Question

In what year was​ Mydeco's net income the​ lowest?

b. In what year did Mydeco need to reduce its cash​ reserves?

c. Why did Mydeco need to reduce its cash reserves in a year when net income was reasonably​ high?

Income Statement   2012   2013   2014   2015   2016  
Revenue   390.4   365.9   429.5   510.8   606.5  
Cost of Goods Sold   (187.9)   (173.8)   (206.0)   (246.2)   (293.8)  
Gross Profit   202.5   192.1   223.5   264.6   312.7  
Sales and Marketing   (68.2)   (67.9)   (82.9)   (105.5)   (125.5)  
Administration   (60.7)   (58.3)   (58.5)   (66.5)   -77.8  
Depreciation & Amortization   (28.2)   (27.7)   (34.6)   (38.1)   (39.4)  
EBIT   45.4   38.2   47.5   54.5   70.0  
Interest Income (Expense)   (32.4)   (31.9)   (30.7)   (36.2)   (38.0)  
Pretax Income   13.0   6.3   16.8   18.3   32.0  
Income Tax   (4.6)   (2.2)   (5.9)   (6.4)   (11.2)  
Net Income   8.4   4.1   10.9   11.9   20.8  
Shares outstanding (millions)   55.5   55.5   55.5   55.5   55.5  
Earnings per share   $0.15   $0.07   $0.20   $0.21   $0.37  
Balance Sheet   2012   2013   2014   2015   2016  
Assets                      
Cash   47.8   72.1   94.1   83.5   91.8  
Accounts Receivable   89.5   69.4   69.6   76.4   85.4  
Inventory   33.1   31.6   29.3   32.5   35.4  
Total Current Assets   170.4   173.1   193.0   192.4   212.6  
Net Property, Plant & Equip.   246.8   244.4   309.9   344.5   343.2  
Goodwill & Intangibles   361.6   361.6   361.6   361.6   361.6  
Total Assets   778.8   779.1   864.5   898.5   917.4  
Liabilities & Stockholders' Equity                      
Accounts Payable   19.1   17.5   22.4   26.7   31.8  
Accrued Compensation   6.4   7.2   6.8   7.4   8.8  
Total Current Liabilities   25.5   24.7   29.2   34.1   40.6  
Long-term Debt   501.7   501.7   576.1   600.5   600.5  
Total Liabilities   527.2   526.4   605.3   634.6   641.1  
Stockholders' Equity   251.6   252.7   259.2   263.9   276.3  
Total Liabilities & Stockholders' Equity   778.8   779.1   864.5   898.5   917.4  
Statement of Cash Flows   2012   2013   2014   2015   2016  
Net Income   8.4   4.1   10.9   11.9   20.8  
Depreciation & Amortization   28.2   27.7   34.6   38.1   39.4  
Chg. in Accounts Receivable   3.7   20.1   -0.2   (6.8)   (9.0)  
Chg. in Inventory   (3.3)   1.5   2.3   (3.2)   (2.9)  
Chg. in Pay. & Accrued Comp.   2.6   (0.8)   4.5   4.9   6.5  
Cash from Operations   39.6   52.6   52.1   44.9   54.8  
Capital Expenditures   (24.1)   (23.1)   (99.3)   (74.7)   (40.0)  
Cash from Investing Activ.   (24.1)   (23.1)   (99.3)   (74.7)   (40.0)  
Dividends Paid   (5.2)   (5.2)   (5.2)   (5.2)   (6.5)  
Sale (or purchase) of stock   -   -   -   -   -  
Debt Issuance (Pay Down)   -   -   74.4   24.4   -  
Cash from Financing Activ.   (5.2)   (5.2)   69.2   19.2   (6.5)  
Change in Cash   10.3   24.3   22.0   (10.6)   8.3  
Mydeco Stock Price   $7.39   $2.52   $4.39   $9.04   $10.25  

Answer 1

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