Provided Information (&financial statements information is in the attachment) The JTP Company, located in Jenkintown, PA, is a small manufacturer and distributor of custom machined components. Because of some successful new products marketed to tool and die manufacturers, the firm has seen steady revenue growth. Expecting sales growth to continue, the company expanded operations in 2020 through significant investments in property, plant, and equipment. However, the growth has been accompanied by a precipitous drop in the companys stock price.

You are a financial consultant who has been retained to analyze the companys performance. Your investigative plan involves a series of in-depth interviews with management and doing some independent research on the industry. However, before starting, you want to focus your thinking to be sure you can ask the right questions. You begin by analyzing the firms financials over the last three years, which are presented in the supplemental datasheet. As part of your discovery process, you learn that the company sold no property, plant, or equipment during the time periods presented. Also, the company did not repay any long-term debt in 2020. The account balance of the common stock account (part of equity) did not change. And finally, the companys normal credit terms extended to its customers are net 15.

Required Submission Complete the following using Microsoft Excel and Word. All quantitative analysis will be done in Excel, while all qualitative analysis will be completed in Word. You must use formulas for all computations.

In Microsoft Excel:

1. Construct horizontal analysis (year-over-year growth) on the provided financial statements for 2019 and 2020. 2. Build common size balance sheets for 2018 - 2020, respectively, and common size income statements for 2018 - 2020, respectively. 3. Create Statements of Cash Flows for 2019 and 2020 using the indirect method. Also compute Free Cash Flow for each year. 4. Calculate all the financial ratios discussed in chapter 16 (use exhibit 16-6 as a guide) for 2019 and 2020.

In Microsoft Word:

1. Based on all of your financial statement analysis, what do you think is causing the decline in the companys stock price? In other words, why might the market not be reacting favorably to JTPs growth? 2. In light of your response above, what two (or more) specific actionable items could the company do

XI - Project 2 Data Sheet (Protected View] - Microsoft Excel non-commercial use File Home Insert Formulas Data Review View Page Layout for K26 B D E F G H J L M N 0 1 EXHIBITS: SUPPLEMENTAL DATA (for JTP Company) All values, except stock price, are in thousands ($000) 2 3 Common-size Analysis 2018 2019 Trend Analysis (% change) 2019 2020 Ratio Analysis 4 Table 1 Balance Sheets 2018 2019 2020 2020 2019 2020 5 $414 $333 $362 78 93 119 398 424 446 79 196 121 2,146 2,441 4,148 -$1.299 -$1,467 - $1,646 $1,816 $2,020 $3,550 $237 $242 $286 248 302 466 84 73 1,329 1,247 1,403 1.469 $1,816 $2,020 $3,550 Common-size Analysis 2018 2019 Trend Analysis(% change) 2019 2020 2018 2019 2020 2020 $3,796 $4,036 $4,308 2,425 2,548 2,786 6 Assets 7 Cash 8 Accounts receivable 9 Inventory 10 Other current assets 11 Gross Property, Plant, & Equipment 12 Accumulated Depreciation 13 Total assets 14 15 Liabilities and equity 16 Accounts payable 17 Accruals & other current liabilities 18 Long-term debt 19 Total equity Total liabilities and equity 21 22 23 Table 2 Income Statements 24 25 Sales 26 Cost of goods sold 27 Operating expenses: 28 Depreciation 29 Selling & Administrative Expense 30 Other Operating Expenses 31 Operating Income 32 Interest expense 33 Pre-tax Profit 34 Income Tax Expense 35 Net Income 36 37 38 Table 3 Other Information 39 40 Dividends Paid 41 Stock Issuance 42 Stock price 43 Avg. Shares outstanding 44 Avg. Interest Rate on Long-term debt 45 Effective Tax Rate 46 47 48 49 50 51 167 880 21 303 1 $302 83 $219 168 981 2 337 1 $336 83 179 1,029 80 234 21 $213 54 $159 Statement of Cash Flows 2019 $253 2020 2018 2019 2020 $89 $97 $93 $0 $0 $0 $39.27 $26.10 $11.55 177 172 167 1.20% 1.40% 1.60% 27.48% 24.70% 25.35% XI - Project 2 Data Sheet (Protected View] - Microsoft Excel non-commercial use File Home Insert Formulas Data Review View Page Layout for K26 B D E F G H J L M N 0 1 EXHIBITS: SUPPLEMENTAL DATA (for JTP Company) All values, except stock price, are in thousands ($000) 2 3 Common-size Analysis 2018 2019 Trend Analysis (% change) 2019 2020 Ratio Analysis 4 Table 1 Balance Sheets 2018 2019 2020 2020 2019 2020 5 $414 $333 $362 78 93 119 398 424 446 79 196 121 2,146 2,441 4,148 -$1.299 -$1,467 - $1,646 $1,816 $2,020 $3,550 $237 $242 $286 248 302 466 84 73 1,329 1,247 1,403 1.469 $1,816 $2,020 $3,550 Common-size Analysis 2018 2019 Trend Analysis(% change) 2019 2020 2018 2019 2020 2020 $3,796 $4,036 $4,308 2,425 2,548 2,786 6 Assets 7 Cash 8 Accounts receivable 9 Inventory 10 Other current assets 11 Gross Property, Plant, & Equipment 12 Accumulated Depreciation 13 Total assets 14 15 Liabilities and equity 16 Accounts payable 17 Accruals & other current liabilities 18 Long-term debt 19 Total equity Total liabilities and equity 21 22 23 Table 2 Income Statements 24 25 Sales 26 Cost of goods sold 27 Operating expenses: 28 Depreciation 29 Selling & Administrative Expense 30 Other Operating Expenses 31 Operating Income 32 Interest expense 33 Pre-tax Profit 34 Income Tax Expense 35 Net Income 36 37 38 Table 3 Other Information 39 40 Dividends Paid 41 Stock Issuance 42 Stock price 43 Avg. Shares outstanding 44 Avg. Interest Rate on Long-term debt 45 Effective Tax Rate 46 47 48 49 50 51 167 880 21 303 1 $302 83 $219 168 981 2 337 1 $336 83 179 1,029 80 234 21 $213 54 $159 Statement of Cash Flows 2019 $253 2020 2018 2019 2020 $89 $97 $93 $0 $0 $0 $39.27 $26.10 $11.55 177 172 167 1.20% 1.40% 1.60% 27.48% 24.70% 25.35%