L NADEC Co. The National Agricultural Development Company (Nadec) is one of the largest agricultural and food-processing share stock companies in the Middle East and North Africa. Established in 1981 by royal decree, it is a joint stock public company -20% owned by the government of Saudi Arabia, with the rest publicly traded on the Saudi Stock Exchange. It is one of the very few and largest vertically integrated dairy businesses in the world. It has a head office located in Riyadh and it owns six dairy farms with around 60,000 cows and two modern dairy plants with a total capacity of 1.5 million liters of milk daily. Almarai Co. Almarai Company is a Saudi multinational dairy company which is listed on the Tadawul stock exchange. It specializes in food and beverage manufacturing and distribution. The company's main offices are located in Riyadh, Saudi Arabia. Almarai started its operations in 1977 and recently in 2011 announced that they would be investing heavily in Saudi Arabia to increase dairy production in the country. It was the first dairy farm in Saudi Arabia to be accredited with ISO 22000. Almarai also received the ISO 9001 2000, across all its operating divisions, (farming, procurement, I processing, technical research and development, distribution and supply chain. Ratio Analysis Formula Current ratio current current Assets liabilities Interpretation NADEC Co. Almarai Co. $22,1457 $52,150 $12,200 = $65,450 = 11.81 0.79 $59820 $420000 $8250 = $4350 = 7.21 times 96.5 times Accounts receivable turnover Net credit Average sales accounts receivable Interpretation Ratio Analysis Formula NADEC Co. Almarai Co. Current ratio current current $22,1457 $52,150 Assets liabilities $12,200 = $65,450 = 1.81 0.79 Accounts Net credit Average $59820 $420000 receivable sales laccounts $8250 = $4350 = turnover receivable 7.21 times 96.5 times Average 365 days Accounts 7.21\365 96,51365 collection period receivable 50.62 days 3.78 days turnover Inventory Cost of Average $41250 $282501 turnover goods sold inventory $7950= $34250= 5.18times 0.82 times Days in Cost of Cost of good 365 3651 inventory average sold 365 days 5.18= 0.82 = inventory 70.46 days 445 days Current cash Net cash Average current debt coverage provided by liability Operating activities Profit margin Net income Net sales *100 Asset turnover Net sales Average total lassets Return on assets Net Income Total assets 100 Return on Net income Average common common equity stockholders preference -100 equity dividend Debt to assets Total debt Total assets Times interest Earnings Interest expense earned before interest and taxes Cash debt Net cash Average total coverage provided by liability operating activities Free cash Net 4,415 27,200 1,520 11,450 Net Cash Provided by Operating Activities Capital Expenditures Dividends 475 4,140 Required: Compare the Solvency, Liquidity and Profitability position of the two companies by Calculating current ratio, Account Receivable Turnover, Average Collection Period (In Days) (365 days / Account Receivable Turnover), Inventory Turnover, Days in Inventory. Current Cash Debt Coverage (net cash provided by operating activities / average current liability). Profit Margin. Asset Turnover, Return on Assets, Return on Common Stockholder's Equity, Debt to Assets, Times Interest Earned, Cash Debt Coverage (net cash provided by operating activities / average total liability) and free Cash Flow (net cash provided by operating activities - Capital expenditures - cash dividends). Then state which company you think is better in short-term and why (Interpretation) and under the assumption that each company's stock can be purchased at book value, state which company's stock you think is better to invest and why (Interpretation) 4,415 27,200 1,520 11,450 Net Cash Provided by Operating Activities Capital Expenditures Dividends 475 4,140 Required: Compare the Solvency, Liquidity and Profitability position of the two companies by Calculating current ratio, Account Receivable Turnover, Average Collection Period (In Days) (365 days Account Receivable Turnover), Inventory Turnover, Days in Inventory, Current Cash Debt Coverage (net cash provided by operating activities / average current liability), Profit Margin, Asset Tumover, Return on Assets, Return on Common Stockholder's Equity, Debt to Assets, Times Interest Eamed, Cash Debt Coverage (net cash provided by operating activities / average total liability) and free Cash Flow (net cash provided by operating activities - Capital expenditures cash dividends). Then state which company you think is better in short-term and why (Interpretation) and under the assumption that each company's stock can be purchased at book value, state which company's stock you think is better to invest and why (Interpretation), Project's Instructions: 1- Small Introduction about two Companies (Half to One Page) (1 mark) - Need Sources (Note: You can use other sources from online websites) 2. Body - Ratio Analysis (8 Marks) 2.1 Include formulac 2.2 Calculate Ratios in Details 2.3 Fill the table with ratios (Answers of Ratios in Order) and Interpretation Ratio Analysis Formula NADEC Co. Almarai Co. Interpretation Following are data from the statements of two companies (NADEC Co. and Almarai Co.) Providing similar products: NADEC Co. $59,820 41,250 Almarai Co. $420,000 28,250 71,450 19,750 12,560 525 -72 -420 1,215 7,240 $3,025 $16,450 $22,145 25,845 Income Statement Data for 2020 Net Sales Cost of Goods Sold Selling and administrative expense Interest expense Other Income (Expense) Income Tax Expense Net Income Balance Sheets Data (End of 2020) Current Assets NonCurrent Assets Total Assets Current Liabilities Long-term Debt Total stockholders' Equity Total Liabilities and stockholders' Equity Beginning-of-2020 Balances Total Assets Total stockholders' Equity Current Liabilities Total Liabilities Other Data Average Net Accounts Receivable Average Inventory $52,150 132,540 $162,450 $65,450 $40,650 $12,200 16,890 48,540 13,900 69,870 $42,100 $174,890 $44,150 12,845 $171,050 64,870 55,745 9,998 29,250 105,400 $8,250 $4,350 7,950 34,250 L NADEC Co. The National Agricultural Development Company (Nadec) is one of the largest agricultural and food-processing share stock companies in the Middle East and North Africa. Established in 1981 by royal decree, it is a joint stock public company -20% owned by the government of Saudi Arabia, with the rest publicly traded on the Saudi Stock Exchange. It is one of the very few and largest vertically integrated dairy businesses in the world. It has a head office located in Riyadh and it owns six dairy farms with around 60,000 cows and two modern dairy plants with a total capacity of 1.5 million liters of milk daily. Almarai Co. Almarai Company is a Saudi multinational dairy company which is listed on the Tadawul stock exchange. It specializes in food and beverage manufacturing and distribution. The company's main offices are located in Riyadh, Saudi Arabia. Almarai started its operations in 1977 and recently in 2011 announced that they would be investing heavily in Saudi Arabia to increase dairy production in the country. It was the first dairy farm in Saudi Arabia to be accredited with ISO 22000. Almarai also received the ISO 9001 2000, across all its operating divisions, (farming, procurement, I processing, technical research and development, distribution and supply chain. Ratio Analysis Formula Current ratio current current Assets liabilities Interpretation NADEC Co. Almarai Co. $22,1457 $52,150 $12,200 = $65,450 = 11.81 0.79 $59820 $420000 $8250 = $4350 = 7.21 times 96.5 times Accounts receivable turnover Net credit Average sales accounts receivable Interpretation Ratio Analysis Formula NADEC Co. Almarai Co. Current ratio current current $22,1457 $52,150 Assets liabilities $12,200 = $65,450 = 1.81 0.79 Accounts Net credit Average $59820 $420000 receivable sales laccounts $8250 = $4350 = turnover receivable 7.21 times 96.5 times Average 365 days Accounts 7.21\365 96,51365 collection period receivable 50.62 days 3.78 days turnover Inventory Cost of Average $41250 $282501 turnover goods sold inventory $7950= $34250= 5.18times 0.82 times Days in Cost of Cost of good 365 3651 inventory average sold 365 days 5.18= 0.82 = inventory 70.46 days 445 days Current cash Net cash Average current debt coverage provided by liability Operating activities Profit margin Net income Net sales *100 Asset turnover Net sales Average total lassets Return on assets Net Income Total assets 100 Return on Net income Average common common equity stockholders preference -100 equity dividend Debt to assets Total debt Total assets Times interest Earnings Interest expense earned before interest and taxes Cash debt Net cash Average total coverage provided by liability operating activities Free cash Net 4,415 27,200 1,520 11,450 Net Cash Provided by Operating Activities Capital Expenditures Dividends 475 4,140 Required: Compare the Solvency, Liquidity and Profitability position of the two companies by Calculating current ratio, Account Receivable Turnover, Average Collection Period (In Days) (365 days / Account Receivable Turnover), Inventory Turnover, Days in Inventory. Current Cash Debt Coverage (net cash provided by operating activities / average current liability). Profit Margin. Asset Turnover, Return on Assets, Return on Common Stockholder's Equity, Debt to Assets, Times Interest Earned, Cash Debt Coverage (net cash provided by operating activities / average total liability) and free Cash Flow (net cash provided by operating activities - Capital expenditures - cash dividends). Then state which company you think is better in short-term and why (Interpretation) and under the assumption that each company's stock can be purchased at book value, state which company's stock you think is better to invest and why (Interpretation) 4,415 27,200 1,520 11,450 Net Cash Provided by Operating Activities Capital Expenditures Dividends 475 4,140 Required: Compare the Solvency, Liquidity and Profitability position of the two companies by Calculating current ratio, Account Receivable Turnover, Average Collection Period (In Days) (365 days Account Receivable Turnover), Inventory Turnover, Days in Inventory, Current Cash Debt Coverage (net cash provided by operating activities / average current liability), Profit Margin, Asset Tumover, Return on Assets, Return on Common Stockholder's Equity, Debt to Assets, Times Interest Eamed, Cash Debt Coverage (net cash provided by operating activities / average total liability) and free Cash Flow (net cash provided by operating activities - Capital expenditures cash dividends). Then state which company you think is better in short-term and why (Interpretation) and under the assumption that each company's stock can be purchased at book value, state which company's stock you think is better to invest and why (Interpretation), Project's Instructions: 1- Small Introduction about two Companies (Half to One Page) (1 mark) - Need Sources (Note: You can use other sources from online websites) 2. Body - Ratio Analysis (8 Marks) 2.1 Include formulac 2.2 Calculate Ratios in Details 2.3 Fill the table with ratios (Answers of Ratios in Order) and Interpretation Ratio Analysis Formula NADEC Co. Almarai Co. Interpretation Following are data from the statements of two companies (NADEC Co. and Almarai Co.) Providing similar products: NADEC Co. $59,820 41,250 Almarai Co. $420,000 28,250 71,450 19,750 12,560 525 -72 -420 1,215 7,240 $3,025 $16,450 $22,145 25,845 Income Statement Data for 2020 Net Sales Cost of Goods Sold Selling and administrative expense Interest expense Other Income (Expense) Income Tax Expense Net Income Balance Sheets Data (End of 2020) Current Assets NonCurrent Assets Total Assets Current Liabilities Long-term Debt Total stockholders' Equity Total Liabilities and stockholders' Equity Beginning-of-2020 Balances Total Assets Total stockholders' Equity Current Liabilities Total Liabilities Other Data Average Net Accounts Receivable Average Inventory $52,150 132,540 $162,450 $65,450 $40,650 $12,200 16,890 48,540 13,900 69,870 $42,100 $174,890 $44,150 12,845 $171,050 64,870 55,745 9,998 29,250 105,400 $8,250 $4,350 7,950 34,250