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    Group Assignment 2

    Uploaded by

    sebsibeboki01
    This document provides the financial statements and industry financial ratios for Highlight Company for the years 2019-2021. Students are asked to calculate and interpret various ratios to analyze the company's liquidity, asset usage, debt levels, and profitability compared to industry averages. The assignment must be submitted on the final exam date and clear computations showing work are required to receive full marks.

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

    Group Assignment 2

    Uploaded by

    sebsibeboki01
    14 views2 pages
    This document provides the financial statements and industry financial ratios for Highlight Company for the years 2019-2021. Students are asked to calculate and interpret various ratios to analyze the company's liquidity, asset usage, debt levels, and profitability compared to industry averages. The assignment must be submitted on the final exam date and clear computations showing work are required to receive full marks.

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    Group Assignment 2

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    This document provides the financial statements and industry financial ratios for Highlight Company for the years 2019-2021. Students are asked to calculate and interpret various ratios to analyze the company's liquidity, asset usage, debt levels, and profitability compared to industry averages. The assignment must be submitted on the final exam date and clear computations showing work are required to receive full marks.

    Copyright:

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

    Group Assignment 2

    Uploaded by

    sebsibeboki01
    This document provides the financial statements and industry financial ratios for Highlight Company for the years 2019-2021. Students are asked to calculate and interpret various ratios to analyze the company's liquidity, asset usage, debt levels, and profitability compared to industry averages. The assignment must be submitted on the final exam date and clear computations showing work are required to receive full marks.

    Copyright:

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

    Group ssignment 2

    For the course Accounting and Finance for Mangers


    Target group: MBA students
    Requirements
     Legible and neat Page format will be rewarded.
     Strictly follow the instruction given below.
     The assignment paper is to be submitted on final exam date.
     Clear and observable computation is required
     The project will be marked out of 25%.
     Doing this assignment negligently will reduce your point.

    Instruction: Show your computation (NB. Neatness and clear presentations has its own values)

    1. The following information relates to highlight company. Prepare Financial Statement Analysis as
    required below.

    Highlight Company
    Statement of Profit or loss
    for Year Ending December 31, 2019-2021
    2021 2020 2019
    Sales 7,035,600.00 6,034,000.00 3,432,000.00
    Cost of goods sold 5,875,992.00 5,528,000.00 2,864,000.00
    Gross profit 1,159,608.00 506,000.00 568,000.00
    Total operating expenses 666,960.00 636,948.00 377,572.00
    EBIT 492,648.00 (130,948.00) 190,428.00
    Interest expense 70,008.00 136,012.00 43,828.00
    EBT 422,640.00 (266,960.00) 146,600.00
    Taxes (40%) 169,056.00 (106,784.00) 58,640.00
    Net income 253,584.00 (160,176.00) 87,960.00

    Highlight Company
    Statement of Positions
    December 31, 2019-2021
    2021 2020 2019
    Cash 85,632.00 7,282.00 57,600.00
    Accounts receivable 878,000.00 632,160.00 351,200.00
    Inventories 1,716,480.00 1,287,360.00 715,200.00
    Total current assets 2,680,112.00 1,926,802.00 1,124,000.00
    Gross fixed assets 1,197,160.00 1,202,950.00 491,000.00
    Less accumulated depreciation 380,120.00 263,160.00 146,200.00
    Net fixed assets 817,040.00 939,790.00 344,800.00
    Total assets 3,497,152.00 2,866,592.00 1,468,800.00
    LIABILITIES AND EQUITY
    Accounts payable 436,800.00 524,160.00 145,600.00
    Notes payable 300,000.00 636,808.00 200,000.00

    1
    Accruals 408,000.00 489,600.00 136,000.00
    Total current liabilities 1,144,800.00 1,650,568.00 481,600.00
    Long-term debt 400,000.00 723,432.00 323,432.00
    1,544,800.00 2,374,000.00 805,032.00
    Common stock 1,721,176.00 460,000.00 460,000.00
    Retained earnings 231,176.00 32,592.00 203,768.00
    Total equity 1,952,352.00 492,592.00 663,768.00
    Total liabilities and equity 3,497,152.00 2,866,592.00 1,468,800.00

    Industry Average for three years


    i. Current Ratio 2.74
    ii. Acid-Test (Quick) 1.00
    iii. Debt-to-Equity 1.33
    iv. Debt-to-Total-Assets 0.50
    v. Total Capitalization 0.35
    vi. Interest Coverage 4.25
    vii. Receivable Turnover 9.00
    viii. Average Collection Period 40.55
    ix. Inventory Turnover 6.10
    x. Total Asset Turnover 2.60
    xi. Gross Profit Margin 0.17
    xii. Net Profit Margin 0.03
    xiii. Return on assets 9.10
    xiv. Return on Equity 0.18

    Required: calculate ratio analysis with detailed interpretation

    A. Liquidity ratio
    B. Activity ratio
    C. Debt management ratio
    D. Profitability ratio

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