Scribd
Upload
431 views2 pages

Ch03 P15 Build A Model

Joshua & White Technologies' balance sheet shows that its current ratio improved from 2.58 in 2010 compared to 1.53 in 2009, indicating an improved liquidity position. Its inventory turnover ratio also increased from 7.69 to 8.86, demonstrating better asset management. The company's profit margin and return on assets both increased from 2010 to 2009, showing enhanced profitability.

Uploaded by

0302038
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
431 views2 pages

Ch03 P15 Build A Model

Joshua & White Technologies' balance sheet shows that its current ratio improved from 2.58 in 2010 compared to 1.53 in 2009, indicating an improved liquidity position. Its inventory turnover ratio also increased from 7.69 to 8.86, demonstrating better asset management. The company's profit margin and return on assets both increased from 2010 to 2009, showing enhanced profitability.

Uploaded by

0302038
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
You are on page 1/ 2

4/16/2010

Chapter 3. Solution to 3-15


Joshua & White Technologies: December 31 Balance Sheets
(Thousands of Dollars)
Assets
Cash and cash equivalents
Short-term investments
Accounts Receivable
Inventories
Total current assets
Net fixed assets
Total assets

2010
$21,000
3,759
52,500
84,000
$161,259
218,400
$379,659

2009
$20,000
3,240
48,000
56,000
$127,240
200,000
$327,240

Liabilities and equity


Accounts payable
Accruals
Notes payable
Total current liabilities
Long-term debt
Total liabilities
Common stock
Retained Earnings
Total common equity
Total liabilities and equity

$33,600
12,600
19,929
$66,129
67,662
$133,791
183,793
62,075
$245,868
$379,659

$32,000
12,000
6,480
$50,480
58,320
$108,800
178,440
40,000
$218,440
$327,240

Joshua & White Technologies December 31 Income Statements


(Thousands of Dollars)
2010
Sales
$420,000
Expenses excluding depr. and amort.
327,600
EBITDA
$92,400
Depreciation and Amortization
19,660
EBIT
$72,740
Interest Expense
5,740
EBT
$67,000
Taxes (40%)
26,800
Net Income
$40,200

2009
$400,000
320,000
$80,000
18,000
$62,000
4,460
$57,540
23,016
$34,524

Common dividends
Addition to retained earnings

$18,125
$22,075

$17,262
$17,262

Other Data
Year-end Stock Price
# of shares (Thousands)
Lease payment (Thousands of Dollars)
Sinking fund payment (Thousands of Dollars)

2010
$90.00
4,052
$20,000
$0

2009
$96.00
4,000
$20,000
$0

Ratio Analysis
Liquidity Ratios
Current Ratio
Quick Ratio
Asset Management Ratios
Inventory Turnover
Days Sales Outstanding
Fixed Assets Turnover
Total Assets Turnover
Debt Management Ratios
Debt Ratio
Times-interest-earned ratio
EBITDA coverage ratio
Profitability Ratios
Profit Margin
Basic Earning Power
Return on Assets
Return on Equity
Market Value Ratios
Earnings per share
Price-to-earnings ratio
Cash flow per share
Price-to-cash flow ratio
Book Value per share
Market-to-book ratio

2010

2009 Industry Avg


2.58
1.53
7.69
47.45
2.04
1.23
32.1%
15.33
4.18
8.86%
19.48%
10.93%
16.10%
NA
10.65
NA
7.11
NA
1.72

a. Has Joshua & White's liquidity position improved or worsened? Explain.

b. Has Joshua & White's ability to manage its assets improved or worsened? Explain.

c. How has Joshua & White's profitability changed during the last year?

d. Perform an extended Du Pont analysis for Joshua & White for 2008 and 2009.
ROE =
PM x TA Turnover x Equity Multiplier
2010
2009

e. Perform a common size analysis. What has happened to the composition

You might also like