Question:If you could provied with answers and
explanations that will be much appreciated!!
Teal Inc. manufactures...
Question
If you could provied with answers and
explanations that will be much appreciated!!
If you could provied with answers and
explanations that will be much appreciated!!
Teal Inc. manufactures...
Teal Inc. manufactures a variety of consumer products. The company's founders have run the company for 30 years and are now interested in retiring. Consequently, they are seeking a purchaser who will continue its operations, and a group of investors, Morgan Inc., is looking into the acquisition of Teal. To evaluate its financial stability and operating efficiency, Teal was requested to provide the latest financial statements and selected financial ratios. Summary information provided by Teal is as follows. Teal Inc. Income Statement For the Year Ended November 30, 2021 (in thousands) Sales (net) $ 30,630 Interest income 630 Total revenue 31,260 Costs and expenses Cost of goods sold 17,730 Selling and administrative expenses 3,680 Depreciation and amortization expense 2,020 Interest expense 1,030 Total costs and expenses 24,460 Income before taxes 6,800 Income taxes 2,720 Net income $ 4,080
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Teal
Statement of
Earnings
2021
Sales
30,630.00
Cost of goods sold
(17,730.00)
Gross
Profit
12,900.00
Less: Other expenses and
income
Selling and admin expense
(3,680.00)
Depreciation and amortization
expense
(2,020.00)
Interest Income
630.00
Income before interest and
taxes
7,830.00
Less: Interest expense
(1,030.00)
Income before
tax
6,800.00
Less: Tax expense
(2,720.00)
Net
Income
4,080.00
Statement of Financial
Position
Assets
2021
2020
Cash
530.00
630.00
Short Term Investments
430.00
330.00
Accounts Receivable (net)
3,330.00
3,030.00
Inventory
6,130.00
5,530.00
Total Current
Assets
10,420.00
9,520.00
Property, Plant & equipment
(Net)
7,230.00
7,130.00
Total
Assets
17,650.00
16,650.00
Liabilities &
Stockholders' Equity
Liabilities
2021
2020
Accounts Payable
3,830.00
3,530.00
Income Tax Payable
1,030.00
930.00
Accrued Expenses
1,830.00
1,530.00
Current
Liabilities
6,690.00
5,990.00
Long Term-
Liabilities
Long term debt
2,130.00
1,930.00
Total Long Term-
Liabilities
2,130.00
1,930.00
Total
Liabilities
8,820.00
7,920.00
Stockholders'
Equity
Common Stock, $ 1 par
2,830.00
2,830.00
Pain in capital in excess of
par
1,130.00
1,130.00
Retained Earnings
4,870.00
4,770.00
Total Stockholders'
Equity
8,830.00
8,730.00
Total Liabilities &
Stockholders' Equity
17,650.00
16,650.00
Quick
Assets
2021
Cash
530.00
Short Term Investments
430.00
Accounts Receivable (net)
3,330.00
Total Quick
Assets
4,290.00
2021
2020
Accounts Receivable (Net)
3,330.00
3,030.00
Average Accounts Receivable
(Net)
3,180.00
Inventory
6,130.00
5,530.00
Average
Inventory
5,830.00
Total Assets
17,650.00
16,650.00
Average Total
Assets
17,150.00
Final
Answer
2021
2020
2019
Industry
Explanation
Current
Ratio
Current Assets/Current
Liabilities
1.56
1.59
1.60
1.76
Current ratio is decreasing every year
and is lower than industry average. It means though company is able
to pay of its short term liabilities still its ability to grow is
decreasing every year.
Acid Test
Ratio
Quick Assets/Current
Liabilities
0.64
0.67
0.63
0.86
Quick ratio is decreasing every year
and is lower than industry average. It means though company has
sufficient liquid assets to pay of its short term liabilities still
its growth is deaccelerating every year.
Times Interest
Earned
Income before interest and taxes/
Interest expense
7.60
8.68
8.83
8.58
Times Interest earned is decreasing
every year and is lower than industry average. It means though
company has sufficient income to pay of its interest cost still its
growth is deaccelerating every year.
Profit Margin on
sales
Net Income/ Sales
13.32%
13.33%
12.23%
13.13%
Profit Margin on sales is same every
year.
Asset
turnover
Sales Revenue/Average Total
Assets
1.79
1.97
1.96
1.97
Asset turnover ratio is decreasing
every year and is lower than industry average.
If you could provie an answer and
explanation that would be great!
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If you could provied with answers and
explanations that will be much appreciated!!
If you could provie an answer and
explanation that would be great!
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