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Table IC4.

1 Balance Sheets
2017E 2016
Assets
Cash $ 85,632 $ 7,282
Accounts receivable 878,000 632,160
Inventories 1716480 1287360
Total current assets 2680112.00 1926802.00
Gross fixed assets 1197160.00 1202950.00
Less: accumulated depreciation 380,120 263,160
Net fixed assets $ 817,040 $ 939,790
Total assets 3497152 2866592

Liabilities and equity


Accounts payable $ 436,800 $ 524,160
Notes payable 300,000 636,808
Accruals 408,000 489,600
Total current liabilities 1144800 1650568
Long-term bonds 400,000 723,432
Total debt 1544800 2374000
Common stock (100,000 shares) 1,721,176 460,000
Retained earnings 231,176 32,592
Total common equity 1952352 $ 492,592
Total liabilities and equity 3497152 2866592

Table IC4.2 Income Statements 2017E 2016

Sales 7035600 6034000


Cost of goods sold 5,875,992 5,528,000
Other expenses 550,000 519,988
Total operating exp. excl. depreciation and amortizatio 6425992 6047988
EBITDA $ 609,608 $ (13,988)
Depreciation and amortization 116,960 116,960
Earnings before interest and taxes (EBIT) $ 492,648 $ (130,948)
Interest expense 70,008 136,012
Earnings before taxes (EBT) $ 422,640 $ (266,960)
Taxes (40%) - -
Net Income $ 422,640 $ (266,960)

Earnings per share (EPS) $ 1.014 $ (1.602)


Dividends per share (DPS) $ 0.220 $ 0.110
Book value per share (BVPS) $ 7.809 $ 4.926
Stock price $ 12.17 $ 2.25
Shares outstanding 250,000 100,000
Tax rate 40.00% 40.00%
Lease payments $ 40,000 $ 40,000
Sinking fund payments 0 0

TABLE IC4.3 Ratio Analysis


2017E 2016 2015
Current 2.34 1.17 2.33
Quick 0.84 0.39 0.85
Inventory turnover 3.42 4.29 4.00
Days sales outstanding (DSO) 45.55 38.24 37.35
Fixed assets turnover $ 8.61 $ 6.42 $ 9.95
Total assets turnover 2.01 2.10 2.34
Debt-to-assets ratio 44% 83% 55%
Times interest earned (TIE) 7.04 -0.96 4.34
Operating margin 7% -2% 6%
Profit margin 6% -4% 4%
Basic earning power (BEP) 14% -5% 13%
Return on assets (ROA) 12% -9% 10%
Return on equity (ROE) 22% -54% 22%
Price/earnings (P/E)
Market/book (M/B)
Book value per share (BVPS)

Calculateratios based on the projected balance sheet and income statement data.
2015

$ 57,600
351,200
715,200
1124000.00
491000.00
146,200
$ 344,800
1468800

$ 145,600
200,000
136,000
$ 481,600
323,432
$ 805,032
460,000
203,768
$ 663,768
1468800

2015

3432000
2,864,000
358,672
3222672
$ 209,328
18,900
$ 190,428
43,828
$ 146,600
-
$ 146,600

$ 0.880
$ 0.220
$ 6.638
$ 8.50
100,000
40.00%
$ 40,000
0

Industry
Average
2.7
1.0
6.1
32.0
7.0
2.6
50.0%
6.2
7.3%
3.5%
19.1%
9.1%
18.2%
14.2
2.4
n.a.
COMMON SIZE BALANCE SHEETS - Allied Food Products - December 31
(in millions of dollars)
Year-end stock price
2016 2015 Shares outstanding (in millio
Assets Tax rate
Cash and equivalents $ 10 $ 80
Accounts receivable 375 315
Inventories 615 415
Total current assets $ 1,000 $ 810
Net plant and equipment 1,000 870
Other assets - -
Total assets $ 2,000 $ 1,680

Liabilities and equity


Accounts payable $ 60 $ 30
Notes payable 110 60
Accruals 140 130
Total current liabilities $ 310 $ 220
Long-term bonds 750 580
Total debt $ 1,060 $ 800
Common stock (50M shares) 130 130
Retained earnings 888 750
Total common equity $ 1,018 $ 880
Total liabilities and equity $ 2,078 $ 1,680

INCOME STATEMENTS - Allied Food Products - Years Ending December 31


(in millions of dollars)

2016 2015
Net sales $3,000.0 $2,850.0
Oper costs except depr'n & am 2,616.2 2,497.0
Depreciation and amortization 100.0 90.0
Operating income (EBIT) $ 283.8 $ 263.0
Less interest 88.0 60.0
Earnings before taxes (EBT) $ 195.8 $ 203.0
Taxes
Net income $ 195.8 $ 203.0

Common dividends $ 57.5 $ 53.0


Addition to retained earnings $ 138.3 $ 150.0

PER-SHARE DATA
2016 2015
Earnings per share (EPS)
Dividends per share (DPS)
Book value per share (BVPS)

RATIO ANALYSIS
calculate Allied's ratios for 2011 and 2012. These results are compared across time and
to the industry averages.

Liquidity ratios 2011 2012 Ind Avg


Current Ratio 4.20
Quick Ratio 2.20
Asset Management ratios
Inventory Turnover 10.90
Days Sales Outstanding 36.00
Fixed Assets Turnover 2.80
Total Assets Turnover 1.80
Debt Management ratios
Debt Ratio 40.00%
Times Interest Earned 6.00
Profitability ratios
Operating Margin 10.00%
Profit Margin 5.00%
Return on Assets 9.00%
Basic Earning Power 18.00%
Return on Equity 15.00%
Market Value ratios
Price-to-Earnings Ratio 11.30
Market-to-Book Ratio 1.70
2016 2015
Year-end stock price $23.06 $26.00
Shares outstanding (in million 50 50
40% 40%
Corrigan Corporation's December 31 Balance Sheets

Assets 2016 2015


Cash $ 72,000 $ 65,000
Accounts receivable 439,000 328,000
Inventories 894,000 813,000
Total current assets 1405000 1206000
Land and building 238,000 271,000
Machinery 132,000 133,000
Other fixed assets 61,000 57,000
Total assets 1836000 1667000

Liabilities and equity


Accounts and notes payable 432000 409500
Accrued liabilities 170,000 162,000
Total current liabilities 602000 571500
Long-term debt 404,290 258,898
Common stock 575,000 575,000
Retained earnings 254,710 261,602
Total liabilities and equity 1836000 1667000

Corrigan Corporation's December 31 Income Statements


2016 2015
Sales 4240000 3635000
Cost of goods sold 3680000 2980000
Gross operating profit 560000 655000
General admin. and selling expen 236,320 213,550
Depreciation 159,000 154,500
Miscellaneous 134,000 127,000
EBT $ 30,680 159950
Taxes (40%) 12,272 63,980
Net income $ 18,408 $ 95,970

Per-Share Data 2016 2015


EPS $0.80 $4.17
Cash dividends $1.10 $0.95
Market price (average) $12.34 $23.57
P/E ratio
Number of shares outstanding 23,000 23,000

calculate the necessary ratios for this analysis.


Ratio Analysis 2016 2015 Industry Avga
Liquidity
Current ratio 2.7
Asset Management
Inventory turnoverb 7.0
Days sales outstanding c
32
Fixed assets turnoverb 13.0
Total assets turnoverb 2.6
Profitability
Return on assets 9.1%
Return on equity 18.2%
Profit margin 3.5%
Debt Management
Debt-to-assets ratio 50.0%
Market Value
P/E ratio 6.0