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    Illustration For Financial Analysis Using Ratio

    Uploaded by

    amahakt
    The document provides financial statements for Dire Company for 2009 and 2010, including balance sheets and income statements. It also provides industry average financial ratios for liquidity, asset management, debt management, profitability, and market value. The task is to evaluate Dire Company's performance for 2010 relative to 2009 and the industry averages using these five ratio categories.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Illustration For Financial Analysis Using Ratio

    Uploaded by

    amahakt
    6 views2 pages
    The document provides financial statements for Dire Company for 2009 and 2010, including balance sheets and income statements. It also provides industry average financial ratios for liquidity, asset management, debt management, profitability, and market value. The task is to evaluate Dire Company's performance for 2010 relative to 2009 and the industry averages using these five ratio categories.

    Original Description:

    financial modeling

    Original Title

    Illustration for Financial Analysis Using Ratio

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    © © All Rights Reserved

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    The document provides financial statements for Dire Company for 2009 and 2010, including balance sheets and income statements. It also provides industry average financial ratios for liquidity, asset management, debt management, profitability, and market value. The task is to evaluate Dire Company's performance for 2010 relative to 2009 and the industry averages using these five ratio categories.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    6 views2 pages

    Illustration For Financial Analysis Using Ratio

    Uploaded by

    amahakt
    The document provides financial statements for Dire Company for 2009 and 2010, including balance sheets and income statements. It also provides industry average financial ratios for liquidity, asset management, debt management, profitability, and market value. The task is to evaluate Dire Company's performance for 2010 relative to 2009 and the industry averages using these five ratio categories.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    Illustration for Financial Ratio Analysis

    Using the financial statements for Dire Company for the year 2009 and 2010 given below,
    evaluate the performance of the company using the five major groups of financial ratios in
    relation to the industry averages provided below.

    Dire Company
    Balance Sheet
    As at December 31 2010 2009
    Assets
    Cash and marketable securities 60,000 80,000
    Accounts Receivable 300,000 295,000
    Prepaid Insurance 25,000 20,000
    Inventories 615,000 415,000
    Total current assets 1,000,000 810,000
    Net plan and equipment 1,000,000 870,000
    Total Assets 2,000,000 1,680,000

    Liabilities and stockholders' equity


    Liabilities
    Accounts payable 200,000 90,000
    Accruals 50,000 70,000
    Notes Payable-Short term 60,000 60,000
    Total Current liability 310,000 220,000
    Long term bonds payable 754,000 580,000
    Total liabilities 1,064,000 800,000
    Stockholders' equity
    Preferred stock (2,000 shares outstanding) 40,000 40,000
    Common stock (10,000 shares outstanding) 130,000 130,000
    Retained earnings 766,000 710,000
    Total stockholders Equity 936,000 880,000
    Total liabilities and stockholders' equity 2,000,000 1,680,000
    Dire Company
    Income Statement
    For the year ended December 31 2010 2009
    Sales 3,125,000 2,955,000
    Sales returns and allowances 125,000 105,000
    Net sales 3,000,000 2,850,000
    Costs of goods sold 2,150,000 1,950,000
    Gross profit 850,000 900,000
    Operating expenses excluding depreciation 466,200 547,000
    Earnings before interest, taxes and depreciation 383,800 353,000
    Depreciation 100,000 90,000
    Earnings before interest and taxes (EBIT, or operating income) 283,800 263,000
    Less interest 88,000 60,000
    Earnings before taxes (EBT) 195,800 203,000
    Taxes (40%) 78,320 81,200
    Net income before preferred dividends 117,480 121,800
    Preferred dividends 4,000 4,000
    Net income available for common stockholders 113,480 117,800
    Common dividends 57,500 53,000
    Addition to retained earnings 55,980 64,800

    Additional Data:
     Bonds (long-term debt) are settled with annual payment of Br 50,000.
     Annual lease payment of Br 40,000 was included in the operating expenses during each period.
     Net purchases for the 2009 were Br 1,095,000.
     Common stock price per share was Br 180.00 during 2010 and Br 190 during 2009.

    Industry Data
    Liquidity Asset Mgt. Debt Mgt. Profitability Market Val

    CR 4.2 T ITO 5t DR 45 % PM 5% P/E 18%


    QR 2.1 T IP 73 d DE 82 % OPM 10.2% P/CF 10 t
    DSO 30 d EM 1.8 t GPM 30% BV/S 2.5 t
    ART 12 t TIE 5t BEP 16%
    FATO 3t FCCR 2.5 t ROA 8%
    TATO 1.8 t CC 6t ROE 15%
    APP 35 d EPS Br13

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