Assume you recently graduated and have just reported to work as an investment advisor at the one of the firm on wall street.You have been presented and asked to review
the below income statment and balance sheet are one of the firm client .Your boss has developed below question that you need to answer.
e investments 48,600 20.000
feeunts receivable 351 .200 632.160 A
Affiventories 715,200 1,287,360 0
‘i-Tate! current assets $1,124,000 + 51.946302 0
Gross fixed assets 491,000 i 1,202,950
Lss: Accumulated depreciation 146,200 263,160
msoavabse WW” 200.000
Total current liabilities
Ten;;:n stock (1oo,ooo
‘eta: liabilities and equity $1,468,800
A an Wo-00°
other Data 2012 E11
Stock We $850 A J
Shares outstandzngPrice/Cash flow;
Market/Book W 5
1. What is the free cash flow for 2013?
2. Suppose Congress changed the tax laws so that Berndt’s depreciation expenses
changes in operations occurred. What would happen to reported profit and to net 15:
3. Calculate the 2013 current and quick ratios based on the projected balance sheet
statement data. What can you say about the company’s liquidity position in 2013?
4. Calculate the 2013 inventory turnover, days sales outstanding (DSO), fixed assets V
total assets turnover.
5. Calculate the 2013 debt ratio, IiabiIities-to-assets ratio, times-interest-earned, and
coverage ratios. What can you conclude from these ratios?
6. Calculate the 2013 profit margin, basic earning power (BEP), return on assets (ROA),
on equity (ROE). What can you say about these ratios?
7. Calculate the 2013 price / earnings ratio, price / cash flow ratio, and market I
8. Use the extended Du point equation to provide a summary and overview of companies
financial condation as projected for 2013.What are the major strenths and weaknesses?