Please help. Analyze the Spartech case study on page 246-256. One prohibition is using templates, need approximately 5 pages of writing analyzing the cAse study. Required items: analyze Sartech's Financial statements and excerpts from the company 2010 form 10-k. Analysis should include the preparation of common size financial statements, key financial ratios, and evaluation of short-term solvency, operating efficiency, Capital structure and long term solvency, profitability and market measures. 2. Using your analysis list reasons for and against investment in Spartech's common stock. 3. Using your analysis, List of reasons for and against lending Spartech additional funds. Also, Spartech was merged with Poly One corporation in 2013, so that you do not have to use the most recent financial statements. You can consult financial statements from 2010- 2012.

' ' US Financial Start mr r 246 CHAPTER 5 The Analysis Of Item 1. Business General " r"spartech") was incorporated filztivstate of SparteCh corporation (the"C:rrin)iasi11:es: that had commnCeCl Oper'tgri: "iq-(lo The Delaware 1n 1968, suCQBehn'g ' diaries, is an intermedlary Process?" ' ' 'meered Company' together With Its SUbSl cl concentrates. The Company; ., warrants base thermoplastics, polymeric compounds an Odity Supphers into extrudrafi '(zstic sheet chased from comm film laminates, acryfig ii: "gums, Spe- polymers or resins pm and rollstock, thermoformed paCka'ginga -K Of Spartech Corporation. d resin compounds. its products are r customers in a Wide range of end markets' els and profiles businesses and closed and liqui- In 200'9, the Company soldits whe dated three businesses including a m marine market and one compounding an anufacturer of boat components sold to the d one sheet business that previously serviced fied as discontinued operations in accor- sinjgle customers. These businesses are classi . Board ("FASB") Accounting Standards Financial Accounting Standards "In: H . ms ("ASC") ME, Discontinued Operations. All amounts presented Within this Rams are rammed on a continuing basis, unless otherwise noted. See the am in eensoliflamfii financial statements for further details of these divestitures lime whesds profiles and marine businesses were previously reported inIt'n Analysts oj I'IIIUHCIUI Statements get] ' fl 'til? AN?) SUUSHHAREES Netsales 'k > "an P"-1:'= 2009 am ' ' $926,777 $ 1.321,169 Costs and expenses Cost of sales Selling, general and administr Amortization of intangibles f-i '.. HE}; 810469 1204932 alive expenses jr: mi? 77,868 88973 Goodwill impairments "/ 4'479 5'163 Other intanoible and f' ad "wii/tw fi 217'974 Restructurigg and ex' lXL * asset lmpalrmems 2'592 9'031 It Costs /,29U 5234 2230 Total costs and expenses 900542 1,527,403 Operating (loss) earnings 26135 (206234) Interest, net of interest income* 12,O25 15579 19,403 Debt extinguishment costs 729 - - (Loss) earnings from continuing operations before income taxes (73,890) 10,756 (225,637) Income tax (benefit) expense (24,247) 7,451 (53988) N et (loss) earnings from continuing operations (49,643) 3,305 (171,649) N et (loss) earnings from discontinued operations, net of tax (732) 5,046 (20,463) Net (loss) earnings $ (50375) $ 8,351 $ (192,112) Basic (loss) earnings per share: (Loss) earnings from continuing operations $ (1.60) $ 0.11 $ (5.61) (Loss) earnings from discontinued operations, net of tax (0.03) 0.16 (0.68) Net (loss) earnings per share $ (1.63) $ 0.27 $ (6.29) Diluted ( loss) earnings per share: (Loss) earnings from continuing operations $ (1.60) $ 0.11 $ (5.61) (Loss) earnings from discontinued Operations, net of tax (0.03) 0.16 (0.68) Net (loss) earnings per share $ (163) $ 027 $ (629) Dividends declared per share $ - $ 0.05 The accompanying notes are an integral part of these consolidated financial statements. W *(Note: Interest, net of interest income, is comprised only of interest expense.)October 31' 2009 101484 39505 W 180,355 w w,LMH9""' 58,736 425,192 "HMV" f'"""' ' . Harm HMWMMVEHF d!'""'"*" n ' V "mg-gun A lh'ibMNL-l/QmA'W' r ' l, ,r ' O dhflhsb ghwnuunfi;,".("' bukq'gnrly; . haHn'w - dw 1;';u0.lu'zv Aaiwqgip." ,=", pm einiim; Jr'u" annnn'nnliu'w ,:1 is .-i x 'n": Ay!" M'H'g ' Witch", Juan". "an maha). M't'lyunu r' xm." "vaughn; July inuil Shiny t {il'wumefihh'n'bg AN" (WV than. ;.'.;a' sh Jigj":'ahgn g) fi'xu'nn bmw .."l p , -' rn" '>. ' 'e,. gsm :' ' * '. "am nw: I CB 0 Ai AA. i egg"; "Hm. ;' weswfa'n- q n bqh .v inning; ir! wli$i wt)' jl'vxvlv'n" i'i-Iig' Sign; fitzfizv' Maiai'huuu,' ' - ams- nii'qat "umm - . ;., . , g .- A 4. . n...; flu, . 'q'ag'u'j .,'-nvu'",",";'. flii'*'i;>'i',:" .3'r'n':-'-..n.ii INCH in. tfkfl'nflmlug ti' ' 4 f. firff fi 'iuu'm'uw quqiuwiuuw k . Azi'i'v*i*-'im3*fl'mm At ' > p ' .. ,.;;: jun," fm" {Huang} ('MNWHIM ' 5 ,= if: gwr"; "him; Fifqniui'fl'iji jkvt'ii'io'lilifl'k 2 "C " " ifflllflggll'fli"SDLNN fliu "him; , . ' 3. - , m' inuit" nail-timuxa'' umm" rwuzuiw "gun; m w'. ME? gd'agqq'iwml: My mimumr dfli'i? i'h.;qmcn vr w'i dummy"! wwi?- "itr;u'x m-qugpxauugpfini 'yififiqflfikifi" er-zndliv 'usu' umgpiihii sr':sw:.;7mi'-a 'uuauwug; zwflxoiflnk "ansmw Him 93'70'923'134'"Wifi"!- ; ra' ' . AU t Katwhfitiiy n wwii mi' ev?!" .*'fi!"'!?i'"lu5v " nm; nunn-inks": at"ii-5jjfliifl!y mg} Aguiadfvm. .q' um'rpiw'nnw {am 3 RI WMUIU'QI S m M wat) WBZ) flS) MW) ml) "65) (6242) 4,321 2.523 36254 29,343 (9,635) (47,519) (4,736) 797 65,264 (8,098) 32,677 24,579 (41,600) (18936) (1,183) (215) (3,057) (15) 4'763 (59,100) 31326 19,026 1,727 (11,691) (2,766 ) (542) 96,612 (17276) 584 (792) (17.484) (49903) (7.876) 573 (2,424) (13926) 2.812 (9.6 16 67)an inlcor t al Part Of these consolidated financial mm. Department ' is panpf an environmental investigation initiated by {fm m Environm 0 Entrironmental Protection ("NJDEP") and the W : in. b th enlal Protectlon Agency ("USEPA") as well as associated KW "am" y e NJDER and if the Company's liability is materially different map MM", accrued, it could impact the Company's results of operations, bla'mibun Wi Cash flows. In September 2003, NJDEP issued a directive to approximately m including Franklin-Burlington Plastics, Inc., a subsidiary of the (30an '::..*..ra,t.>,. Burlington"), to undertake an assessment of natural resource damage m Him," interim restoration of the Lower Passaic River, a 17-mile stretch of the v in northern New Jersey. The directive, insofar as it relates to the Cemm am sidiary, pertains to the Company's plastic resin manufacturing facilixy in Mt: Jersey, located adjacent to the Lower Passaic River.The Company am rn. in 1986, When it purchased the stock of the facility's former owner, W exams. Corp. The Company {required all of Franklin Plastics Corp.'s eminem umm, as part of the acquisition. . Also in 2003, the USEPA requested that companies located in M t ,. 4' in, at as. t'r 3" 'iii? Lower Passaic River, including Franklin-Burlington, cooperate in vw r . pt in: n' contamination of the Lower Passaic River. In response, the - mu approximately '70 other; companies (collectively, the "Cooperating m pursuant to anAdministrative Order of Consent with the U'SEPA,m v. ; sibility for mpleting a Remedial Investigation/Feasibility Stuart (* rt Lower Passaic River. The RIFS is currently estimated to cost am": lion to wmplbte (in addition to USEPA oversight costs) and is em = r at "operations a focus on product quality and cost management, and to fish itself as having the highest quality and broadest material capabilities. % -' t believes that this transition in priorities, a continued US. based eco- efhieient cost structure will lead to improved share- sed 10% from 2009 reflecting a increase higher raw material costs as selling price across several end markets reflecting ls. Despite the increase in sales vol-C , "AFTER 5 The Analysis of Financial Statements 253 volatile raw . materla ' ' , . from 2010 as a stroligirrlclng 'wnvtronment. The Company believes it has emerged L Company Wlth rt lower fixed cost structure that is better positioned to genera A ' . future. tk PrOfttable growth and im roved shareholder returns i ti 0 p n 1 Results of Operations gplgzrparison 0f2010 and 2009: $77.9 iiiieigiri: zzltiiiigaiqggglisiBZ'fiVe expenses were $38;9 expnse because Of provisioulgiir assummici itiillion asseniqted with the Se - aratton of the Compan 's fo "i' P '"' 'i'jbdmiulriln it tin-jo}; 'CEO l Eu fourth quarter of why *' rmct reslttutt and Lilitl MCC" 1 " "Cd ( Mn t' b acceleratin . ), higher protesstnnnl fees and other C?'='P'5"535 mehmed mm g progress on resoivmg conttnggneies and the reinstatement et temporary co ' - . e . , V mpensallon reductions that were in efieet in will), million in 2010 compared to 4 million of higher bad debts Notes to Consolidated Financial Statements 5) Property, Plant and Equipment Property, plant and equipment at October 30, 2010, and Octo the following: i'd/fi 2010 2009 $ 9,820 $ 11211 ber 31, 2009. consisted of Land Buildings and leasehold improvements 96,946 102,155 Machinery and equipment 373,898 376,360 Computer equipment and software 39,428 38,456 Furniture and fixtures 4,663 5245 524,755 533,427 Accumulated depreciation (312,911) (304,424) $ 211,844 $ 229,003 // 9) Long-Term Debt Long-term debt at October 30, 2010, and October 31, 2009, consisted of the following: '/ 2009 2010 2006 Senior Notes $ - $ 45,684 2004 Senior Notes 113,972 137,054 Credit facility 45,900 -- Euro Bank term loan -- 20,292 Other 12,600 13,404 Total debt 172,472 216,434 Less current maturities 880 36,079 $ 171,592 $ 180355 ===.---== Total long-term debt Mri/"r-[mcial Statements 254 CHAPTER 5 leeAnalysis ofFin revenue bonds and cupiml 1 ex These financings mature 3 p - b from 2.00% to 12470/0, d thereafter are: The Company's other de lease obligations used to between 2012 and 2019 an Scheduled maturities of long'ter Year Ended Maturities $ 880 23,333 2013 23,186 2014 69,007 2015 23,133 Thereafter $ 172,472 //"/ me Cornpany was in Wilma with all debt covenants as of October SR 35': cf); concurrent amendments (colleetixi it in WV 12, 2011, the many entered into Wears") to m ed and Restated Credit and 2004 Senior Note agreez'wgmg "). The Amendments are effective starting in me 1. Under the Amendments, the Company's maximum 2, * 3.5 to 1 during the term of the Agreements to 4.25 to l 1 imf quarter emma, AS no 1 in the second quarter of 2011, 3.75 to 1 in the third rual'm: 3.5 comme quarter of 2011, 3.25 to 1 in the first quarter of 2012 " "its?! % {him qMfimz, who 1 in the fourth quarter of 2012 through the third " fl 9313, mm m m in fourth quarter of 2013 through the end of the ' ' annual capital expenditures are limited to $30,000 , wfhases of itscommon stock, or prepay its " M is Slibjflct to certain restrictions on its ability to ram; " ' pc m in the first quarter of 2011 for the nugiiglw br 'iiij'iiu'fil an an minimum: Of the Agreements, the "ri, H F': iscuf 3 Flint "Yr; im' i Hub " 4 y > m an ' . . ' Y i it "Its?! It; :.> rr; nihiiilsjmr h. up y S credlt prOflle ratmg of that With Him: tar-xin"? 'iwtwr ' ' aged on the compan ,S With; tina -'l "fi M I a " "vu": awulmfl'wniuhi b y A > > u Mw" u v'vmu'ihmlw filaments and cuO ertl30'2010 x . rren y expects to hi fi, ., > "'l'f'lg'wn' viii" 4,' at u ' , r' N ' 'M 1 > > J r. "Hilly" Wii'm" MII'! 'gsHM'; in L' "Hifi" "Wifi. r" . v x. i'wgt ln: ' - of its financing arrange- r . at; -v With: the payment of an the {lampmy's results of "in "MK I-; 'CHAPTER 5 14) Commitments and Contingencies N- Year Ended Operating Leases X 2011 $ 4,841 2012 2,663 2013 1,891 2014 1,421 2015 1,042 Thereafter 3382 $ 15,240 ' v ' Minimum varieus short-term take-or-pay arrangements associated withkthe Pm" ni mm As ef October 30, 2010, these commitments totaled mmm 's'k mina!" Y "5 an H glilNipiIH'lgk w. .. . Wumixu'. in "XML" vr?" t: . r w AM? Mum," duuufifi'nu fu; ' wu"; thnuiifim' u {MM (1,785) 4,550 'N dawn" mm": "am: to discontinued operatlons of ' am. by; l' 4 ' ' wkji'liu 'ively. gin 2 nunn? m, amman: anu: iflvfl'ql from the company's 2010 m mm mm mm: mv. th (af common-size finan- H mmw ' M Him mm a... illimmrm Msfimt-term solvency, mummy! H uv Mil": am wheatley, profitability, and Ware can be accessed Guhkghflk' w ' "putnam W whim