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The following is provided for use in answering the next set of questions. You may also find table 2.5 on page 53 of your text

The following is provided for use in answering the next set of questions. You may also find table 2.5 on page 53 of your text and all questions on pages 5657.

TABLE 2.5 20092013 Financial Statement Data and Stock Price Data for Mydeco Corp.

Mydeco Corp. 20092013

(All data as of fiscal year end; in $ million)

Income Statement

2009

2010

2011

2012

2013

Revenue

Cost of Goods Sold

404.3

(188.3)

363.8

(173.8)

424.6

(206.2)

510.7

(246.8)

604.1

(293.4)

Gross Profit

Sales and Marketing

Administration

Depreciation and Amortization

216.0

(66.7)

(60.6)

(27.3)

190.0

(66.4)

(59.1)

(27.0)

218.4

(82.8)

(59.4)

(34.3)

263.9

(102.1)

(66.4)

(38.4)

310.7

(120.8)

(78.5)

(38.6)

EBIT

Interest Income (Expense)

61.4

(33.7)

37.5

(32.9)

41.9

(32.2)

57.0

(37.4)

72.8

(39.4)

Pretax Income

Income Tax

27.7

(9.7)

4.6

(1.6)

9.7

(3.4)

19.6

(6.9)

33.4

(11.7)

Net Income

Shares outstanding (millions)

Earnings per share

18.0

55.0

$0.33

3.0

55.0

$0.05

6.3

55.0

$0.11

12.7

55.0

$0.23

21.7

55.0

$0.39

Balance Sheet

2009

2010

2011

2012

2013

Assets

Cash

Accounts Receivable

Inventory

48.8

88.6

33.7

68.9

69.8

30.9

86.3

69.8

28.4

77.5

76.9

31.7

85.0

86.1

35.3

Total Current Assets

Net Property, Plant, and Equip.

Goodwill and Intangibles

171.1

245.3

361.7

169.6

169.6

243.3

184.5

309

361.7

186.1

345.6

361.7

206.4

347.0

361.7

Total Assets

Liabilities and Stockholders Equity

Accounts Payable

Accrued Compensation

778.1

18.7

6.7

774.6

17.9

6.4

855.2

22.0

7.0

893.4

26.8

8.1

915.1

31.7

9.7

Total Current Liabilities

Long-term Debt

25.4

500.0

24.3

500.0

29.0

575.0

34.9

600.0

41.4

600.0

Total Liabilities

Stockholders Equity

525.4

252.7

524.3

250.3

604.0

251.2

634.9

258.5

641.4

273.7

Total Liabilities and Stockholders Equity

778.1

774.6

855.2

893.4

915.1

Statement of Cash Flows

2009

2010

2011

2012

2013

Net Income

Depreciation and Amortization

Chg. in Accounts Receivable

Chg. in Inventory

Chg. in Payables and Accrued Comp.

18.0

27.3

3.9

(2.9)

2.2

3.0

27.0

18.8

2.8

(1.1)

6.3

34.3

(0.0)

2.5

4.7

12.7

38.4

(7.1)

(3.3)

5.9

21.7

38.6

(9.2)

(3.6)

6.5

Cash from Operations

Capital Expenditures

48.5

(25.0)

50.5

(25.0)

47.8

(100.0)

46.6

(75.0)

54.0

(40.0)

Cash from Investing Activities

Dividends Paid

Sale (or purchase) of stock

Debt Issuance (Pay Down)

(25.0)

(5.4)

(25.0)

(5.4)

(100.0)

(5.4)

75.0

(75.0)

(5.4)

25.0

(40.0)

(6.5)

Cash from Financing Activities

(5.4)

(5.4)

69.6

19.6

(6.5)

Change in Cash

18.1

20.1

17.4

(8.8)

7.5

Mydeco Stock Price

$7.92

$3.30

$5.25

$8.71

$10.89

31. See Table 2.5 showing financial statement data and stock price data for Mydeco Corp.

a. How did Mydecos accounts receivable days change over this period?

b. How did Mydecos inventory days change over this period?

c. Based on your analysis, has Mydeco improved its management of its working capital during this time period?

32.

See Table 2.5 showing financial statement data and stock price data for Mydeco Corp.

a. Compare Mydecos accounts payable days in 2009 and 2013.

b. Did this change in accounts payable days improve or worsen Mydecos cash position in 2013?

33.

See Table 2.5 showing financial statement data and stock price data for Mydeco Corp.

  • a. By how much did Mydeco increase its debt from 2009 to 2013?
  • b.WhatwasMydecosEBITDA/Interestcoverageratioin2009and2013?Diditscoverageratioeverfallbelow2?
  • c.Overall,didMydecosabilitytomeetitsinterestpaymentsimproveordeclineoverthisperiod?

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