Analysis of a company's financial statements: Below are simplified versions of the balance sheet and income statement for Toys by Tom, Inc. What is Toys by Tom, Inc. return on assets (ROA)?
6.9%
0.86
18%
1.2
Income Statement â Year ending Dec 31 2006
Sales $12.00
Less Cogs 8.40
Less Depreciation 0.80
Gross Profit 2.80
Less â SG & A 1.20
Operating Profit 1.60
Less â Interest Expense 0.25
Profit before tax 1.35
Less â Income Tax 0.54
Net Income 0.81
Items in $1000
Balance Sheet
Assets Liablities and owners equity
Current assets Current Liabilities
Cash $0.50 Current Portion, LTD 0.75
Accts receivables 1.00 Accts Payables 2.50
Inventories 2.50 Other Acrued expenses 1.75
Total Current assets 4.00 Revolving credit,bank 2.00
Next fixed assets 10.00 Total Current Liablities 7.00
Total assets 14.00 Long term mortgage debt 2.50
Net worth 4.50
Total Liab and net worth 14.00
Analysis of a company's financial statements: Below are simplified versions of the balance sheet and income statement for Toys by Tom, Inc. What is Toys by Tom, Inc. return on assets (ROA)?
6.9%
0.86
18%
1.2
Income Statement â Year ending Dec 31 2006
Sales $12.00
Less Cogs 8.40
Less Depreciation 0.80
Gross Profit 2.80
Less â SG & A 1.20
Operating Profit 1.60
Less â Interest Expense 0.25
Profit before tax 1.35
Less â Income Tax 0.54
Net Income 0.81
Items in $1000
Balance Sheet
Assets Liablities and owners equity
Current assets Current Liabilities
Cash $0.50 Current Portion, LTD 0.75
Accts receivables 1.00 Accts Payables 2.50
Inventories 2.50 Other Acrued expenses 1.75
Total Current assets 4.00 Revolving credit,bank 2.00
Next fixed assets 10.00 Total Current Liablities 7.00
Total assets 14.00 Long term mortgage debt 2.50
Net worth 4.50
Total Liab and net worth 14.00
Related questions
need some help filling out my balance and income statement using the following information given.
Using a Percentage of Sales method from 2017 results and the Given Information below, derive the 2018 Pro Forma (forecast) Income Statement and Balance Sheet (i.e. fill in the 2018 cells with the appropriate amounts).
Is there a âplugâ needed? If so, how much is it? What does it tell you about Scarletâs forecasted 2018 financial projections and what could Scarlet do to remedy the situation?
Based on Scarletâs 2017 & 2016 financials, what is her businessâs Sustainable Growth Rate (SGR)?
Given Information:
Scarlet believes that her 2018 Revenue figure will be 12% higher than her 2017 Revenue.
She estimates that her SG&A will go up by $1,000 from 2016-2017 since she plans on getting a part-time employee.
She doesnât intend to pay any dividends for 2018.
For her Balance Sheet forecasted items she uses only 2017 results, rather than taking an average of the results (average of the % of sales) from 2016 and 2017.
Scarlet assumes Interest Expense, Curr Portion of LT Debt, and Bank Loan Payable will remain the same in 2018 as they were in 2017.
Scarlet plans on issuing $1,000 of (new) Common Stock in 2018.
Scarlet determines that she will need to spend $3,700 for a new Lemon Press machine, which will be her entire CAPEX for 2018. We will assume depreciation will be $200 for this item for 2018, and the yearly depreciation/amortization expense for the rest of Scarletâs PPE will remain the same as it was in 2017 (and assume no asset sales were made in 2017).
Intangibles and Goodwill will remain unchanged in 2018.
She is not planning on disposing of any of her assets (i.e. no asset sales).
| Income Statement | ||
| 2018 | 2017 | |
| Sales / Revenue | 46,592 | 41,600 |
| Cost of Goods Sold (COGS) | ? | 24,960 |
| Gross Profit | ? | 16,640 |
| Selling, General & Administrative (SG&A) | 13,940 | 12,940 |
| Operating Profit | ? | 3,700 |
| Interest Expense | ? | 2,000 |
| Income Before Taxes | ? | 1,700 |
| Income Tax Expense | ? | 595 |
| Net Income | ? | 1,105 |
| Assume No Dividends Paid |
| Balance Sheet | |||||||||||
| Assets | Liabilities and Stockholders' Equity | ||||||||||
| Current Assets: | 2018 | 2017 | 2016 | Current Liabilities: | 2018 | 2017 | 2016 | ||||
| Cash | ? | 2,500 | 5,495 | A/P | ? | 1,100 | 300 | ||||
| A/R | ? | 800 | 1,300 | Deferred Revenue | ? | 700 | 1,000 | ||||
| Inventory | ? | 2,900 | 1,600 | Curr Portion of LT Debt | ? | 2,200 | 5,300 | ||||
| Prepaid Rent | ? | 2,200 | 1,800 | Wages Payable | ? | 2,600 | 4,600 | ||||
| Prepaid Insurance | ? | 1,400 | 1,900 | Tot Curr Liab | ? | 6,600 | 11,200 | ||||
| Tot Curr Assets | ? | 9,800 | 12,095 | ||||||||
| LT Liab | |||||||||||
| LT Assets | Bank Loan Payable | ? | 5,500 | 3,300 | |||||||
| PPE, Gross | ? | 9,500 | 5,500 | Tot Liab | ? | 12,100 | 14,500 | ||||
| Accumul Depr | ? | 2,800 | 2,000 | ||||||||
| PPE, Net | ? | 6,700 | 3,500 | Stockholders' Equity | |||||||
| Common Stock | 4,300 | 3,300 | 1,100 | ||||||||
| Intangibles | ? | 3,000 | 3,000 | Retained Earnings | ? | 5,100 | 3,995 | ||||
| Goodwill | ? | 1,000 | 1,000 | Total Stockholders' Equity | ? | 8,400 | 5,095 | ||||
| Total Assets | ? | 20,500 | 19,595 | Total Liab + Stockholders' Equity | ? | 20,500 | 19,595 | ||||
| 2a. | PLUG (if necessary): | ? | |||||||||
| What it tells you: | ? | ||||||||||
| 2b. | Sustainable Growth Rate (SGR): | ? | |||||||||
1. Ten years ago, the Circus Corp.sold a 20-year bond issue with a 9 percent annual coupon rate and a3 percent call premium. Today, Circus called the bonds. The bondsoriginally were sold at their face value of $1,000. Compute therealized rate of return (yield to call) for investors who purchasedthe bonds when they were issued and who surrender them today inexchange for the call price.
2. (EXCELTEMPLATE) Grass Whackerâs is considering whether or not torefund a $90 million, 6 percent coupon, 30 year bond issue that wassold 8 years ago. It is amortizing $1.8 million of flotation costsover the issueâs 30-year life. A new 22-year issue would carry aninterest rate of 5.35 percent. A call premium of 5 percent would berequired to retire the old bonds and flotation costs on the newissue would be $1.35 million (also to be amortized). GrassWhackerâs marginal tax rate is 34 percent. The new bonds would beissued 1 month before the old bonds are called, with the proceedsbeing invested in short-term securities returning 1.5 percentannually. What is the NPV of the refund? Use the NPV function inExcel and the PV function in Excel. Answers should be the same.
Use the Excel Template andthe following information to answer the next threequestions:
Peterson Packaging Inc. does not currently pay dividends. Thecompany will start with a $0.50 dividend at the end of year threeand grow it by 10% for each of the next seven years until it nearlyreaches $1.00. After seven years of growth, it will fix itsdividend at $1.00 forever. The required return on the stock is15%.
3. (EXCEL TEMPLATE)What is the current stock price? Use the NPV function.
4. (EXCEL TEMPLATE)What is the expected stock price in years 1-10? Use the NPVfunction.
5. (EXCEL TEMPLATE)Calculate the dividend yield and capital gains yield that aninvestor should expect for each year.
Use the financial statements shown below to answer the nextthree questions. Free cash flow is expected to grow at 4 percentafter 2019. The weighted average cost of capital is 6.9 percent.The bonds are currently selling at 103% of par. The preferred stockhas a current market value of $51.51 million.
Balance Sheet (in millions)
| Actual 2018 | Projected 2019 | Actual 2018 | Projected 2019 | ||
Cash | 81.90 | 61.60 | Accounts payable | 26.10 | 22.20 |
Marketable securities | 53.80 | 54.20 | Notes payable | 101.00 | 4.70 |
Accounts Receivable | 26.40 | 27.00 | Accruals | 8.00 | 7.37 |
Inventory | 198.20 | 186.90 | Total current liabilities | 135.10 | 34.27 |
Total Current Assets | 360.30 | 329.70 | Long term bonds | 9.20 | 4.50 |
Preferred Stock | 50.20 | 52.40 | |||
Common stock | 230.00 | 230.00 | |||
Retained earnings | 307.00 | 367.23 | |||
Net fixed assets | 371.20 | 358.70 | Total common equity | 537.00 | 597.23 |
Total assets | 731.50 | 688.40 | Total liabilities & equity | 731.50 | 688.40 |
Income Statement (in millions)
Actual 2018 | Projected 2019 | |
Sales | 907.30 | 955.10 |
Operating expenses | 764.40 | 802.80 |
Depreciation | 21.30 | 21.30 |
Earnings before interest & taxes | 121.90 | 131.00 |
Interest | 0.60 | 0.60 |
Earnings before taxes | 121.30 | 130.40 |
Taxes | 45.90 | 50.10 |
Net income before preferred dividends | 75.40 | 80.30 |
Preferred dividends | 2.50 | 1.60 |
Net Income available for common | 72.90 | 78.70 |
Common dividends | 16.40 | 18.47 |
Addition to retained earnings | 56.50 | 60.23 |
Number of shares (in millions) | 12.70 | 12.70 |
6. What is the free cash flow for 2019?
7. What is the value of operations as of 2018?
8. What is the price per share for 2018?
