Question

A company has the following financial information for the last two years: Figures in $million as on Dec. 31 2019 Sales $1,200 Oper. Costs (exclud. Dep. & Amort.) $1,020 EBITDA $180 Dep. & Amort. $30 EBIT $150 Interest Expenses $21.70 EBT $128.30 Taxes (@25%) $32.1 Net Income $96.20 Common dividends $79.70 2018 $1,000 $850.00 $150 $25 $125 $20.20 $104.80 $26.20 $78.60 $61.30 Figures in $million as on Dec. 31 2019 2018 Assets: Cash and equivalents Accounts receivable Inventories 10 150 200 12 180 180 $372 300 $672 Total current assets Net plant & equipment Total assets $360 250 $610 Liabilities and equity Account payable Accrued expenses Notes payable Total current liabilities Long-term bonds Total liabilities Common stock (50 million shares) Retained earnings Common equity Total liabilities & Equity 108 72 67 $247 150 $397 50 225 $275 $672 90 60 51.5 $201.50 150 $351.50 50 208.5 $258.50 $610

Answer 1

Page No. Date 02 Koy Rations Prom the Five mujor. -Rahia abegonty (12 Liquidity Ration Clencat Assol Cunat licbility yoor 2018 - = 1.7102 Liquidity Ratio Year 2018 ) $360 201150 - 1.5oGo Liquidity Ratio $ 372 $247 derick 11 y Ratio Siaulition cash & marketable to Reciuchledy Chegent Liability 2018 z ovis a Ratio 10 tot 150 e 201150 - 0.794 2019 - duick Relio $247 0.777 &

Conclusis on Ratio Ll Config + has 1 If curent negative working capital 5 High Ouide Ratio - It moois Compony we livedly pay its short Dicbilities. tun T) Dibt -Enuity Ratio 2018 0.5802 Total Debt Total Shaw holder Equity 150 258.50 2017 iso - O susus 275

|Page No. Daic Profitability Rehing f" 42 a p margin Net Income Revique 2018 - $78.60 X1oua 7.864 Socie 2019 $ 96.20 X 100 A lou Ĉ 9.621. (6) operating profit Rohio EBI Reumu X low 12.5) 2018 = $ 125 $ooo 2019 = $ Iso 8200 12.5 y. tico (19) Return on Net Incont Aug totul Agreb : 12.897 2018 78.60 X 100 8610 14.3 Vi x (00 2012 96.20 $6720

( ii) Do Point Analysis Asset X Fincanal Loverage ROE = margin thhoun Finorial X ER I X BRIT B Nat Incow X Lrung EBIT Raumu EBT Tuhouet Aged Revezy Aug 1 Tr Aug squi Aug Arsch 2018 ROE 78.60 x 1gr.80 X XZS X Yoox Glo tto tower 25850 Toyogo = 30.40.1. 2019 Rosa 96-20 x 118.30 x ISO x 1200 X G72 128.30 Too 1200 672 275 34.981.b.