MG770 - Financial Statement AnalysisName : ____________________________

Date : February 2015

Exam 1 (Problem Solving)ID Number: ________________________

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Exam has four parts calculation : [1] Common Size for Income Statement; [2] Comparative Size for Balance Sheet; [3] Statement of cash flow with indirect method; [4] Ratio analysis.

Instruction:You need to show your clear calculation to support each statement provide a paragraph of interpretation related to the result of your analysis on each statement.

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Question 1: Common size for income statement

Income Statement (Common Size) :

Consolidated Income Statement

2011

%

2010

%

Revenue

$19,176.1

$18,627.0

Cost of sales

( 10,571.7)

(10,239.6 )

Gross Profit

8,604.4

8,387.4

Selling and administrative expenses

(6,149.6)

(5,953.7)

Restructuring charges

(195.0)

0.0

Goodwill impairment

(199.3)

0.0

Intangible and other asset impairment

(202.0)

0.0

Other income (expenses)

88.5

(7.9 )

Operating Income

$1,947.0

$ 2,425.8

Interest and other income

49.7

115.8

Interest expense

(40.2)

(38.7)

Income before income taxes

$1,956.5

$ 2,502.9

Provision for income taxes

(469.8)

(619.8)

Net Income

$1,486.7

$ 1,883.4

Question 2:Comparative Analysis for balance sheet:

2011

2010

Difference

% changed

ASSETS:

Current Assets

Cash and equivalents

$ 2,291.1

$ 2,133.9

Short-term investments

1,164.2

642.2

Account receivable

2,883.9

2,795.3

Inventory

2,357.0

2,438.4

Prepaid expenses and other assets

765.6

602.3

Deferred income taxes, net

272.4

227.2

Total Current Assets

$ 9,734.0

$ 8,839.3

Property and equipment, gross

4,255.7

4,103.0

Accumulated depreciation

(2,221.9)

(2,298.0)

Property and equipment, net

$ 1,957.7

$ 1,891.1

Identifiable intangible assets

467.4

743.1

Good will

193.5

448.8

Deferred income taxes and other assets

897.0

520.4

Total Assets

$13,249.6

$12,442.7

Liabilities and Stockholders' Equity

Current Liability :

Current portion of long-term debt

$32.0

$6.3

Note Payable

342.9

177.7

Account Payable

1,031.9

1,287.6

Accrued liabilities

1,783.9

1,761.9

Income taxes payable

86.3

88.0

Total Current Liabilities

$3,277.0

$3,321.5

Long term debt

437.2

441.1

Deferred taxes and other long-term liabilities

842.0

854.5

Total Liabilities

$4,556.2

$4,617.1

Redeemable preferred stock

$0.3

$0.3

Common Shareholders' Equity

Common stock

2.8

2.8

Capital in excess of stated value

$2,781.4

$ 2,497.8

Retained earnings

5,451.4

5,073.3

Accumulated other comprehensive income

367.5

251.4

Total Common Shareholders' Equity

$ 8,693.1

$ 7,825.3

Total Liabilities and Shareholders' Equity

$13,249.6

$12,442.7

Question 3 :Please create a statement of cash flow with indirect method

Statement of Cash Flow with Indirect method

2011

2010

Difference

Operating

Investing

Financing

ASSETS:

Current Assets

Cash and equivalents

$ 2,291.1

$ 2,133.9

Short-term investments

1,164.2

642.2

Account receivable

2,883.9

2,795.3

Inventory

2,357.0

2,438.4

Prepaid expenses and other assets

765.6

602.3

Deferred income taxes, net

272.4

227.2

Total Current Assets

$ 9,734.0

$ 8,839.3

Property and equipment, gross

4,255.7

4,103.0

Accumulated depreciation

(2,221.9)

(2,298.0)

Property and equipment, net

$ 1,957.7

$ 1,891.1

Identifiable intangible assets

467.4

743.1

Good will

193.5

448.8

Deferred income taxes and other assets

897.0

520.4

Total Assets

$13,249.6

$12,442.7

Liabilities and Stockholders' Equity

Current Liability :

Current portion of long-term debt

$32.0

$6.3

Note Payable

342.9

177.7

Account Payable

1,031.9

1,287.6

Accrued liabilities

1,783.9

1,761.9

Income taxes payable

86.3

88.0

Total Current Liabilities

$3,277.0

$3,321.5

Long term debt

437.2

441.1

Deferred taxes and other long-term liabilities

842.0

854.5

Total Liabilities

$4,556.2

$4,617.1

Redeemable preferred stock

$0.3

$0.3

Common Shareholders' Equity

Common stock

2.8

2.8

Capital in excess of stated value

$2,781.4

$ 2,497.8

Retained earnings

5,451.4

5,073.3

Accumulated other comprehensive income

367.5

251.4

Total Common Shareholders' Equity

$ 8,693.1

$ 7,825.3

Total Liabilities and Shareholders' Equity

$13,249.6

$12,442.7

Question 4:

Ration Analysis: Please the interpretation on each ratio analysis.

1. Return on Asset
2. Debt to assets ratio
3. Profit margin
4. Account receivable turnover & accounting receivable turnover
5. Inventory turnover & days of inventory turnover