Problem 1.6: Table 3.1 in Chapter 3 presents financial statements over the period 2014 through 2017 for R&E Supplies, Inc. a. Construct a sources and uses statement for the company over this period (one statement covering all three years). b. What insights, if any, does the sources and uses statement give you the financial position of about R&E Supplies? R&E Supplies, Inc. Income Statements Changes 2014 2015 2016 2017+ 2014 - 2017 $11,190 $13,764 $16,104 $20,613 $9.400 $11,699 $13,688 $17,727 $1,790 $2,065 $2,416 $2.886 Net sales Cost of goods sold Gross profit Expenses: General, selling, and administrative (SG&A) expenses Net interest expense Earnings before tax Tax Earnings after tax $1,019 $100 $671 $302 $369 $1,239 $103 $723 $325 $398 $1,610 $110 $696 $313 $383 $2,267 $90 $529 $238 $291 Supplemental figures: Earnings before interest and taxes Tax rate (%) $771 45.0% $826 45.0% $806 45.0% $619 45.0% Balance Sheets Assets Current assets: Cash and securities Accounts receivable Inventories Prepaid expenses Total current assets Net fixed assets Total assets $671 $1,343 $1,119 $14 $3,147 $128 $3,275 $551 $1,789 $1,376 $12 $3,728 $124 $3,852 $644 $2,094 $1,932 $15 $4,685 $295 $4,980 $412 $2,886 $2,267 $18 $5,583 $287 $5,870 Liabilities and Owners' Equity Current Liabilities: Bank loan Accounts payable Current portion long-term debt Accrued wages Total current liabilities $50 $1,007 $60 $5 $1,122 $50 $1,443 $50 $7 $1,550 $50 $2,426 $50 $10 $2,536 $50 $3,212 $100 $18 $3,380 Long-term debt Common stock Retained earnings Total liabilities and owners' equity *Estimate $960 $150 $1,043 $3,275 $910 $150 $1,242 $3,852 $860 $150 $1,434 $4,980 $760 $150 $1,580 $5,870 Liabilities and Owners' Equity Current Liabilities: Bank loan Accounts payable Current portion long-term debt Accrued wages Total current liabilities $50 $1,007 $60 $50 $1,443 $50 $7 $1,550 $50 $2,426 $50 $10 $2,536 $50 $3,212 $100 $18 $3,380 $5 $1,122 Long-term debt Common stock Retained earnings Total liabilities and owners' equity *Estimate $960 $150 $1,043 $3,275 $910 $150 $1,242 $3,852 $860 $150 $1,434 $4,980 $760 $150 $1,580 $5,870 Supplemental figures: Interest-bearing debt Owners' equity Invested capital Principal payment $1,070 $1,193 $2,263 NA $1,010 $1,392 $2,402 -$60 $960 $1,584 $2,544 - $50 $910 $1,730 $2,640 -$50 Sources and Uses Statement: Sources of Funds Total sources of funds Uses of Funds Total uses of Funds Insights about R&E Supplies' financial position. Problem 1.6: Table 3.1 in Chapter 3 presents financial statements over the period 2014 through 2017 for R&E Supplies, Inc. a. Construct a sources and uses statement for the company over this period (one statement covering all three years). b. What insights, if any, does the sources and uses statement give you the financial position of about R&E Supplies? R&E Supplies, Inc. Income Statements Changes 2014 2015 2016 2017+ 2014 - 2017 $11,190 $13,764 $16,104 $20,613 $9.400 $11,699 $13,688 $17,727 $1,790 $2,065 $2,416 $2.886 Net sales Cost of goods sold Gross profit Expenses: General, selling, and administrative (SG&A) expenses Net interest expense Earnings before tax Tax Earnings after tax $1,019 $100 $671 $302 $369 $1,239 $103 $723 $325 $398 $1,610 $110 $696 $313 $383 $2,267 $90 $529 $238 $291 Supplemental figures: Earnings before interest and taxes Tax rate (%) $771 45.0% $826 45.0% $806 45.0% $619 45.0% Balance Sheets Assets Current assets: Cash and securities Accounts receivable Inventories Prepaid expenses Total current assets Net fixed assets Total assets $671 $1,343 $1,119 $14 $3,147 $128 $3,275 $551 $1,789 $1,376 $12 $3,728 $124 $3,852 $644 $2,094 $1,932 $15 $4,685 $295 $4,980 $412 $2,886 $2,267 $18 $5,583 $287 $5,870 Liabilities and Owners' Equity Current Liabilities: Bank loan Accounts payable Current portion long-term debt Accrued wages Total current liabilities $50 $1,007 $60 $5 $1,122 $50 $1,443 $50 $7 $1,550 $50 $2,426 $50 $10 $2,536 $50 $3,212 $100 $18 $3,380 Long-term debt Common stock Retained earnings Total liabilities and owners' equity *Estimate $960 $150 $1,043 $3,275 $910 $150 $1,242 $3,852 $860 $150 $1,434 $4,980 $760 $150 $1,580 $5,870 Liabilities and Owners' Equity Current Liabilities: Bank loan Accounts payable Current portion long-term debt Accrued wages Total current liabilities $50 $1,007 $60 $50 $1,443 $50 $7 $1,550 $50 $2,426 $50 $10 $2,536 $50 $3,212 $100 $18 $3,380 $5 $1,122 Long-term debt Common stock Retained earnings Total liabilities and owners' equity *Estimate $960 $150 $1,043 $3,275 $910 $150 $1,242 $3,852 $860 $150 $1,434 $4,980 $760 $150 $1,580 $5,870 Supplemental figures: Interest-bearing debt Owners' equity Invested capital Principal payment $1,070 $1,193 $2,263 NA $1,010 $1,392 $2,402 -$60 $960 $1,584 $2,544 - $50 $910 $1,730 $2,640 -$50 Sources and Uses Statement: Sources of Funds Total sources of funds Uses of Funds Total uses of Funds Insights about R&E Supplies' financial position