STAR Corporation, a manufacturer for a range of lighting products, supplies financial information for both years 2019 and 2020 (all the numbers, except for share data, are shown in thousands of dollars). Estimated cost of capital for all its financing is 10,5%. STAR Corporation Income statements ($ in thousands) 2019 2020 Sales $5130 $4,850 Cost of goods sold (3.330) (3.240) Gross profits $1,800 $1,620 Operating expenses: Selling and G&A expenses $(738) $(702) Depreciation expenses (306) (450) Total operating expenses $(1,044) $(1,152) Operating profits $756 $468 Interest expense (180) (248) Earnings before taxes $576 $221 Income taxes (207) (59) Net Income $369 $162 STAR Corporation Balance Sheets ($ in thousands) ASSETS 2019 2020 Cash $270 $446 Accounts receivable 630 824 Inventories 540 702 Other current assets 113 144 Total current assets $1,553 $2,115 Gross fixed assets $4,185 $4,455 Accumulated depreciation (1,530) (1,980) Net fixed assets $2,655 $2.475 Total assets $4.208 $4.590 LIABILITIES (DEBT) AND EQUITY Accounts payable $360 $576 Short-term notes payable 225 270 Total current liabilities $585 $846 Long-term debt 1.125 1,193 Total liabilities $1,710 $2,039 Common equity: Common stock (par & paid in capital) $990 $990 Retained earnings 1,508 1,562 Total common equity $2,498 $2,552 Total liabilities and equity $4.208 $4.590 STAR Corporation Additional information: Number of common shares outstanding: 135 135 Dividends paid to stockholders $108 $108 Market price per share $32,40 $16,20 Based on the topics learnt in class prepare a financial analysis of STAR Corporation and its financial performance, comparing the firm's performance between 2 years. For your analysis and evaluation, please consider the following: computation of applicable financial ratios, common sized income statements and balance sheets including changes in absolute amounts & relative figures, pricelearnings and market/book ratios, EVA. All percentages should be rounded to the second decimal place Interpret your results briefly. STAR Corporation, a manufacturer for a range of lighting products, supplies financial information for both years 2019 and 2020 (all the numbers, except for share data, are shown in thousands of dollars). Estimated cost of capital for all its financing is 10,5%. STAR Corporation Income statements ($ in thousands) 2019 2020 Sales $5130 $4,850 Cost of goods sold (3.330) (3.240) Gross profits $1,800 $1,620 Operating expenses: Selling and G&A expenses $(738) $(702) Depreciation expenses (306) (450) Total operating expenses $(1,044) $(1,152) Operating profits $756 $468 Interest expense (180) (248) Earnings before taxes $576 $221 Income taxes (207) (59) Net Income $369 $162 STAR Corporation Balance Sheets ($ in thousands) ASSETS 2019 2020 Cash $270 $446 Accounts receivable 630 824 Inventories 540 702 Other current assets 113 144 Total current assets $1,553 $2,115 Gross fixed assets $4,185 $4,455 Accumulated depreciation (1,530) (1,980) Net fixed assets $2,655 $2.475 Total assets $4.208 $4.590 LIABILITIES (DEBT) AND EQUITY Accounts payable $360 $576 Short-term notes payable 225 270 Total current liabilities $585 $846 Long-term debt 1.125 1,193 Total liabilities $1,710 $2,039 Common equity: Common stock (par & paid in capital) $990 $990 Retained earnings 1,508 1,562 Total common equity $2,498 $2,552 Total liabilities and equity $4.208 $4.590 STAR Corporation Additional information: Number of common shares outstanding: 135 135 Dividends paid to stockholders $108 $108 Market price per share $32,40 $16,20 Based on the topics learnt in class prepare a financial analysis of STAR Corporation and its financial performance, comparing the firm's performance between 2 years. For your analysis and evaluation, please consider the following: computation of applicable financial ratios, common sized income statements and balance sheets including changes in absolute amounts & relative figures, pricelearnings and market/book ratios, EVA. All percentages should be rounded to the second decimal place Interpret your results briefly
