest Expense 5,740 4,460

EBT $67,000$57,540

Taxes (25%) 16,750 14,385

Net Income $50,250$43,155

Common dividends $18,125$17,262

Addition to retained earnings $32,125 $17,262

Other Data 2019 2018

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 2019 2018 Industry Avg

Liquidity Ratios

Current Ratio ? ? 2.58

Quick Ratio ? ? 1.53

Asset Management Ratios

Inventory Turnover (Total COGS/Inventories). ? ? 7.69

Days Sales Outstanding ? ? 47.45

Fixed Assets Turnover ? ? 2.04

Total Assets Turnover ? ? 1.23

Debt Management Ratios

Debt Ratio (Total debt-to-assets) ? ? 20.0%

Liabilities-to-assets ratio ? ? 32.1%

Times-interest-earned ratio ? ? 15.33

EBITDA coverage ratio ? ? 4.18

Profitability Ratios

Profit Margin ? ? 8.86%

Basic Earning Power ? ? 19.48%

Return on Assets ? ? 10.93%

Return on Equity ? ? 16.10%

Market Value Ratios

Earnings per share ? ? NA

Price-to-earnings ratio ? ? 10.65

Cash flow per share ? ? NA

Price-to-cash flow ratio ? ? 7.11

Book Value per share ? ? NA

Market-to-book ratio ? ? 1.72

a. Has Joshua & White's liquidity position improved or worsened? Explain.

b. Has Joshua & White's ability to manage its assets improved or worsened? Explain.

c. How has Joshua & White's profitability changed during the last year?

d. Perform an extended Du Pont analysis for Joshua & White for each year. ROE= PM TA Turnover x Equity Multiplier

2019 20.05% 11.96% 1.09 1.53

2018 19.76% 10.79% 1.22 1.50

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 2019 2018

Cash and cash equivalents??

Short-term investments??

Accounts Receivable??

Inventories??

Total current assets??

Net fixed assets??

Total assets??

Liabilities and equity 2019 2018

Accounts payable??

Accruals??

Notes payable??

Total current liabilities??

Long-term debt??

Total liabilities??

Common stock??

Retained Earnings??

Total common equity??

Total liabilities and equity??

Common Size Income Statements 2019 2018

Sales??

COGS except excluding depr. and amort.??

Depreciation and Amortization??

Other operating expenses??

EBIT??

Interest Expense??

EBT??

Taxes (25%)??

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 2019 2018

Cash and cash equivalents??

Short-term investments??

Accounts Receivable??

Inventories??

Total current assets??

Net fixed assets??

Total assets??

Base

Liabilities and equity 2019 2018

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 2019 2018

Sales??

COGS except excluding depr. and amort.??

Depreciation and Amortization??

Other operating expenses??

EBIT??

Interest Expense??

EBT??

Taxes (25%)??

Net Income??