Notes Based on year-end balance sheet figures. Calculation is based on a 365-day year. SPREADSHEET PROBLEM (3-15) Analysis Start with the partial model in the file Ch03 P15 Build a Model.XIS From the textDOORS Web site. Joshua & White (J&W) Technology's financial statements are also shown here. Answer the following questions. (Note: Industry average ratios are provided in Ch03 P15 Build a Model.xlsx.) a. Has J&W's liquidity position improved or worsened? Explain. b. Has J&W's ability to manage its assets improved or worsened? Explain. c. How has J&W's profitability changed during the last year? d. Perform an extended DuPont analysis for J&W for 2015 and 2016. What do these results tell you? e. Perform a common size analysis. What has happened to the composition (that is, percentage in each category) of assets and liabilities? f. Perform a percentage change analysis. What does this tell you about the change in profitability and asset utilization? 133 Chapter 3 Analysis of Financial Statements Assets Accounts receivable Inventories Joshua & White Technology: December 31 Balance Sheets (Thousands of Dollars) 2016 2015 Liabilities Equity 2016 Cash $ 21,000 $20,000 Accounts payable $ 33,600 3,759 Short-term investments 3,240 Accruals 12,600 52,500 48,000 Notes payable 19,929 84,000 56,000 Total current liabilities $ 66,129 Total current assets $161.259 $127,240 Long-term debt 67,662 Net fixed assets 218,400 200,000 Total liabilities $133,791 Total assets $379,659 $327,240 Common stock 183,793 Retained earnings 62,075 Total common equity $245,868 Total liabilities & equity $379,659 2015 $ 32,000 12,000 6,480 $ 50,480 58,320 $108.800 178,440 40,000 $218,440 $327,240 Joshua & White Technology: Income Statements for Years Ending December 31 (Thousands of Dollars) 2016 2015 $400,000 Sales $420,000 COGS excluding depr. & amort. 300,000 298,000 Depreciation and amortization 18,000 19,660 Other operating expenses 27,600 22,000 $ 62,000 $ 72,740 EBIT Interest expense 5,740 4,460 EBT $ 67,000 $ 57,540 Taxes (40%) 26,800 23,016 Net income $ 40,200 $ 34,524 Common dividends $ 18,125 $ 17,262 Other Data Year-end stock price Number of shares (Thousands) Lease payment (Thousands of Dollars) Sinking fund payment (Thousands of Dollars) 2016 $ 90.00 4,052 $20,000 $ 5,000 2015 $ 96.00 4,000 $20,000 $ 5,000 MINI CASE