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2012 2013 Industry Income Statement 2012 2013 CAVCL CA-INVI/CL 500,000 580,000 Current Ratio 310,000 360,000 Quick Ratio 110,000 125,000 Revenue Other Operating Expenses Depreciation Net Operating Expenses437,500 504,500 Inventory Turnover COGS/INV 62,500 75,500 Days Sales Outstanding AR/IREV/365) 18,500 21,000 Fixed Asset Turnover REV/FA 44,000 54,500 Total Asset Turnover REV/TA Interest Expense 28,600 35425 Debt Management (Leverae: Net Income (LTD+NPTA Debt to Assets Liabilities to Assets (CL+LTDMTA Times Interest Earned EBIT/INT Equity Multiplier Balance Sheet TA/Total Equity Assets: 10,000 14,500 62,500105,000 Profitability 95,000137.000 Net Profit Margin NVREV 167,500 256,500 Operating Profit Margin EBIT/REV Accounts Receivable Inventory Total Current Assets Fixed Assets Accumulated Depreciation Net Fixed Assets Total Assets 0.105 (REV-COGSVREV Gross Margin Return on Assets 163,000 203,000 Return on Equity NEQUITY 330,500 459.500 0.141 m/Sales Sales/TA TA/EQ NVEQ 50,000 84,000 Dupont Ratio 44,000 122,000 Accounts Payable Notes Payable x x = Total Current Liabilities Long Term Debt Common Stock Retained Earnings Total Common Equity Total Liabilities & Equity330500 103,000 85,000 217,500 80,000 2013 0.141 0,000 50,000 Industry 0.057x 1.640 92,500 112,000 142500 162,000 459500 What is a ratio? Give an example from daily life. What are two things that are required to make ratios meaningful? What are two ways to compare ratios to increase their meaningfulness? On the attached Template, calculate the ratios and the Dupont Equation What happened to Liquidity year over year? How does it compare to industry? Is Inventory turnover better or worse than last year? Compared to industry? What does the inventory turnover describe with respect to sales? How does Days Sales Outstanding compare to industry? What does this ratio describe? Did the change from last year create or use cash? Do we use more or less debt than the industry? Is our return consistent with our use of debt? o. Using the Dupont Equation, compared to the industry, what area could we possibly improve on? we could improve the area mentioned in question 10 to industry levels, what ould be the resulting ROE? 2012 2013 Industry Income Statement 2012 2013 CAVCL CA-INVI/CL 500,000 580,000 Current Ratio 310,000 360,000 Quick Ratio 110,000 125,000 Revenue Other Operating Expenses Depreciation Net Operating Expenses437,500 504,500 Inventory Turnover COGS/INV 62,500 75,500 Days Sales Outstanding AR/IREV/365) 18,500 21,000 Fixed Asset Turnover REV/FA 44,000 54,500 Total Asset Turnover REV/TA Interest Expense 28,600 35425 Debt Management (Leverae: Net Income (LTD+NPTA Debt to Assets Liabilities to Assets (CL+LTDMTA Times Interest Earned EBIT/INT Equity Multiplier Balance Sheet TA/Total Equity Assets: 10,000 14,500 62,500105,000 Profitability 95,000137.000 Net Profit Margin NVREV 167,500 256,500 Operating Profit Margin EBIT/REV Accounts Receivable Inventory Total Current Assets Fixed Assets Accumulated Depreciation Net Fixed Assets Total Assets 0.105 (REV-COGSVREV Gross Margin Return on Assets 163,000 203,000 Return on Equity NEQUITY 330,500 459.500 0.141 m/Sales Sales/TA TA/EQ NVEQ 50,000 84,000 Dupont Ratio 44,000 122,000 Accounts Payable Notes Payable x x = Total Current Liabilities Long Term Debt Common Stock Retained Earnings Total Common Equity Total Liabilities & Equity330500 103,000 85,000 217,500 80,000 2013 0.141 0,000 50,000 Industry 0.057x 1.640 92,500 112,000 142500 162,000 459500 What is a ratio? Give an example from daily life. What are two things that are required to make ratios meaningful? What are two ways to compare ratios to increase their meaningfulness? On the attached Template, calculate the ratios and the Dupont Equation What happened to Liquidity year over year? How does it compare to industry? Is Inventory turnover better or worse than last year? Compared to industry? What does the inventory turnover describe with respect to sales? How does Days Sales Outstanding compare to industry? What does this ratio describe? Did the change from last year create or use cash? Do we use more or less debt than the industry? Is our return consistent with our use of debt? o. Using the Dupont Equation, compared to the industry, what area could we possibly improve on? we could improve the area mentioned in question 10 to industry levels, what ould be the resulting ROE

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