USA: +1(669)289-8683 
Sign in
busn460_financial_analysis_project_week_q.xlsx
Individual Financial Analysis Report
Start on the Individual Financial Analysis Report, due Week 3. Note that this is not a team assignment. Be sure to include proper citations for all references you use. Go to the
CanGo Intranet
and pull the financial statements. (Listed Below) Use these to fill out the table found in Doc Sharing labeled Financial Analysis Project. (Will attach as well)
Assumptions:
- At the beginning of 2009, CanGo purchased the online gaming company. This purchase was for cash, paid for through the proceeds of the IPO and results in goodwill.
- 90% of the online book sales comes from JIT, the other 10% through the inventory which CanGo possesses. 100% of the CD/DVD/MP3 come through CanGo inventory. The result is that 80% of ALL sales is JIT and 20% is inventory.
- There is one warehouse for shipping of books and one plant for manufacturing.
- There are three divisions: a CD/DVD/MP3 division, an online gaming division and a books division. All manufacturing takes place in the CD/DVD/MP3 division.
- The IPO took place at the beginning of 2009.
- The CD/DVDs were customized beginning in 2008. The MP3 players were built beginning in the start of 2009.
- The online gaming company was purchased for $30,000,000 and both Elizabeth and Andrew initiated the process.
- The company began in 2006, has a VC infusion in 2007 and 2008. It showed a profit in 2008 and 2009. Its only profitable division is the online book sales division.
- It has some type of international operations, hence the need for a “translation gain or loss” in owner’s equity.
- It has an extraordinary loss from fire and a sale of a segment of its business in 2009.
Balance Sheet
|
ASSETS |
December 31, 2009 |
|
|
Cash |
$20,900,000 |
|
|
Marketable Securities |
$117,000,000 |
|
|
Accounts Receivable |
$33,000,000 |
|
|
Less: Allowance for Bad Debts |
$(880,000) |
|
|
Net Accounts Receivable |
$32,120,000 |
|
|
Inventory |
||
|
Raw Materials |
$2,000,000 |
|
|
Work-in-process |
$1,000,000 |
|
|
Finished Goods |
$5,000,000 |
|
|
Inventory Purchased for Resale |
$24,000,000 |
|
|
Total Inventory |
$32,000,000 |
|
|
Plant, Property and Equipment |
$6,700,000 |
|
| Less: Accumulated |
Depreciation |
$(320,000) |
|
Net Plant, Property and Equipment |
$6,380,000 |
|
|
Prepaid Expenses |
$200,000 |
|
|
Goodwill and Other Purchased Intangibles |
$28,000,000 |
|
|
Less: Amortization |
$(700,000) |
|
|
Net Goodwill and Other Purchased Intangibles |
$27,300,000 |
|
|
Total Assets |
$235,900,000 |
|
|
LIABILITIES AND OWNERS’ EQUITY |
||
|
Accounts Payable |
$22,000,000 |
|
|
Accrued Advertising |
$11,800,000 |
|
|
Other Liabilities and Accrued Expense |
$1,400,000 |
|
|
Current Portion of Long-Term Debt |
$2,300,000 |
|
|
Long Term Debt |
$57,400,000 |
|
|
Preferred Stock, $100 par value per share, |
||
|
100,000 authorized, 0 shares issued and outstanding |
||
|
Common Stock, $1 par value per share, |
||
|
250,000,000 shares authorized, 13,000,000 shares |
||
|
issued, 12,900,000 outstanding |
$13,000,000 |
|
|
Additional Paid-in-Capital in excess of par value, Common Stock |
||
|
Treasury Stock |
$(1,000,000) |
|
|
Retained Earnings (less Cash Dividends Paid) |
$12,000,000 |
$11,000,000 |
|
Total Liabilities and Owner’s Equity |
Income Statement
|
December 31, 2008 |
|||
|
Sales Revenues |
$51,000,000 |
$10,300,000 |
|
|
Less: Sales Returns |
$(300,000) |
||
|
Net Sales Revenues |
$50,000,000 |
$10,000,000 |
|
|
Less: Cost of Goods Sold |
$(9,000,000) |
$(4,000,000) |
|
|
Gross Profit |
$41,000,000 |
$6,000,000 |
|
|
Operating Expenses: |
|||
|
Advertising and Sales |
$(26,000,000) |
$(3,000,000) |
|
|
$(160,000) |
|||
|
Salaries and Wages |
$(1,700,000) |
$(1,400,000) |
|
|
Product Development |
$(1,200,000) |
||
|
Merger and Acquisition Related Costs, including |
|||
|
Amortization of Goodwill and Other Intangibles |
|||
|
Total Operating Expenses |
$(32,560,000) |
||
|
Income from Continuing Operations |
$8,440,000 |
||
|
Less: Income Taxes at 35% |
$(2,954,000) |
||
|
$5,486,000 |
|||
|
Discontinued Operations: |
|||
|
Income from Operations of Discontinued Division |
|||
|
(less applicable income taxes) |
$350,000 |
||
|
Loss on Disposal of Discontinued Division |
|||
|
$(150,000) |
|||
|
Total Gain from Discontinued Operations |
|||
|
Extraordinary Items: |
|||
|
Loss from fire (less applicable income taxes) |
$(200,000) |
||
|
Net Income |
|||
|
Divisional Revenues |
|||
|
Books |
$15,000,000 |
$7,000,000 |
|
|
Online gaming |
$25,000,000 |
||
|
Customized MP3/CD/DVD |
$3,000,000 |
||
|
Customized MP3/CD/DVD Inventory at end of 2009 |
$8,000,000 |
Sheet1
| BUSN460 Individual Financial Analysis Project | ||||||||||||||||||||||||||||||||||||
| Student Name: | ||||||||||||||||||||||||||||||||||||
| Instructions: | ||||||||||||||||||||||||||||||||||||
| Go to the CanGo intranet found in the Report Guide tab under Course Home | ||||||||||||||||||||||||||||||||||||
| Use the financial statements from the most recent year to fill in the table below. | ||||||||||||||||||||||||||||||||||||
| You may find some formulae calling for an average, e.g., average inventory, average receivables. | ||||||||||||||||||||||||||||||||||||
| Because we only have the Balance sheet for one year, you can only use the one year number not an average. | ||||||||||||||||||||||||||||||||||||
| Assume interest expense is $ | 0.0 | |||||||||||||||||||||||||||||||||||
| Be careful of the Debt equity ratio. The review covers debt asset ratio as an example of how to calculate ratios and that is different from debt equity ratio, | ||||||||||||||||||||||||||||||||||||
| and that is different from the debt equity ratio so think about how you calculate the debt equity ratio using the debt asset ratio as an example. | ||||||||||||||||||||||||||||||||||||
| Be sure to cite your references | ||||||||||||||||||||||||||||||||||||
| Green boxes to be filled in by instructor | ||||||||||||||||||||||||||||||||||||
| Ratio | Formula (express the ratio in words) | Detailed calculation (actual numbers from financial statements used for the calculation) | Final number (final result of the detailed calculation) | Explanation of why ratio is important | Earned points (up to | 3 | Instructor feedback | |||||||||||||||||||||||||||||
| Example: | Term A/Term B (Term A divided by Term B) | 1000/2000 | .50 | This is the explanation of the role of this ratio and why it is important | ||||||||||||||||||||||||||||||||
| Efficiency Ratio: Receivables Turnover | ||||||||||||||||||||||||||||||||||||
| Grade for above | ||||||||||||||||||||||||||||||||||||
| Efficiency Ratio: Inventory Turnover | ||||||||||||||||||||||||||||||||||||
| Financial Leverage Ratio: Debt/Equity Ratio | ||||||||||||||||||||||||||||||||||||
| Liquidity Ratio: Current Ratio | ||||||||||||||||||||||||||||||||||||
| Liquidity Ratio: Quick Ratio | ||||||||||||||||||||||||||||||||||||
| Liquidity: Working Capital | ||||||||||||||||||||||||||||||||||||
| Profitability Ratio: Return on Assets | ||||||||||||||||||||||||||||||||||||
| Profitability Ratio: Return on Sales | ||||||||||||||||||||||||||||||||||||
| Total Earned Points |
