- Use relevant tools to assess the current financial situation of the company.
- Provide qualitative analysis of the company (strengths/ weakness). This can be done in a chart or bullet points.
- Evaluate the companys credit worthiness and collateral
STATEMENTS OF EARNINGS for the Years Ending January 31 Exhibit 2 BALANCE SHEETS as at January 31 2013 2012 2011 2010 ASSETS Current assets: Cash Accounts receivable Inventory Prepaids Total current assets Fixed assets: Furniture and fixtures, cost Less: accumulated depreciation Net furniture and fixtures Leaseholds, cost Less: accumulated depreciation Net Leaseholds Total fixed assets Intangibles Total Assets 9,66412,028199,7003,760$225,152 \begin{tabular}{rr} $61,200 \\ 28,662 \\ \hline$32,538 \end{tabular} $16,174 3,820$12,35444,892$270,044 3,9604,824153,6283,002$165,414 $34,792 $13,95620,836 $6,798 \begin{tabular}{rr} r & 644 \\ \hline$6,154 \\ \hline$20,110 \end{tabular} $185,524 $2,798 2,344 140,792 $149,0963,162 $32,164 $$14,28017,884 $1,200 160$r$15,320 $ $2,5962,278121,2182,786$128,878 \begin{tabular}{rr} $ & 32,164 \\ & 14,314 \\ \hline$17,850 \end{tabular} $ \begin{tabular}{lr} \hline & - \\ \hline$ & 17,850 \end{tabular} 84 $146,812 LIABILITIES AND PROPRIETOR'S CAPITAL Liabilities Current liabilities: Accounts payable Other current liabilities Total current liabilities Long-term bank loan Total liabilities Proprietor's Capital Balance, beginning of year Add: net earnings Subtotal Less: drawings Balance, end of year Total Liabilities and Proprietor's Capital $217,236 $219,6862,450$106,764270 68,87276,168 $288,558$182,932 $270,044 $185,524 $71,286 934$72,220 $83,464 $155,684 $13,584 $29,49615,912 20,7648,732 $164,416 $43,392 \$4 43,392 89,836 $133,228 $21,152 11,340$32,49218,908$13,584 $146,812 Exhibit 3 RATIO ANALYSIS PROFITABILITY Vertical analysis: Sales Cost of goods sold Gross profit Operating expenses: Store salaries Heat and utilities Building maintenance and repairs Rent and property tax Insurance and taxes Depreciation: Furniture and fixtures Leaseholds Interest: Long-term debt Trade debt Other operating expenses Total operating expenses Net earnings Return on equity LIQUIDITY Current ratio Acid test ratio Working capital EFFICIENCY (Based on 365-day year) Age of receivables Age of inventory Age of payables 1 Fixed asset turnover STABILITY Net worth/total assets Interest coverage GROWTH Sales Net profit Total assets Net worth 2013 100.0%71.9%28.1% 6.9% 1.4% 0.1% 3.7% 1.1% 1.2% 0.5% 1.3% 4.6% 25.1%4.3% 3.3% N/A 1.02:1 0.10:1 $5,466 7 days 156 days 154 days 20.0X 2012 100.0%22.9%27.1% 7.8% 1.6% 0.1% 4.7% 0.7% 0.6% 0.1% 1.8% 2.2% 24.6%5.0% 2.6% 241.1% 1.55:1 0.08:1 $58,650 N/A 1.6X N/A 1.6X 2012-13 2011 2010 \begin{tabular}{rr} 100.0% & 100.0% \\ \hline 22.5% & 28.1%71.9% \end{tabular} 7.5%7.0% 1.4%1.7% 0.1% 5.6% 0.9% 0.7% 2.2% 1.2% 24.3%4.7% 3.2% 142.6% 2.06:10.07:1$76,8762.97:10.11:1$85,486 3days146days98days29.7X2days140days67days30.6X2days145days55days23.8X 1.4% 1.7X 5.3% 1.9X 2011-12 23.5% 55.9% 45.6% N/A 0.1% 6.7% 1.5% 2.7% 1.1% 25.5%3.3% 2.6% 83.5% 23.8X 2010-11 2010-11 3.7%(14.2%)12.8%(70.3%)9.4%40.3%12.0%(35.7%) 9.3% 1.7X (35.7\%) DUN \& BRADSTREET CANADIAN NORMS \& KEY BUSINESS RATIOS Industry: Retail - Miscellaneous Products Exhibit 5 STATEMENT OF CASH FLOWS for the year ending January 31
