Question (1) Directions: Click the Case Link above and use the information provided in Revolutionary Designs, Part B, to answer this question: What is the trend in the EBITDA-to-total-debt-service and Funded debt-to-EBITDA ratios for the years 20Y2 and 2013? EBITDA-to-Total-debt-service increased slightly from 0.2 to 0.3, but Funded-debt-to- EBITDA weakened from 4.4 to 3.7. EBITDA-to-Total-debt-service increased from 2.8 to 3.1. but was weakened by the decrease in Funded-debt-to-EBITDA from 3.6 to 3.1. EBITDA-to-Total-debt-service increased from 0.3 to 0.4 and Funded-debt-to-EBITDA decreased from 3.6 to 4.1 EBITDA-to-Total-debt-service increased from 2.8 to 3.1, and Funded-debt-to-EBITDA decreased from 4.4 to 3.7. Revolutionary Designs Ltd Part B Revolutionary Designs Ltd Statements of Financial Position (Common Size) (in $000s) As At December 31: 2093 20Y2 % 2011 % ASSETS Current assets Cash and equivalents Accounts receivable $ 310 1,194 $ 8.6 9.5 36.6 230 846 7.8 28.8 221 794 31.1 Raw materials Work in process Finished goods Total Inventory 501 452 146 1,099 15.4 13.9 4.5 33.7 611 409 156 1,176 20.8 13.9 5.3 40.0 440 275 156 871 17.2 10.8 6.1 34.1 Other current assets Total current assets 36 2,639 1.1 80.9 41 2,293 1.4 78.1 23 1.909 0.9 74.7 Gross fixed assets Less: Accumulated depreciation Net fixed assets 699 117 582 21.4 3.6 17.8 723 99 624 24.6 3.4 21.2 701 89 612 27.4 3.5 24.0 1.2 40 20 0.7 34 1.3 Patents and trademarks Patents and trademarks 40 1.2 20 0.7 34 1.3 TOTAL ASSETS $ 3,261 100.0 2,937 100.0 $ 2,555 100.0 $ $ LIABILITIES AND EQUITY Current liabilities Current portion-LTD Notes payable Note payable Jack Newsome-subordinated Accounts payable Accrued expenses Other current liabilities Total current liabilities 19 810 200 1,053 288 11 2,381 0.6 24.8 6.1 32.3 8.8 0.3 73.0 19 775 200 834 207 0.6 26.4 6.8 28.4 7.0 0.9 70.1 19 745 200 551 155 12 1,682 0.7 29.2 7.8 21.6 6.1 0.5 65.8 25 2,060 5.0 162 3 2,546 5.8 0.1 Long-term debt Other noncurrent liabilities Total liabilities 169 3 2,232 6.8 0.1 0.1 175 3 1,860 715 21.9 705 24.0 695 27.2 Shareholders' equity $ 2,937 100.0 $ 3,261 100.0 TOTAL LIABILITIES AND EQUITY 2,555 100.0 Revolutionary Designs Ltd Part B Revolutionary Designs Ltd Statements of Comprehensive Income (in $000s) Years Ended December 31: 20Y2 20Y1 $ $ 2013 8,010 6,328 1,682 $ $ 7,506 6,377 1,129 6,515 5,473 1,042 Sales Cost of goods sold Gross profit Selling, general and administrative expenses Depreciation expense Interest expense Loss on disposition of fixed assets Other expense Net income before taxes Taxation Net Income 1,315 26 84 27 22 858 24 78 0 706 18 54 0 4 0 208 165 264 100 79 130 108 $ $ 86 $ 134
