Youre convinced that you have the skills, drive, and tenacity to do a great job, so you decided to apply for the job and was given financial information on the company. You were also told that you could get any additional information directly from the company.

In planning its operations for the next year, Frederick Industries wants to open three more locations and expects overall revenues to grow by 30%. The firm had purchased land in Santa monica, Brooks and Spring valley in anticipation of future expansion. So far, the firm is in receipt of one project analysis that indicates that a Brooks location would bring in sales of $2.7 million monthly while reducing $50,000 in sales from the Orange location monthly. The new installation in Brooks would cost $5.5 million to construct and would need $250,000 in working capital. In your review of the financial information, you discovered that the firm has two sets of bonds outstanding; a 25-year zero-coupon bond that was issued 10 years ago and a traditional corporate bond with a $10,000 face value issued five years ago that pays $131.25 coupons quarterly. The stock price had fluctuated from a high of $32.50 pre-pandemic to a pandemic low of $22.75 but had recently rebounded to $29.85. The CEO is also thinking about issuing new stocks but is wary of the 2.5% floatation costs, given that market rates are now 7% and set to go even higher as the Federal Reserve increases interest rates. He also pondered whether he should keep paying an increasing annual dividend given the annual dividend was $5 per share in 2020. Finally, you were given the following data by Mr. Frederick to aid in your analysis: Financial data for 2020 (All numbers in millions of Dollars) Notes payable $50 Total Assets $570 Sales $350 Projected Sales growth rate 30% Accounts payable $40 Cash $2 Profit margin 5% Accruals $30 Target payout ratio 60% Book value of Equity $250 Retained earnings $25

1. Is the company profitable?

2. Can I construct the financial statements from the information provided? (You will need this to be able to determine how the company is performing.)

3. How would I do a DuPont analysis of this company?

4. What are the capital requirements, especially in light of potential expansion?

5. What are your thoughts about the companys dividend policy?