Company

LOGO Business Finance Project

Submitted by:Mrs. Fatma HelalyMr. Ashraf GhazyMr. Mohamed El KholyOsama Fawzy

Agenda

1. Common Size Comparative Income Statement 1. Common Size Comparative Income Statement

2. Common Size Comparative Balance Sheet 2. Common Size Comparative Balance Sheet

3. Important Financial Indicators3. Important Financial Indicators

4. Recommendations 4. Recommendations

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Common Size Comparative Income Statement

  Last Year Ratio Prior Year Ratio

Sales, net of returns and allowances 600,000 100% 500,000 100%

Subtract: COGS 330,000 55 280,000 56

Gross profit 270,000 45 220,000 44

         

Expenses:        

Selling Expenses 50,000 8.33 40,000 8.00

General Expenses 165,000 27.50 150,000 30.00

Total Selling & General Expenses 215,000 35.83 190,000 38.00

Net Operating income 55,000 9.17 30,000 6.00

Interest Expense 10,000 1.67 13,000 2.60

Net Income Before Income Tax 45,000 7.50 17,000 3.40

Income Tax 11,000 1.83 4,000 0.80

Net Income 34,000 5.67 13,000 2.60

Common Size Comparative Balance Sheet  Last Year Ratio Prior Year Ratio

Assets        

Current Assets        

Cash 10,000 3 12,000 4

Accounts Receivable, net of Bad Debt allowance 45,000 15 40,000 14

Inventory 160,000 53 130,000 46

Prepaid Expenses 10,000 3 8,000 3

Total Current Assets 225,000 75 190,000 68

Fixtures & Equipment, net of depreciation allowance 75,000 25 90,000 32

Total Assets 300,000 100 280,000 100

Liabilities        

Current Liabilities:        

Current Portion, loans Payable 25,000 8 25,000 9

Accounts Payable 50,000 17 35,000 13

Taxes payable 20,000 7 20,000 7

Accrued Expenses 10,000 3 8,000 3

Total Current Liabilities 105,000 35 88,000 31

Long-Term Liabilities:        

Notes Payable to bank 75,000 25 100,000 36

Total Liabilities 180,000 60 188,000 67

Stockholders' Equity        

Common Stock, 5,000 Shares        

$10 par value authorized        

1,000 issued and outstanding 10,000 3 10,000 4

Retained Earnings 110,000 37 82,000 29

Total Stockholders' Equity 120,000 40 92,000 33

Total Liabilities & Equity 300,000 100 280,000 100

Important Financial Indicators

 

Last Year

   Prior Year

Current Ratio = Ending Current Assets = 225,000   2.14 190,000   2.16

Ending Current Liabilities 105,000     88,000    

Quick Ratio = Ending Current Assets - Ending Inventory = 225,000 160,000 0.62 190,000 130,000 0.68

Ending Current Liabilities 105,000     88,000    

Inventory Turnover = COGS 330,000   2.06 280,000   2.15

Inventory 160,000     130,000    

Accounts Receivable Turnover = Net Sales 600,000   13.33 500,000   12.50

Accounts Receivable 45,000     40,000    

Day of Receivable = 365 365   27.38 365   29.20

Accounts Receivable Turnover 13     13    

Interest Coverage = EBIT 55,000   5.50 30,000   2.31

Interest Expense 10,000     13,000    

Important Financial Indicators

Debt to Equity Ratio = Debt = Ending Total Debt 75,000   0.63 100,000   1.09

Equity = Ending Total Equity 120,000     92,000    

Return on Assets = Annual Net Income 34,000   11.33 13,000   4.64

Ending Total Assets 300,000     280,000    

Return on Equity = Annual Net Income 34,000   28.33 13,000   14.13

Ending Total Equity 120,000     92,000    

Profit Margin = Annual Earnings before Interest & Taxes 55,000   9.17 30,000   6.00

Annual Net Sales 600,000     500,000    

Earnings per Share EPS = Net Income 34,000   3.40 13,000   1.30

Issued Capital 10,000     10,000    

Recommendations

1. Very Healthy Company 1. Very Healthy Company

2. Substantial Sales Base 2. Substantial Sales Base

3. 3.

4. 4.

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