. Prepare the following financial exhibits for 2013 through 2016: Ratio table Vertical analysis of income statements and balance sheets Horizontal analysis (index numbers) income statements and balance sheets Cash flow statements 5-part analysis of ROE

. 1. Prepare the following financial exhibits for 2013 through 2016: Ratio table Vertical analysis of income statements and balance sheets Horizontal analysis (index numbers) of income statements and balance sheets Cash flow statements 5-part analysis of ROE 2. Assuming the role of William Wyler, CPA, prepare a 2-page memorandum that analyzes the financial condition of PGI and makes recommendations relating to the company's financial performance and proposed new product introduction. The memo should be divided into sections describing liquidity, asset management, long-term debt paying ability, profitability, and recommendations. The memo should be single spaced and use the 12-point Calibri font with .7 inch margins. rinancial Data PGI provided Wyler with financial statements for the last five years, which are contained in Exhibit 1 and 2. A detailed breakdown of unit prices and costs and sales quantities for the last five years was also provided in Exhibit 3. 2012 711,100,000 421,650,000 289,450,000 Exhibit 1 Income Statements 2013 2014 850,762,000 1,625,324,200 516,212,000 1,021,419,200 334,550,000 603,905,000 2015 2,211,360,600 1,468,340,150 743,020,450 2016 2,651,882,800 1,791, 102,960 860,779,840 Sales Cost of sales Gross profit Operating costs Selling and distribution Research and development Administration Amortization Operating profit Interest Earnings before taxes Taxes Net Income 74,500,300 45,890,340 24,350,300 49,557,087 973 14,189,065 80,962,908 28,337,018 52,625,890 85,984,000 55,689,500 32,534,000 56,830,350 103,512, 150 17,386,710 86,125,440 30,143,904 55,981,536 200,450,300 101,230,000 95,608,890 141,468,842 65,146,968 46,684,825 18,462 143 6,461,250 12,000,393 231,530,000 185,640,000 124,890,000 142,920,000 58,040,450 51,226,136 6,814,314 2,385,010 4,429,304 267,300 200 239,560,000 137,450,300 152.885,800 63.583.540 56,015, 189 7,568 351 2.648.923 4.919.428 Operations In order to expand sales, PG1 has kept its prices constant over the last five years despite increases by competitors. It also offers its distributors terms of 2/15, net 30, which vary from the industry standard of net 30. PGI designs and assembles its products in Canada, but sources its components globally. As a precautionary measure, to guard against supply interruptions caused by strikes, material shortages, and transportation delays, it stockpiles many of its key parts. Its accounts payable relate primarily to inventory purchases. Industry standard credit terms are 3/15, net 60 and most suppliers charge interest of 10 percent per annum on any overdue accounts. In order to remain competitive with low-wage countries, PGI invested heavily in factory automation, but has had difficulties with many of the complex systems. Breakdowns and software "bugs are common place as most of the equipment was bought from a low-cost supplier, which has since gone bankrupt. Low educational standards also made training difficult and lowered production efficiency. It was thought automation would allow the company to reduce finished goods inventory though just-in-time production, but the frequent breakdowns made it necessary to carry more stock. To accommodate company growth, PGI built a new corporate headquarters, R&D facility and distribution centre in 20014. A number of existing buildings were considered, but a new facility in an expensive area of Toronto was constructed to increase the profile of the company. Retained earnings were insufficient to fund PGI' rapid growth, so large amounts of capital had to be raised externally - the company has yet to pay a dividend. Terms loans and mortgages were negotiated with five different banks to diversify its funding sources. Pl is listed on the Toronto and New York Stock Exchanges and has gone to the market in each of the past five years to sell equity. To avoid losing control, the three founding shareholders agreed to issue only non-voting common shares, but is appears the market has lost its appetite for this type of security. PGI maintains a $1,500,000 line of credit with Cash Accounts receivable Parts inventory WIP inventory Finished goods inventory Total current assets Land, plant, and equipment, net Intangibles Total assets 2012 75,340,000 31,650,000 96,670,000 46,789,180 145,300,530 395,749,710 445,230,840 50,340,030 891,320,580 Exhibit 2 Balance Sheets 2013 76,800,300 45,320,000 150,320,000 65,354,460 210,360,300 548,155,060 489,300,500 79,003,000 1,116,458,560 2014 95,630,000 65,340,000 245,320,600 86,650,675 271,530,200 764,471,475 1,317,388,220 97,300,200 2,179, 159,895 2015 55,320,100 75,800,300 339,760,200 124,532,030 314,580,400 909,993,030 1,318,350,000 110,850,000 2,339,193,030 2016 15,430,300 95,300,000 423,340,000 145,673,800 389,640,200 1,069,384,300 1,402,870,000 125,988,000 2,598, 242,300 Accounts payable Current portion of long-term debt Total current liabilities Long-term debt Shareholders' equity Total liabilities and equities 68,700,400 23,453,000 92,153,400 234,530,000 564,637 180 891,320,580 95,620,000 26,790,000 122,410,000 267,900,000 726,148,560 1,116,458,560 167,500,300 69,575,000 237,075,300 695,750,000 1,246,334,595 2,179,159,895 240,650,430 73,453,020 314, 103,450 734,530,200 1,290,559,380 2,339,193,030 320,640,430 79,567,030 400,207,460 795,670,300 1,402,364,540 2,598, 242,300 . 1. Prepare the following financial exhibits for 2013 through 2016: Ratio table Vertical analysis of income statements and balance sheets Horizontal analysis (index numbers) of income statements and balance sheets Cash flow statements 5-part analysis of ROE 2. Assuming the role of William Wyler, CPA, prepare a 2-page memorandum that analyzes the financial condition of PGI and makes recommendations relating to the company's financial performance and proposed new product introduction. The memo should be divided into sections describing liquidity, asset management, long-term debt paying ability, profitability, and recommendations. The memo should be single spaced and use the 12-point Calibri font with .7 inch margins. rinancial Data PGI provided Wyler with financial statements for the last five years, which are contained in Exhibit 1 and 2. A detailed breakdown of unit prices and costs and sales quantities for the last five years was also provided in Exhibit 3. 2012 711,100,000 421,650,000 289,450,000 Exhibit 1 Income Statements 2013 2014 850,762,000 1,625,324,200 516,212,000 1,021,419,200 334,550,000 603,905,000 2015 2,211,360,600 1,468,340,150 743,020,450 2016 2,651,882,800 1,791, 102,960 860,779,840 Sales Cost of sales Gross profit Operating costs Selling and distribution Research and development Administration Amortization Operating profit Interest Earnings before taxes Taxes Net Income 74,500,300 45,890,340 24,350,300 49,557,087 973 14,189,065 80,962,908 28,337,018 52,625,890 85,984,000 55,689,500 32,534,000 56,830,350 103,512, 150 17,386,710 86,125,440 30,143,904 55,981,536 200,450,300 101,230,000 95,608,890 141,468,842 65,146,968 46,684,825 18,462 143 6,461,250 12,000,393 231,530,000 185,640,000 124,890,000 142,920,000 58,040,450 51,226,136 6,814,314 2,385,010 4,429,304 267,300 200 239,560,000 137,450,300 152.885,800 63.583.540 56,015, 189 7,568 351 2.648.923 4.919.428 Operations In order to expand sales, PG1 has kept its prices constant over the last five years despite increases by competitors. It also offers its distributors terms of 2/15, net 30, which vary from the industry standard of net 30. PGI designs and assembles its products in Canada, but sources its components globally. As a precautionary measure, to guard against supply interruptions caused by strikes, material shortages, and transportation delays, it stockpiles many of its key parts. Its accounts payable relate primarily to inventory purchases. Industry standard credit terms are 3/15, net 60 and most suppliers charge interest of 10 percent per annum on any overdue accounts. In order to remain competitive with low-wage countries, PGI invested heavily in factory automation, but has had difficulties with many of the complex systems. Breakdowns and software "bugs are common place as most of the equipment was bought from a low-cost supplier, which has since gone bankrupt. Low educational standards also made training difficult and lowered production efficiency. It was thought automation would allow the company to reduce finished goods inventory though just-in-time production, but the frequent breakdowns made it necessary to carry more stock. To accommodate company growth, PGI built a new corporate headquarters, R&D facility and distribution centre in 20014. A number of existing buildings were considered, but a new facility in an expensive area of Toronto was constructed to increase the profile of the company. Retained earnings were insufficient to fund PGI' rapid growth, so large amounts of capital had to be raised externally - the company has yet to pay a dividend. Terms loans and mortgages were negotiated with five different banks to diversify its funding sources. Pl is listed on the Toronto and New York Stock Exchanges and has gone to the market in each of the past five years to sell equity. To avoid losing control, the three founding shareholders agreed to issue only non-voting common shares, but is appears the market has lost its appetite for this type of security. PGI maintains a $1,500,000 line of credit with Cash Accounts receivable Parts inventory WIP inventory Finished goods inventory Total current assets Land, plant, and equipment, net Intangibles Total assets 2012 75,340,000 31,650,000 96,670,000 46,789,180 145,300,530 395,749,710 445,230,840 50,340,030 891,320,580 Exhibit 2 Balance Sheets 2013 76,800,300 45,320,000 150,320,000 65,354,460 210,360,300 548,155,060 489,300,500 79,003,000 1,116,458,560 2014 95,630,000 65,340,000 245,320,600 86,650,675 271,530,200 764,471,475 1,317,388,220 97,300,200 2,179, 159,895 2015 55,320,100 75,800,300 339,760,200 124,532,030 314,580,400 909,993,030 1,318,350,000 110,850,000 2,339,193,030 2016 15,430,300 95,300,000 423,340,000 145,673,800 389,640,200 1,069,384,300 1,402,870,000 125,988,000 2,598, 242,300 Accounts payable Current portion of long-term debt Total current liabilities Long-term debt Shareholders' equity Total liabilities and equities 68,700,400 23,453,000 92,153,400 234,530,000 564,637 180 891,320,580 95,620,000 26,790,000 122,410,000 267,900,000 726,148,560 1,116,458,560 167,500,300 69,575,000 237,075,300 695,750,000 1,246,334,595 2,179,159,895 240,650,430 73,453,020 314, 103,450 734,530,200 1,290,559,380 2,339,193,030 320,640,430 79,567,030 400,207,460 795,670,300 1,402,364,540 2,598, 242,300