Please answer these 1-5 questions

1.Use the following information to analyze BobKat Equipment Sales. Calculate any profit measures deemed necessary in order to discuss the profitability of the company.

BobKat Equipment Sales

Income Statement

For the Years Ended Dec. 31, 2015 and 2014

2015 2014

Net sales $124,000 $138,000

COGS 90,000 95,000

Gross profit $ 34,000 $ 43,000

General and administrative expenses 31,000 36,000

Operating profit $ 3,000 $ 7,000

Interest expense (1,000) (1,000)

Earnings before taxes $ 2,000 $ 6,000

Income taxes 800 1,800

Net income $ 1,200 $ 4,200

2. Analyze the common size income statements below for Coast Company:

(in percent)	2015	2014
Net sales	100	100
COGS	62	65
Gross margin	38	35
Research and development	9	5
Selling, general and administrative	11	17
Restructuring, asset impairments and other charges	1	8
Income/(loss) from operations	17	5
Interest expense	(3)	(1)
Income/(loss) before taxes	14	4
Provision for/(benefit from) income taxes	4	1
Net income/(loss)	10	3

3. Analyze the common size income statements below for 3T Company:

	2015	2014
Net sales	100%	100%
COGS	89	87
Gross margin	11%	13%
Selling, general and administrative	7	9
Restructuring, asset impairments and other charges	0	9
Income/(loss) from operations	4%	(5)%
Interest expense	(1)	(2)
Income/(loss) before taxes	3%	(7%)
Provision for/(benefit from) income taxes	1	0
Income/(loss) after taxes	2%	(7)%
Discontinued operations, net	6	1
Net income (loss)	8%	(6)%

4. The following ratios have been calculated for the Solar Tech Company. Analyze the profitability of Solar Tech Company.

2015 2014

Gross profit margin 37.0% 42.5%

Operating profit margin 4.7% 21.7%

Net profit margin 1.3% 17.2%

Cash flow margin 20.4% 25.9%

5. ABC Company and XYZ Company are competitors in the manufacturing industry. The following ratios and financial information have been compiled for these two companies for the most recent year.

a. Compare and evaluate the strengths and weaknesses of ABC and XYZ Companies.

b. Calculate the price-to-earnings ratios for both firms. Explain what a P/E ratio tells an analyst. What could be the cause of the difference between ABCs and XYZs P/E ratio?

Question 5 Ratios FINANCIAL RATIO ABC XYZ Liquidity Current (times) Quick (times) Cash flow liquidity (times) Cash flow from operations (in millions of $) 0.92 0.61 0.35 995 1.51 1.2 0.85 2,520 Activity Accounts Receivable Turnover (times) Inventory Turnover(times) Payables Turnover (times) Fixed Asset Turnover (times) Total Asset Turnover (times) 5.48 4.75 2.82 2.49 1.1 4.00 3.55 3.62 1.1 Leverage Debt Ratio (%) Times Interest Earned (times) Cash interest coverage (times) Cash flow adequacy (times) 76.02 12.3 9.89 0.43 51.21 17.28 30.19 1.35 Profitability Gross profit margin(%) Operating profit margin (%) Net profit margin (%) Cash flow margin (%) Return on assets (%) Return on equity (%) Cash return on assets (% Earnings per share 43.05 16.23 11.26 6.980 9.77 40.86 6.87 4.59 43.11 8.84 4.8 12.59 4.63 10.23 12.54 1.19 Closing stock price 41/SHARE $35/SHARE