Week 7 question have two parts hon

I will give enough time and more cash...

Please complete on another Excel Document Question 1 Questions 2 Part 1: Daughtry Cosmetic's Single Step Income Statement For the Year Ended December 31, 2016 Details Sales Revenue Dividend Revenue Gain on Lawsuit Settlement Total Revenue and Gains Less: Loss and Expenses Cost of Goods Sold Selling Expenses General Expenses Interest Expenses Loss on Sale of Plant assets Income Tax Expenses Total Expenses Net Income from Continuing Operations Income from discontinued operations, net of tax Net Income Earnings per Share for Continued Operations Earnings per Share for Discontinued Operations Earnings per Share for Net Income Amount Amount $536,000 12,000 6,000 $554,000 302,000 81,000 70,900 21,000 10,000 27,600 512,500 41,500 7,200 48,700 2.00 0.36 2.36 Preferred Stock Dividend on Preferred Stock 25,000 1,500 Common Shares Outstanding: Common Shares Issued Less: Treasury Stock Common Shares Outstanding 21,000 1,000 20,000 Part 2: Expected Income (given) 7% Daughtry's Income (41,500/536,000)*100 7.74% Thus, the income of Daughtry's is 7.74% which is higher than expected income of 7%. Daughtry Cosmetic's Statement of Retained Earnings For the Year Ended December 31, 2016 Details Beginning Balance Prior Period Adjustment-Net of Tax Add: Net Income for 2016 Less: Dividends for 2016 Ending Balance Amount $ 196,000 5,000 $ 191,000 48,700 $ 239,700 29,500 $ 210,200 Part 1: Earnings per Share Computation of Dividend on Preferred Shares No. of Preferred Shares Outstanding Dividend per Share Dividend on Preferred Stock Earnings per Share = Earnings per Share Income from Continuing Operations Less: Preferred Dividend Income remaining for Common Stockholders (A) Average Common Shares Outstanding (B) Earnings per Share from Continuing Operations (A/B) $ 12,000 2.2 26,400 (Net Income-Preferred dividend) Weighted Average number of Shares Outsta $ $ 225,000 26,400 $ 198,600 134,000 Loss on Discontinued Operations (A) Average Common Shares Outstanding (B) Loss per Share from Discontinued Operations (A/B) Earnings per Share from Net Income Less: Preferred Dividend Income remaining for Common Stockholders (A) Average Common Shares Outstanding (B) Earnings per Share from Net Income (A/B) 66,000 134,000 $ $ 159,000 26,400 $ 132,600 134,000 Part 2: Estimated Market Price of One Share of BVL's Stock Estimated Market Price of One Share of Common Stock = Earnings per Share from Continuing Operations (A) Investment Capitalization Rate (B) Estimated Market Price per Common Stock EPS from Continuing Operations Investment Capitalization Rate 1.48 8% 18.5 1.48 10% 14.8 Investment capitalization rate of 12% is presumed to be more risky. The reason is that the estimated market price per share is lowest at investment capitalization rate of 12% ferred dividend) e number of Shares Outstanding 1.48 (0.49) 0.99 uing Operations alization Rate n is that the 1.48 12% 12.33 Part 1: King Supply Corporation Statement of Cash Flows Year ended December 31, 2016 Cash flow from Operating Activities Net Income Adjustments for non-cash and non-operating expenses Depreciation Expense Adjustment for increase or decrease in CA and CL Increase in Accounts Receivables Increase in Inventory Decrease in Prepaid Expenses Increase in Accounts Payable Increase in Salary Payables Decrease in Other Accrued Liabilities Net Cash Provided By Operating Activities Cash Flow from Investing Activities Purchase of Equipment Purchase of Land Net Cash Used In Investing Activites Cash Flow from Financing Activities Proceeds from issue of Notes Payable Proceeds from issue of Common Stock Cash Dividend paid Net Cash Used in Financing Activities Net Increase/Decrease in Cash Beginning Cash and Cash Equivalents Closing Cash and Cash Equivalents Amount Amount $61,000 $15,000 (1,000) (14,400) 2,100 8,500 8,000 (2,100) $16,100 $77,100 (18,200) (43,600) (61,800) 24,000 22,200 (48,200) (2,000) 13,300 4,000 17,300 Part 2: To evaluate an investment in any company it is important to examine its operating activities.The cash provided from operating activities provides calculation of changes in cash after taking affect of non-cash expenses, non-operating expenses and provides a bigger outlook than income statement. An operating cash flow of higher than income statement suggests that the financial health of the company is good. Investing activities provides the information pertaining to the use of cash in procuring assets by the company. A company invesing regularly is deemed as a growing company. If the company is making regular investments, it indicates that the plant and assets are rising and there will be substantial increase in revenues and profits in future. Financing activities facilitates the investors to know about the borrowings of debts and their repayment made by the company. The borrowing pattern of the company needs to be checked to see if the company is borrowing more debts or is sourcing money in form of share capital operating Working Notes: Calculation of Purchase of Equipments Beginning Balance + Purchases - Depreciation - Sold $ 49,900 + Purchases - $ 15,000 - $ Purchases Ending = Balance $ 53,100 $ 18,200 Cash Dividend Paid Beginning Ret. Net Earnings + Income - Dividends $ 27,000 + $ 61,000 - Dividends Dividends Ending Ret. - Earnings - $ 39,800 $ 48,200 Part 1: King Supply Corp Statement of Cash Flows Year ended December 31, 2016 Cash from Operating Activities: Cash Received from Customer Less: Cash Payments To Suppliers For Operating Expenses Foe Salaries For Income Tax For Interest $ $ Cash paid to suppliers Cost of goods sold Add: Increase in Inventory Purchases Less: Increase in Accounts Payable Cash payment for Merchandise 192,400 50,300 68,000 29,000 24,200 363,900 77,100 Net Cash Flow from Operating Activities Cash Flow from Investing Activities Purchase of Equipment Purchase of Land Net Cash Used In Investing Activites Cash Flow from Financing Activities Proceeds from issue of Notes Payable Proceeds from issue of Common Stock Cash Dividend paid Net Cash flow from financing activities Net Increase in Cash Balance Cash at the beginning of the year Cash at the end of the Year Working Cash receipts from customers Sales revenue Less: Increase in Accounts Receivable Cash receipts from customers 441,000 (18,200) (43,600) (61,800) 24,000 22,200 (48,200) (2,000) 13,300 4,000 17,300 $ 442,000 (1,000) 441,000 $ 186,500 14,400 200,900 (8,500) 192,400 Cash paid for Operating Expenses Operating expenses Less: Decrease in Prepaid Expenses Add: Decrease in Accrued Expenses Payable Cash payment for Operating Expenses $ 50,300 (2,100) 2,100 50,300 Part 2: The operating activities, under direct method, provide a different approach. It takes into considertion the items of cash that are specific to the inflow or outflow of cash. These items typically include cash paid to suppliers, cash collected from customers, dividends received, interest received, interest paid, income taxes paid, etc. This method is rarely used by the organizations because it is difficult to collect all the required information. It is more helpful in evaluating an investment as it uses operating cash receipts and payments only. Part 1: CRUTCHFIELD FURNITURE GALLERY Inc Statement of Cash Flow (Direct Method) For the Year Ended October 31, 2017 Cash Recipt Cash Receipt from Customer Interest Received Cash Receipt of Dividend Total Cash Receipt Cash Payments To Suppliers To Employees For Income Tax For Interest Net Cash Flow from Operating Activities Cash flow from Investing Activities Loan to other Company Purchase of Plant Assets Loan Collections Proceed from sale of Investment Proceed from sale of Plant Assets Net Cash flow from investing activities Cash From Financing Activities Sale of common stock Payment of cash Dividend Proceeds from issuance of note Payable Payment of long term notes Payable Net Cash flow from financing activities Net Increase in Cash Balance Cash at the beginning of the year Cash at the end of the Year Working Cash receipts from customers Cash Sales Collection of Credit Sales Cash receipts from customers Cash paid to suppliers Cost of goods sold Add: Increase in Inventory $ 588,700 4,500 4,700 $ 597,900 368,000 93,700 38,300 13,400 513,400 84,500 (12,800) (44,400) 11,200 9,500 22,300 (14,200) 7,000 (48,700) 20,200 (71,000) (92,500) (22,200) 40,200 18,000 182,700 406,000 588,700 588,700 237,055 16,887 Purchases Less: Increase in Accounts Payable Cash payment for Merchandise Cash paid for Operating Expenses Operating expenses Add: Increase in Prepaid Expenses Add: Decrease in Accrued Expenses Payable Cash payment for Operating Expenses Part 2: The cash flow suggests tha the company has received more inflow of cash in operating activities. The operating activities show inflow of cash of $84,500. But the outflows are higher in investing activities and financing activities. It suggests that the investments of the company are more and the company is investing more in assets. It is a positive sign and suggests that owing to high investments the company will earn more in future. There is also outflow of cash in financing activities which indicates that the company has paid its debts and dividends more than the money it has received form of issue of shares or in form of debts. From cash flow standpoint there is outflow of cash and the cash flow is negative which indicates that the liquidity of company has got down. 253,942 (60,725) 193,217 21,718 4,200 7,875 33,793 The cash flow suggests tha the company has received more inflow of cash in operating activities. The operating activities show inflow of cash of $84,500. But the outflows are higher in investing activities and financing activities. It suggests that the investments of the company are more and the company is investing more in assets. It is a positive sign and suggests that owing to high investments the company will earn more in future. There is also outflow of cash in financing activities which indicates that the company has paid its debts and dividends more than the money it has received form of issue of shares or in form of debts. Overall there is outflow of cash and the cash flow is negative which indicates that the liquidity of company has got down. Part 1: Trend Percentages with 2012 as base year 2016 Net Sales Net Income Total Assets 500 51 298 Trend 167% 189% 148% 167% 189% 148% 2015 140% 144% 130% Summary of trend percentages 2016 Net Sales Net Income Total Assets Part 2: Return on Sales = Net Income Net Sales *100 Return on Net Sales for 2014 = 43 *100 = 365 Return on Net Sales for 2015 = 39 *100 = 418 Return on Net Sales for 2016 = 51 *100 = 500 Return on sales has decreased during the fiscal year 2015 and stood at 9.33 as compared to 11.78% during the fiacal year 2014. But during the fiscal year 2016 the return on net sales again increased and stood at 10.20%. It indicates that the performance of the company decreased in the fiscal year 2015 as the net income declined. During fiscal year 2016 the return on sale again increased and which shows high profitability during the fiscal year 2016. Part 3: Asset Turnover = Net Sales *100 Average Total Assets Asset Turnover for 2014 = 365 *100 = 236 Asset Turnover for 2015 = 418 *100 = 255.5 Asset Turnover for 2016 = 500 *100 = 280 The asset turnove has shown an increasing trend. The ratio increased from 154.66% in fiscal year 2014 to 163.60% in fiscal year 2015. It further improved to 178.57% during fiscal year 2016. It indicates that the company is efficiently using its assets to net sales year after year. Part 4: Rate or Return on Average Total Assets = Return on Net Sales * Asset Turnover Rate or Return on Average Total Assets 2014 = 11.78% * 154.66% = 18.219% Rate or Return on Average Total Assets 2015 = 9.33% * 163.60% = 15.264% Rate or Return on Average Total Assets 2016 = 10.20% * 178.57% = 18.214% Part 5: Return on net sales of Abacus Shipping improved during the year 2016 and stood at 10.200%. It was in comparasion to 9.330% of previous year. The return during the year 2016 is higher than 9% which means that the return is good. But the rate than 11% which suggests that the ratio of the company is not outstanding. The performance of comp below outstanding. Part 6: The return on asset (ROA) of Abacus Shipping has improved during the fiscal year 2016. The ratio i 15.264% in previous year to 18.214% in current year. It indicates an improvement in the performanc company. The ratio of company is also higher than 18% of the industry. It indicates that the compan performing better than other peers of the industry. 2015 418 39 262 Trend 140% 144% 130% 2014 122% 159% 124% 2013 103% 126% 111% 11.781% 9.330% 10.200% .33 as compared to 11.78% n net sales again increased ecreased in the fiscal year ale again increased and 154.661% 163.601% 178.571% 2014 Trend 365 122% 43 159% 249 124% 2013 Trend 309 103% 34 126% 223 111% 2012 299 27 201 om 154.66% in fiscal year ing fiscal year 2016. ar after year. sset Turnover and stood at 10.200%. It was higher e return is good. But the rate is lower g. The performance of company is fiscal year 2016. The ratio improved rovement in the performance of the It indicates that the company is Bryan Products, Inc. Income Statement with Industry Average Year Ended December 21, 2016 Bryan Products $800,000 416,000 384,000 176,000 208,000 12,000 196,000 Industry Average 100.0% 57.3 42.7 29.4 13.3 2.5 10.8% Current Assets Fixed Assets, net Intangible Assets, net Other Assets Total Bryan Products $531,300 127650 20700 10350 $690,000 Industry Average 72.1% 19.0 4.8 4.1 100.0% Current Liabilities Long-term Liabilities Stockholder's Equity Total $317,400 144900 $227,700 $690,000 47.2% 21.0% 31.8% 100.0% Bryan Products 100.0% 52.0% 48.0% 22.0% 26.0% 1.5% 24.5% Industry Average 100% 57.3 42.7 29.4 13.3 2.5 10.8 Net Sales Cost of Goods Sold Gross Profit Operating Expenses Operating Income Other Expenses Net Income Bryan Products, Inc. Balance Sheet with Industry Average Year Ended December 21, 2016 Part 1: Common-size Income Statement Net Sales Cost of Goods Sold Gross Profit Operating Expenses Operating Income Other Expenses Net Income Common-size Balance Sheet Current Assets Fixed Assets, net Intangible Assets, net Other Assets Total Bryan Products 77.0% 18.5% 3.0% 1.5% 100.0% Industry Average 72.1% 19.0% 4.8% 4.1% 100.0% Current Liabilities Long-term Liabilities Stockholder's Equity Total 46.0% 21.0% 33.0% 100.0% 47.20% 21% 31.80% 100.0% Part 2: Bryan Products Industry Average Ratio of Gross Profit to Net Sales = Gross Profit/Net Sales 48.0% 42.7% Ratio of Operating Income to Net Sales = Operating Income/Net Sales 26.0% 13.3% Ratio of Net Income to Net Sales = Net Income/Net Sales 24.5% 10.8% The profit performance of Bryan Products is better than the industry averages. All the three ratios of Bryan Products, discussed above, are superior than the industry averages. It indicates that Bryan Products is controlling its cost and profits in more efficient manney as compared to other peers of the industry Part 3: Bryan Products Industry Average Current Assets to Total Assets = Current Assets/Total Assets 77.0% 72.1% Current Liabilities to Total Assets = Current Liabilities/Total assets 46.0% 47.2% Stockholder Equity to Total Assets = Stockholder's Equity/Total Assets 33.0% 31.8% Current assets of Bryan Products are 77% of the total assets and are higher than 72.1% of the industry. It indicatesa higher liquidity position of the company as compared to other players of the industry. The current liabilities of the Bryan Products are 46% which is lower than 47.2% of the industry. It again indicatesa higher liquidity of the company. The stockholder's equity of the Bryan Products are 33% of the total assets. It is higher than 31.8% of the industry. It indicates that more assets of the company are financed by equity in comparison to the other peers of the industry. Thus, Bryan Products has a better financial position as compared to industry averages or other players of industry. Part 1: Daughtry Cosmetic's Single Step Income Statement For the Year Ended December 31, 2016 Details Sales Revenue Dividend Revenue Gain on Lawsuit Settlement Total Revenue and Gains Less: Loss and Expenses Cost of Goods Sold Selling Expenses General Expenses Interest Expenses Loss on Sale of Plant assets Income Tax Expenses Total Expenses Net Income from Continuing Operations Income from discontinued operations, net of tax Net Income Earnings per Share for Continued Operations Earnings per Share for Discontinued Operations Earnings per Share for Net Income Amount Amount $536,000 12,000 6,000 $554,000 302,000 81,000 70,900 21,000 10,000 27,600 512,500 41,500 7,200 48,700 2.00 0.36 2.36 Preferred Stock Dividend on Preferred Stock 25,000 1,500 Common Shares Outstanding: Common Shares Issued Less: Treasury Stock Common Shares Outstanding 21,000 1,000 20,000 Part 2: Expected Income (given) 7% Daughtry's Income (41,500/536,000)*100 7.74% Thus, the income of Daughtry's is 7.74% which is higher than expected income of 7%. Daughtry Cosmetic's Statement of Retained Earnings For the Year Ended December 31, 2016 Details Beginning Balance Prior Period Adjustment-Net of Tax Add: Net Income for 2016 Less: Dividends for 2016 Ending Balance Amount $ 196,000 5,000 $ 191,000 48,700 $ 239,700 29,500 $ 210,200 Part 1: Earnings per Share Computation of Dividend on Preferred Shares No. of Preferred Shares Outstanding Dividend per Share Dividend on Preferred Stock Earnings per Share = Earnings per Share Income from Continuing Operations Less: Preferred Dividend Income remaining for Common Stockholders (A) Average Common Shares Outstanding (B) Earnings per Share from Continuing Operations (A/B) $ 12,000 2.2 26,400 (Net Income-Preferred dividend) Weighted Average number of Shares Outsta $ $ 225,000 26,400 $ 198,600 134,000 Loss on Discontinued Operations (A) Average Common Shares Outstanding (B) Loss per Share from Discontinued Operations (A/B) Earnings per Share from Net Income Less: Preferred Dividend Income remaining for Common Stockholders (A) Average Common Shares Outstanding (B) Earnings per Share from Net Income (A/B) 66,000 134,000 $ $ 159,000 26,400 $ 132,600 134,000 Part 2: Estimated Market Price of One Share of BVL's Stock Estimated Market Price of One Share of Common Stock = Earnings per Share from Continuing Operations (A) Investment Capitalization Rate (B) Estimated Market Price per Common Stock EPS from Continuing Operations Investment Capitalization Rate 1.48 8% 18.5 1.48 10% 14.8 Investment capitalization rate of 12% is presumed to be more risky. The reason is that the estimated market price per share is lowest at investment capitalization rate of 12% ferred dividend) e number of Shares Outstanding 1.48 (0.49) 0.99 uing Operations alization Rate n is that the 1.48 12% 12.33 Part 1: King Supply Corporation Statement of Cash Flows Year ended December 31, 2016 Cash flow from Operating Activities Net Income Adjustments for non-cash and non-operating expenses Depreciation Expense Adjustment for increase or decrease in CA and CL Increase in Accounts Receivables Increase in Inventory Decrease in Prepaid Expenses Increase in Accounts Payable Increase in Salary Payables Decrease in Other Accrued Liabilities Net Cash Provided By Operating Activities Cash Flow from Investing Activities Purchase of Equipment Purchase of Land Net Cash Used In Investing Activites Cash Flow from Financing Activities Proceeds from issue of Notes Payable Proceeds from issue of Common Stock Cash Dividend paid Net Cash Used in Financing Activities Net Increase/Decrease in Cash Beginning Cash and Cash Equivalents Closing Cash and Cash Equivalents Amount Amount $61,000 $15,000 (1,000) (14,400) 2,100 8,500 8,000 (2,100) $16,100 $77,100 (18,200) (43,600) (61,800) 24,000 22,200 (48,200) (2,000) 13,300 4,000 17,300 Part 2: To evaluate an investment in any company it is important to examine its operating activities.The cash provided from operating activities provides calculation of changes in cash after taking affect of non-cash expenses, non-operating expenses and provides a bigger outlook than income statement. An operating cash flow of higher than income statement suggests that the financial health of the company is good. Investing activities provides the information pertaining to the use of cash in procuring assets by the company. A company invesing regularly is deemed as a growing company. If the company is making regular investments, it indicates that the plant and assets are rising and there will be substantial increase in revenues and profits in future. Financing activities facilitates the investors to know about the borrowings of debts and their repayment made by the company. The borrowing pattern of the company needs to be checked to see if the company is borrowing more debts or is sourcing money in form of share capital operating Working Notes: Calculation of Purchase of Equipments Beginning Balance + Purchases - Depreciation - Sold $ 49,900 + Purchases - $ 15,000 - $ Purchases Ending = Balance $ 53,100 $ 18,200 Cash Dividend Paid Beginning Ret. Net Earnings + Income - Dividends $ 27,000 + $ 61,000 - Dividends Dividends Ending Ret. - Earnings - $ 39,800 $ 48,200 Part 1: King Supply Corp Statement of Cash Flows Year ended December 31, 2016 Cash from Operating Activities: Cash Received from Customer Less: Cash Payments To Suppliers For Operating Expenses Foe Salaries For Income Tax For Interest $ $ Cash paid to suppliers Cost of goods sold Add: Increase in Inventory Purchases Less: Increase in Accounts Payable Cash payment for Merchandise 192,400 50,300 68,000 29,000 24,200 363,900 77,100 Net Cash Flow from Operating Activities Cash Flow from Investing Activities Purchase of Equipment Purchase of Land Net Cash Used In Investing Activites Cash Flow from Financing Activities Proceeds from issue of Notes Payable Proceeds from issue of Common Stock Cash Dividend paid Net Cash flow from financing activities Net Increase in Cash Balance Cash at the beginning of the year Cash at the end of the Year Working Cash receipts from customers Sales revenue Less: Increase in Accounts Receivable Cash receipts from customers 441,000 (18,200) (43,600) (61,800) 24,000 22,200 (48,200) (2,000) 13,300 4,000 17,300 $ 442,000 (1,000) 441,000 $ 186,500 14,400 200,900 (8,500) 192,400 Cash paid for Operating Expenses Operating expenses Less: Decrease in Prepaid Expenses Add: Decrease in Accrued Expenses Payable Cash payment for Operating Expenses $ 50,300 (2,100) 2,100 50,300 Part 2: The operating activities, under direct method, provide a different approach. It takes into considertion the items of cash that are specific to the inflow or outflow of cash. These items typically include cash paid to suppliers, cash collected from customers, dividends received, interest received, interest paid, income taxes paid, etc. This method is rarely used by the organizations because it is difficult to collect all the required information. It is more helpful in evaluating an investment as it uses operating cash receipts and payments only. Part 1: CRUTCHFIELD FURNITURE GALLERY Inc Statement of Cash Flow (Direct Method) For the Year Ended October 31, 2017 Cash Recipt Cash Receipt from Customer Interest Received Cash Receipt of Dividend Total Cash Receipt Cash Payments To Suppliers To Employees For Income Tax For Interest Net Cash Flow from Operating Activities Cash flow from Investing Activities Loan to other Company Purchase of Plant Assets Loan Collections Proceed from sale of Investment Proceed from sale of Plant Assets Net Cash flow from investing activities Cash From Financing Activities Sale of common stock Payment of cash Dividend Proceeds from issuance of note Payable Payment of long term notes Payable Net Cash flow from financing activities Net Increase in Cash Balance Cash at the beginning of the year Cash at the end of the Year Working Cash receipts from customers Cash Sales Collection of Credit Sales Cash receipts from customers Cash paid to suppliers Cost of goods sold Add: Increase in Inventory $ 588,700 4,500 4,700 $ 597,900 368,000 93,700 38,300 13,400 513,400 84,500 (12,800) (44,400) 11,200 9,500 22,300 (14,200) 7,000 (48,700) 20,200 (71,000) (92,500) (22,200) 40,200 18,000 182,700 406,000 588,700 588,700 237,055 16,887 Purchases Less: Increase in Accounts Payable Cash payment for Merchandise Cash paid for Operating Expenses Operating expenses Add: Increase in Prepaid Expenses Add: Decrease in Accrued Expenses Payable Cash payment for Operating Expenses Part 2: The cash flow suggests tha the company has received more inflow of cash in operating activities. The operating activities show inflow of cash of $84,500. But the outflows are higher in investing activities and financing activities. It suggests that the investments of the company are more and the company is investing more in assets. It is a positive sign and suggests that owing to high investments the company will earn more in future. There is also outflow of cash in financing activities which indicates that the company has paid its debts and dividends more than the money it has received form of issue of shares or in form of debts. From cash flow standpoint there is outflow of cash and the cash flow is negative which indicates that the liquidity of company has got down. 253,942 (60,725) 193,217 21,718 4,200 7,875 33,793 The cash flow suggests tha the company has received more inflow of cash in operating activities. The operating activities show inflow of cash of $84,500. But the outflows are higher in investing activities and financing activities. It suggests that the investments of the company are more and the company is investing more in assets. It is a positive sign and suggests that owing to high investments the company will earn more in future. There is also outflow of cash in financing activities which indicates that the company has paid its debts and dividends more than the money it has received form of issue of shares or in form of debts. Overall there is outflow of cash and the cash flow is negative which indicates that the liquidity of company has got down. Part 1: Trend Percentages with 2012 as base year 2016 Net Sales Net Income Total Assets 500 51 298 Trend 167% 189% 148% 167% 189% 148% 2015 140% 144% 130% Summary of trend percentages 2016 Net Sales Net Income Total Assets Part 2: Return on Sales = Net Income Net Sales *100 Return on Net Sales for 2014 = 43 *100 = 365 Return on Net Sales for 2015 = 39 *100 = 418 Return on Net Sales for 2016 = 51 *100 = 500 Return on sales has decreased during the fiscal year 2015 and stood at 9.33 as compared to 11.78% during the fiacal year 2014. But during the fiscal year 2016 the return on net sales again increased and stood at 10.20%. It indicates that the performance of the company decreased in the fiscal year 2015 as the net income declined. During fiscal year 2016 the return on sale again increased and which shows high profitability during the fiscal year 2016. Part 3: Asset Turnover = Net Sales *100 Average Total Assets Asset Turnover for 2014 = 365 *100 = 236 Asset Turnover for 2015 = 418 *100 = 255.5 Asset Turnover for 2016 = 500 *100 = 280 The asset turnove has shown an increasing trend. The ratio increased from 154.66% in fiscal year 2014 to 163.60% in fiscal year 2015. It further improved to 178.57% during fiscal year 2016. It indicates that the company is efficiently using its assets to net sales year after year. Part 4: Rate or Return on Average Total Assets = Return on Net Sales * Asset Turnover Rate or Return on Average Total Assets 2014 = 11.78% * 154.66% = 18.219% Rate or Return on Average Total Assets 2015 = 9.33% * 163.60% = 15.264% Rate or Return on Average Total Assets 2016 = 10.20% * 178.57% = 18.214% Part 5: Return on net sales of Abacus Shipping improved during the year 2016 and stood at 10.200%. It was in comparasion to 9.330% of previous year. The return during the year 2016 is higher than 9% which means that the return is good. But the rate than 11% which suggests that the ratio of the company is not outstanding. The performance of comp below outstanding. Part 6: The return on asset (ROA) of Abacus Shipping has improved during the fiscal year 2016. The ratio i 15.264% in previous year to 18.214% in current year. It indicates an improvement in the performanc company. The ratio of company is also higher than 18% of the industry. It indicates that the compan performing better than other peers of the industry. 2015 418 39 262 Trend 140% 144% 130% 2014 122% 159% 124% 2013 103% 126% 111% 11.781% 9.330% 10.200% .33 as compared to 11.78% n net sales again increased ecreased in the fiscal year ale again increased and 154.661% 163.601% 178.571% 2014 Trend 365 122% 43 159% 249 124% 2013 Trend 309 103% 34 126% 223 111% 2012 299 27 201 om 154.66% in fiscal year ing fiscal year 2016. ar after year. sset Turnover and stood at 10.200%. It was higher e return is good. But the rate is lower g. The performance of company is fiscal year 2016. The ratio improved rovement in the performance of the It indicates that the company is Bryan Products, Inc. Income Statement with Industry Average Year Ended December 21, 2016 Bryan Products $800,000 416,000 384,000 176,000 208,000 12,000 196,000 Industry Average 100.0% 57.3 42.7 29.4 13.3 2.5 10.8% Current Assets Fixed Assets, net Intangible Assets, net Other Assets Total Bryan Products $531,300 127650 20700 10350 $690,000 Industry Average 72.1% 19.0 4.8 4.1 100.0% Current Liabilities Long-term Liabilities Stockholder's Equity Total $317,400 144900 $227,700 $690,000 47.2% 21.0% 31.8% 100.0% Bryan Products 100.0% 52.0% 48.0% 22.0% 26.0% 1.5% 24.5% Industry Average 100% 57.3 42.7 29.4 13.3 2.5 10.8 Net Sales Cost of Goods Sold Gross Profit Operating Expenses Operating Income Other Expenses Net Income Bryan Products, Inc. Balance Sheet with Industry Average Year Ended December 21, 2016 Part 1: Common-size Income Statement Net Sales Cost of Goods Sold Gross Profit Operating Expenses Operating Income Other Expenses Net Income Common-size Balance Sheet Current Assets Fixed Assets, net Intangible Assets, net Other Assets Total Bryan Products 77.0% 18.5% 3.0% 1.5% 100.0% Industry Average 72.1% 19.0% 4.8% 4.1% 100.0% Current Liabilities Long-term Liabilities Stockholder's Equity Total 46.0% 21.0% 33.0% 100.0% 47.20% 21% 31.80% 100.0% Part 2: Bryan Products Industry Average Ratio of Gross Profit to Net Sales = Gross Profit/Net Sales 48.0% 42.7% Ratio of Operating Income to Net Sales = Operating Income/Net Sales 26.0% 13.3% Ratio of Net Income to Net Sales = Net Income/Net Sales 24.5% 10.8% The profit performance of Bryan Products is better than the industry averages. All the three ratios of Bryan Products, discussed above, are superior than the industry averages. It indicates that Bryan Products is controlling its cost and profits in more efficient manney as compared to other peers of the industry Part 3: Bryan Products Industry Average Current Assets to Total Assets = Current Assets/Total Assets 77.0% 72.1% Current Liabilities to Total Assets = Current Liabilities/Total assets 46.0% 47.2% Stockholder Equity to Total Assets = Stockholder's Equity/Total Assets 33.0% 31.8% Current assets of Bryan Products are 77% of the total assets and are higher than 72.1% of the industry. It indicatesa higher liquidity position of the company as compared to other players of the industry. The current liabilities of the Bryan Products are 46% which is lower than 47.2% of the industry. It again indicatesa higher liquidity of the company. The stockholder's equity of the Bryan Products are 33% of the total assets. It is higher than 31.8% of the industry. It indicates that more assets of the company are financed by equity in comparison to the other peers of the industry. Thus, Bryan Products has a better financial position as compared to industry averages or other players of industry