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RE: Perrigo Company - Complete all ratios, analyze trends, industry average and report your interpretation for each ratio. Due Date: 04-08-19 NO late papers will be accepted. Industry Interpre- 1991 1992 Average tation Raties Liquidty: Current Quick 2.00 11 11 Leverige Debt-Assets Debt-Equity Il 11 Loo Activity: 4.50 Asset Turnover Fixed Asset Ratio Inventory Turnover A/R Turnover Avg. Collection 11111 THIO Profitabilityi ROS ROI ROE TIL 1 4.4% 0.2% 23.5% Working Capital: Before taxes Perrigo Company Balance Sheels at June 30, 1991, and 1992 (In thousands) ! 1992 -1991 $. 53B 50,460 106,504 6,092 163,594 84 31,261 58,604 3,950 93,879 Assels Current assets Cash Accounts receivables (net) Inventories Prepaid expenses and other current assets Total current assets Property and equipment (at cost) Land Bulldings Machinery and equipment Less accumulated depreciation Net Fixed Assets Cost in excess of net assets of acquired businesses Other Total Assets Liabilities & Shareholders' Equity Current liabilities: Accounts payable Payrolls and related taxes Accrued expenses Income taxes Current installments on long-term debt Total current liabilities Deferred income taxes . Long-term debl, (less current ins(allments) site de relativy Common stock Retained earnings Total shareholders' equity 7,419 70,515 67,951 145,885 28,737 117,148 33,177 13.027 $316,946 4,292 45,975 38,704 88,971 19,324 69,647 16,412 2,795 $182,723 $ 41,896 8,411 16,929 4,358 871 272,465 14,744 45,999 13, 208 132,285 51,453 183,738 $316,946 $ 25,989 5,929 9,928 1,718 11,557 55,121 12,600 82,100 149,841 10,000 22.902 32,902 $182,723 Sourca: Perrigo Company, 1992 Arinual Report E. F. Finances 42 Perrigo was a high growth company. Between fiscal 1989 (the first full year after the final mariage- ment-led buyout) and fiscal 1992, the company's sales and het income grewat compounded annual Tates of approximately 24% and 107%, respectiyely. However, the two leveraged buyouts resulted in a high long-terin debt-to-equity ttio of 13.3.1 in June 1990 (before the initial public issue of its stock). Primarily as a result of the initial stock, offering this ratio decreased 'to 0,25:1 by June 1992. Perrigo did not break down the sales and profits of its Cumberland-Swan and South Carolina subsidi- aries. Perrigo's sales and het income had historically peaked in the second and third quarters of the fiscal yeat while the first quarter had been its least profitable; Sales of cough and cold remedies traditionally peaked during the second and third fiscal.quarters as customers stocked inventories for the winter months. Sales of suntan products peaked in the third and fourth quarters as customers stocked up for the summer months. To fund its high growth, the company noted in its 1992 Annual Report that it does not currently pay cash dividends Exhibit 10 gives the company's financial data. Income Statements June 30, 1990, 1991, and 1992 (In thousands) 1992 1991 1990 Net sales $409,785 290,626 119,159 $281,265 204,614 -76,651 $247,028 181,699 65,327 Cost of sales Gross profil Operating expenses: Distribution Research & development Selling & administrative Operating income Interest expense Income before Income taxes Income taxes - Net Income 11,369 3,373 50 585 53,832 8,781 145,051 16,500 $ 28,551 5,305 1,565 38,057 31,724 12,420 19,304 7,100 $ 12,204 4,375 1,518 31,646 27,788 15,356 12,432 4 800 -7632 Source: Porriga Company. 1992 Annual Report
