Reference: Survey of Accounting 6th edition

Assignment Summary: Throughout chapter 9 we will be evaluating the performance of a company named Milavec Company for years 3 and 4. We do not have a lot of details about the companys operations, but we do have an Income Statement and Balance Sheet for years 3 and 4. We do not know the companys industry, but we can determine some facts about the company based on the information presented. Your job will be to unravel the information available, analyze the financial statements (including the Year 5 financials provided below,) and draw some conclusions.

You will be working through the three years of Milavec Financial Statements provided in this project assignment sheet from (POV) Investors considering investing $100,000, who will more purchase Preferred Stock, 6%, $100 par

Perform analysis on the three years of Financial Statements provided for Milavec. Produce a summary of your conclusion about Milavec, including the recommendation you make for your point of view. (You are using the Investor POV I would recommend yes, invest or no, do not invest) Provide the analytical tools you used (at least three) that support your conclusion or recommendation. Be sure to include a description of your analysis in addition to the computational work. At least some of your analytics need to include the Year 5 performance.

You should should produce

A visually appealing summary that presents your conclusions and provides easy-to understand analytics to support your conclusion.

Supplemental work to provide the supporting calculations/computations and descriptions of your analysis.

Using the Investor POV I would recommend yes, invest or no, do not invest?

Year 3 800,000 Milavec Company Income Statement and Statement of Retained Earnings For the Years Ending Year 5 Year 4 Sales $ 1,600,000 $ 900,000 $ Cost of Goods Sold Beginning Inventory $ 70,000 $ 43,000 $ Purchases $ 1,078,000 $ 637,000 $ Goods available for sale $ 1,148,000 $ 680,000 $ Ending Inventory $ 60,000 $ 70,000 $ Cost of Goods Sold $ 1,088,000 $ 610,000 $ Gross Margin $ 512,000 $ 290,000 $ Operating Expenses $ 480,000 $ 248,000 $ Income before taxes $ 32,000 $ 42,000 $ Income taxes $ 12,800 $ 17,000 $ Net Income $ 19,200 $ 25,000 $ Plus: Beg bal Retained Earnings $ 162,000 $ 137,000 $ Less: Dividends $ 6,000 $ $ Ending Balance Retained Earnings $ 175,200 $ 162,000 $ | || 40,000 483,000 523,000 43,000 480,000 320,000 280,000 40,000 18,000 22,000 130,000 15,000 137,000 Milavec Company Balance Sheet As of December 31 Year 5 Year 4 Year 3 Assets Cash Marketable Securities Notes Receivable Accounts Receivable Merchandise Inventory Prepaid Expenses Property Plant and Equipment (net) Total Assets $ $ $ $ $ $ $ $ 36,200 $ 20,000 $ $ 65,000 $ 60,000 $ $ 340,000 $ 521,200 $ 20,000 $ 20,000 $ 4,000 $ 50,000 $ 70,000 $ 4,000 $ 340,000 $ 508,000 $ 17,000 22,000 3,000 56,000 43,000 4,000 310,000 455,000 Liabilities and Stockholder's Equity Accounts Payable $ Salaries Payable $ Taxes Payable $ Bonds Payable, 8% $ Preferred Stock, 6%, $100 par, cumulative $ Common Stock, $10 par $ Retained Earnings $ Total Liabilities and Stockholders' Equity $ 40,000 $ 2,000 $ 4,000 $ 100,000 $ 50,000 $ 150,000 $ 175,200 $ 521,200 $ 40,000 $ 2,000 $ 4,000 $ 100,000 $ 50,000 $ 150,000 $ 162,000 $ 508,000 $ 38,000 3,000 2,000 100,000 50,000 125,000 137,000 455,000 Year 3 800,000 Milavec Company Income Statement and Statement of Retained Earnings For the Years Ending Year 5 Year 4 Sales $ 1,600,000 $ 900,000 $ Cost of Goods Sold Beginning Inventory $ 70,000 $ 43,000 $ Purchases $ 1,078,000 $ 637,000 $ Goods available for sale $ 1,148,000 $ 680,000 $ Ending Inventory $ 60,000 $ 70,000 $ Cost of Goods Sold $ 1,088,000 $ 610,000 $ Gross Margin $ 512,000 $ 290,000 $ Operating Expenses $ 480,000 $ 248,000 $ Income before taxes $ 32,000 $ 42,000 $ Income taxes $ 12,800 $ 17,000 $ Net Income $ 19,200 $ 25,000 $ Plus: Beg bal Retained Earnings $ 162,000 $ 137,000 $ Less: Dividends $ 6,000 $ $ Ending Balance Retained Earnings $ 175,200 $ 162,000 $ | || 40,000 483,000 523,000 43,000 480,000 320,000 280,000 40,000 18,000 22,000 130,000 15,000 137,000 Milavec Company Balance Sheet As of December 31 Year 5 Year 4 Year 3 Assets Cash Marketable Securities Notes Receivable Accounts Receivable Merchandise Inventory Prepaid Expenses Property Plant and Equipment (net) Total Assets $ $ $ $ $ $ $ $ 36,200 $ 20,000 $ $ 65,000 $ 60,000 $ $ 340,000 $ 521,200 $ 20,000 $ 20,000 $ 4,000 $ 50,000 $ 70,000 $ 4,000 $ 340,000 $ 508,000 $ 17,000 22,000 3,000 56,000 43,000 4,000 310,000 455,000 Liabilities and Stockholder's Equity Accounts Payable $ Salaries Payable $ Taxes Payable $ Bonds Payable, 8% $ Preferred Stock, 6%, $100 par, cumulative $ Common Stock, $10 par $ Retained Earnings $ Total Liabilities and Stockholders' Equity $ 40,000 $ 2,000 $ 4,000 $ 100,000 $ 50,000 $ 150,000 $ 175,200 $ 521,200 $ 40,000 $ 2,000 $ 4,000 $ 100,000 $ 50,000 $ 150,000 $ 162,000 $ 508,000 $ 38,000 3,000 2,000 100,000 50,000 125,000 137,000 455,000