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Financial Statements
ABC CORPORATION
Balance Sheet
Year Ended December 31 (in $ millions)
| Assets | 2006 | 2005 | | Liabilities & Stockowners Equity | 2006 | 2005 |
| Current Assets | | | | Current Liabilities | | |
| Cash | 22.2 | 19.5 | | Accounts Payable | 29.2 | 24.5 |
| Accounts Receivables | 18.5 | 13.2 | | Notes Payable / Short-Term Debt | 4.5 | 3.2 |
| Inventories | 14.2 | 14.3 | | Current Maturities of Long-Term Debt | 13.3 | 12.3 |
| Other Current Assets | 2.0 | 1.0 | | Other Current Liabilities | 3.0 | 4.0 |
| Total Current Assets | 56.9 | 48.0 | | Total Current Liabilities | 50.0 | 45.0 |
| Long Term Assets | | | | Long-Term Liabilities | | |
| Land | 22.2 | 20.7 | | Long-Term Debt | 98.9 | 56.3 |
| Buildings | 36.5 | 30.5 | | Capital Lease Obligations | --- | --- |
| Equipment | 39.7 | 33.2 | | Total Debt | 98.9 | 56.3 |
| Less Accumulated Depreciation | (18.7) | (17.5) | | Deferred Taxes | 7.6 | 7.4 |
| Net Property, Plant, and Equipment | 79.7 | 66.9 | | Other Long-Term Liabilities | ---- | ---- |
| Goodwill | 22.0 | --- | | Total Long Term Liabilities | 106.5 | 63.7 |
| Other Long-Term Assets | 21.0 | 14.0 | | Total Liabilities | 156.5 | 108.7 |
| Total Long Term Assets | 122.7 | 80.9 | | Stockholders Equity | 23.1 | 20.2 |
| Total Assets | 179.6 | 128.9 | | Total Liabilities and Stockholders Equity | 179.6 | 128.9 |
ABC Corporation
Income Statement
Year Ended December 31 ($ in millions)
| | 2006 | 2005 |
| Total Sales | 188.8 | 176.1 |
| Cost of Sales | (153.4) | (147.3) |
| Gross Profit | 35.4 | 28.8 |
| Selling, General and Administration Expenses | (13.5) | (13.0) |
| Research and Development | (9.2) | (7.6) |
| Depreciation and Amortization | (2.2) | (1.1) |
| Operating Income | 10.5 | 7.1 |
| Other Income | ---- | ---- |
| Earnings Before Interest and Tax (EBIT) | 10.5 | 7.1 |
| Interest Income (or Expense) | (7.7) | (4.6) |
| Pretax Income | 2.8 | 2.5 |
| Taxes | (0.7) | (0.6) |
| Net Income | 2.1 | 1.9 |
| Earnings per share | $0.556 | $0.528 |
| Diluted Earnings Per Share | $0.526 | $0.500 |
ABC Corporation has 3.8 million shares outstanding and shares are trading for $15
Calculate the following for 2005. (30PTS, Two Points Each)
Quick Ratio
Current Ratio
Market to Book Ratio
Debt to Equity Ratio
Enterprise Value
EPS
Operating Margin
Net Profit Margin
Return on Equity
P/E Ratio
Inventory Turnover
Days of Sales Outstanding
ROA
ROE
Did the tax rate increase from 2005 to 2006? If so, by how much?
Answer & Explanation
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