SNIDER CORPORATION Income Statement For the Year Ending December 31, 2007 Sales (on credit) ... Less: Cost of goods sold. Gross pront Less: Selling and administrative expenses Operating prot (EBIT) ..... Less: Interest expense Earnings before taxes (EBT). Less: Taxes ...... Earnings after taxes (EAT) $1,980,000 1,280,000 700,000 475,000 225,000 25,000 200,000 80,000 $ 120,000 "Indudes 335,000 in lease payments. $ 50,000 20,000 160,000 200,000 $430,000 60,000 600,000 (190,000) 410,000 $ 900,000 SNIDER CORPORATION Balance Shoot December 31, 2007 Assets Current assots: Cash.... Marketable securities Accounts receivable (net). Inventory Total current assets Investments Plant and equpment... Loss: Accumulated depreciation Net plant and equipment Total assets. ....... Llabilities and Stockholders' Equity Current liabilities: Accounts payablo Notes payable Accrued taxes ...... Total current Habilities Long-term liabilities: Bonds payable Total liabilities Stockholders'equity Preferred stock, $50 par value Common stock, $1 par value Capital paid in excess of par. Retained earnings. Total stockholders' equity Total abilities and stockholders' equity $ 90,000 70,000 10,000 170,000 150,000 $320,000 100,000 80,000 190,000 210,000 580,000 $900,000 26) Cash flow forecasts are less informative than pro forma forecasts. Ratios for Snider Corp. Industry Average Ratios Better (B) or Worse (W) Profit margin Return on assets Return on equity Receivables tumover Avg. collection period Inventory tumover Fixed asset turnover Total asset turnover Current ratio Quick ratio Debt to total assets Times interest eamed 8% 10% 15% 2 30 days 5x 3x 2 x 1 .5 .50 6 x