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17 Jul 2018
Marion has just received the year-end financial statements shown below. Evaluate the state of her company from the perspective of shareholders. What should Marion conclude based on this, and what possible actions can be recommended? Marion's, Inc. Income Statement 2012 Cash Flow Statement Revenue $3,906,000 Balance Forward $212,500 Returns, Credits, etc. ($1,400) Net Income $124,480 Net Sales (Revenue) $3,904,600 Depreciation $75,000 Direct Costs Change in Working Capital ($17,140) Labor ($1,450,000) Capital Expenditures ($70,000) Materials ($989,000) Financial Activities ($75,000) Cost of Goods Sold (COGS) ($2,439,000) Net change in cash $37,340 Gross Margin $1,465,600 Ending Cash Balance $249,840 Selling General and Admin. Marketing ($400,000) Research and Development ($350,000) Administration ($250,000) Other ($200,000) Depreciation ($75,000) S G & A ($1,275,000) Earnings Before Interest and Taxes (EBIT) $190,600 Interest Expense/Income ($35,000) Pre-tax Income $155,600 Income Tax @ 20% ($31,120) Net Income $124,480 Balance Sheets, 2011 Assets Liabilities Current Assets Current Liabilities Cash $249,840 Accounts Payable $125,000 Accounts receivable $60,160 Taxes Payable $10,000 Finished Goods Inventory $40,000 Total Current Liabilities $135,000 Materials Inventory $85,000 Long Term Liabilities Total Current Assets $435,000 Bank Loans @ 6% $125,000 Mortgage @ 4.5% $460,000 Long term Assets Total Long Term Liabilities $585,000 Buildings $1,050,000 Equipment and machines $80,000 Capital Stock $650,000 Other $100,000 Retained Earnings $295,000 Total Fixed Assets $1,230,000 Stockholders Equity $945,000 Total Assets $1,665,000 Total Liabilities and Stockholders equity $1,665,000 Current Stock Price $44.25 Current Outstanding Shares 5,000
Marion has just received the year-end financial statements shown below. Evaluate the state of her company from the perspective of shareholders. What should Marion conclude based on this, and what possible actions can be recommended? | ||||||
Marion's, Inc. | ||||||
Income Statement | 2012 | Cash Flow Statement | ||||
Revenue | $3,906,000 | Balance Forward | $212,500 | |||
Returns, Credits, etc. | ($1,400) | Net Income | $124,480 | |||
Net Sales (Revenue) | $3,904,600 | Depreciation | $75,000 | |||
Direct Costs | Change in Working Capital | ($17,140) | ||||
Labor | ($1,450,000) | Capital Expenditures | ($70,000) | |||
Materials | ($989,000) | Financial Activities | ($75,000) | |||
Cost of Goods Sold (COGS) | ($2,439,000) | Net change in cash | $37,340 | |||
Gross Margin | $1,465,600 | Ending Cash Balance | $249,840 | |||
Selling General and Admin. | ||||||
Marketing | ($400,000) | |||||
Research and Development | ($350,000) | |||||
Administration | ($250,000) | |||||
Other | ($200,000) | |||||
Depreciation | ($75,000) | |||||
S G & A | ($1,275,000) | |||||
Earnings Before Interest and Taxes (EBIT) | $190,600 | |||||
Interest Expense/Income | ($35,000) | |||||
Pre-tax Income | $155,600 | |||||
Income Tax @ 20% | ($31,120) | |||||
Net Income | $124,480 | |||||
Balance Sheets, 2011 | ||||||
Assets | Liabilities | |||||
Current Assets | Current Liabilities | |||||
Cash | $249,840 | Accounts Payable | $125,000 | |||
Accounts receivable | $60,160 | Taxes Payable | $10,000 | |||
Finished Goods Inventory | $40,000 | Total Current Liabilities | $135,000 | |||
Materials Inventory | $85,000 | Long Term Liabilities | ||||
Total Current Assets | $435,000 | Bank Loans @ 6% | $125,000 | |||
Mortgage @ 4.5% | $460,000 | |||||
Long term Assets | Total Long Term Liabilities | $585,000 | ||||
Buildings | $1,050,000 | |||||
Equipment and machines | $80,000 | Capital | Stock | $650,000 | ||
Other | $100,000 | Retained Earnings | $295,000 | |||
Total Fixed Assets | $1,230,000 | Stockholders Equity | $945,000 | |||
Total Assets | $1,665,000 | Total Liabilities and Stockholders equity | $1,665,000 | |||
Current Stock Price | $44.25 | |||||
Current Outstanding Shares | 5,000 |
Sixta KovacekLv2
19 Jul 2018