PROBLEM 5

Axtel Company has the following financial statements.

Axtel Company

Balance Sheet For the period ended 12/31/X1 ($000)

ASSETS

12/31/X0

Cash $ 3,514 Accounts receivable 6,742 Inventory 2,573 CURRENT ASSETS $ 12,829 Fixed assets

Gross $22,478

12/31/X1

$ 2,875 5,583 3,220 $ 11,678

$24,360 (13,313)

Accumulated depreciation Net

TOTAL ASSETS

Accounts payable Accruals 268 408 CURRENT LIABILITIES $ 1,824 $ 2,110

Long-term debt $ 7,112 $ 6,002 Equity 14,224 14,613 TOTAL CAPITAL $ 21,336 $ 20,615 TOTAL LIABILITIES

AND EQUITY $ 23,160 $ 22,725

Axtel Company

Income Statement For the period ended 12/31/X1 ($000)

(12,147) $ 10,331

$ 23,160

$

$

11,047 22,725

LIABILITIES

$ 1,556 $ 1,702

Sales COGS Gross margin Expense EBIT Interest EBT Tax Net income

$36,227 19,925 $16,302 10,868 $ 5,434 713 $ 4,721 1,605 $ 3,116

In addition, Axtel retired stock for $1,000,000 and paid a dividend of $1,727,000. Depreciation for the year was $1,166,000. Construct a statement of cash flows for Axtel for 20X1. (Hint: Retir- ing stock means buying it back from shareholders. Assume the purchase was made at book value, and treat it like a negative sale of stock.)

Calculate all of the ratios discussed in the chapter for Axtel Company in Problem 5. Assume Axtel had leasing costs of $7,267 in 20X1 and had 1,268,000 shares of stock outstanding valued at $28.75 per share at year end.