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********Answer Ratio Analysis in bold blue********
********Answer Questions A, B, C, D*******
1 12/7/2016 3 Requirement: Conduct Ratio Analysis 4 5 Joshua & White Technologies: December 31 Balance Sheets 6 (Thousands of Dollars) 7 8 Assets 2013 2012 9 Cash and cash equivalents $21,000 $20,000 10 Short-term investments 3,759 3,240 11 Accounts Receivable 52,500 48,000 12 Inventories 84.000 56,000 13 Total current assets $161,259 $127,240 14 Net fixed assets 218,400 200,000 15 Total assets $379.652 $327.240 16 17 Liabilities and equity 18 Accounts payable $33,600 $32,000 19 Accruals 12,600 12,000 20 Notes payable 19,929 6,480 21 Total current liabilities $66,129 $50,480 22 Long-term debt 67,662 58,320 23 Total liabilities $133,791 $108,800 24 Common stock 183,793 178,440 25 Retained Earnings 62,075 40,000 26 Total common equity $245,868 $218.440 27 Total liabilities and equity $379.659 $327.240 28 9 Joshua & White Technologies December 31 Income Statements 30 (Thousands of Dollars) 31 2013 2012 B2 Sales $420,000 $400,000 3 COGS except excluding depr. and amort. 300,000 298,000 4 Depreciation and Amortization 19,660 18,000 85 Other operating expenses 27,600 22.000 B6 EBIT $72,740 $62,000 B7 Interest Expense 5,740 4,460 88 EBT $67,000 $57,540 39 Taxes (40%) 26,800 23,016 10 Net Income $40.200 $34.524 2.58 12 Common dividends $18,125 $17,262 23 Addition to retained earnings $22,075 $17,262 44 15 Other Data 2013 2012 16 Year-end Stock Price $90.00 $96.00 27 # of shares (Thousands) 4,052 4,000 #8 Lease payment (Thousands of Dollars) $20,000 $20,000 19 Sinking fund payment (Thousands of Dollars) $5,000 $5,000 50 51 Ratio Analysis 2013 2012 Industry Avg 52 Liquidity Ratios 53 Current Ratio 54 Quick Ratio 1.53 55 Asset Management Ratios 56 Inventory Turnover (Total COGS/Inventories) 7.69 57 Days Sales Outstanding 47.45 58 Fixed Assets Turnover 2.04 59 Total Assets Turnover 1.23 50 Debt Management Ratios 51 Debt Ratio (Total debt-to-assets) 20.0% 52 Liabilities-to-assets ratio 32.1% 53 Times-interest-earned ratio 15.33 54 EBITDA coverage ratio 55 Profitability Ratios 56 Profit Margin 8.86% 57 Basic Earning Power 19.48% 58 Return on Assets 10.93% 59 Return on Equity 16.10% 0 Market Value Ratios 71 Earnings per share NA 22 Price-to-earnings ratio 10.65 73 Cash flow per share NA 74 Price-to-cash flow ratio 7.11 275 Book Value per share NA 26 Market-to-book ratio 1.72 77 78 a. Has Joshua & White's liquidity position improved or worsened? Explain. 79 30 31 4.18 3 b. Has Joshua & White's ability to manage its assets improved or worsened? Explain. 4 5 6 7 8 c. How has Joshua & White's profitability changed during the last year? 9 0 1 d. Perform Du Pont analysis for Joshua & White for 2012 and 2013. 2 ROE = PM x TA Turnover x Equity Multiplier 2013 4 2012 3 Financial Statement Ratio Analysis
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