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P4-24. The Corrigan Corporation's forecasted 2005 financial statements follow, along with some industry average ratios. Corrigan Corporation: Forecasted Balance Sheet as of December 31, 2015 Cash Accounts receivable Inventories Total current assets Fixed assets Total assets Accounts and notes payable Accruals Total current liabilities Long-term debt Common stock Retained earnings Total liabilities and equity Corrigan Corporation: Forecasted Income Statement for 2005 80,000 500,000 925.000 $1,505,000 331.000 51.836.000 432,000 170.000 602.000 404,290 575,000 254, 710 $1.836.000 I Sales Cost of goods sold Selling general, and administrative expenses Depreciation Earnings before taxes (EBT) Taxes (40%) Net Income $ 4,290.000 3.580.000 370,320 159.000 $180,680 72.272 S 108.408 Per Share Dato EPS Cash dividends per share P/E ratio Market price (average). Number of shares outstanding $4.71 $0.95 5 $23.57 23,000 1. Calculate Corrigan's 2005 forecasted ratios, compare them with the industry average data. (YOU MAY USE BACK OF THIS PAGE TO SHOW YOUR CALCULATION). "Summary of ratios and comparison: Table 4.2 (P. 123)" COMPARE (GOOD OR POOR) CORRIGAN INDUS Quick Ratio 1.0X Current ratio 2.7X Inventory turnover 7.0 Days sales outstanding 32 days Fixed assets turnoverb 13.0X Total assets turnover 2.6X Return on assets 9.1% Return on equity 18.2 Debt ratio 50.0% Profit margin on sales 3.5% P/E ratio 6.0X Industry average ratios have been constant for the past 4 years, Based on year-end balance sheet figures Calculation is based on a 365-day year 2. Construct the DuPont equation for both Carrigan and the industry Hint: ROE = NET PROFIT MARGIN X TATO X EQUITY MULTIPLIER 3. Identify the area that needs improvement, outline Carrigan's strengths and weaknesses as revealed by your analysis