CHAPTER 5 The Analysis of Financial Management

192      CHAPTER 5 The Analysis of Financial Management

5.4.      Friendly Frank's Mobile home is a retailer of new and uses mobile homes. Frank started his company seven year ago and have been very pleased with its rapid growth. There have been a few cash flow problems associated with the growth. The problem got so bad during 19X7 that Frank put $20,300 of additional capital into the company. Frank realizes that some financial problems still exist. Having heard of your expertise in financial statement analysis, how would like you to provide a financial analysis of the firm.

           A.     Calculate figures for the common size balance sheet and income statement for 19X7.

           B.      Calculate the relevant financial ratio for 19X7.

           C.      Calculate cash flow from operating activities for 19X7.

           D.     Calculate the net trade cycle for 19X7.

           E.      Analyze the data and list the strengths and weakness of the company. Discuss any recommendations you would make the Frank to improve the company.

FRIENDLY FRANK'S MOBILE HOMES

BALANCE SHEET

	19X7	19X6	19X5
Assets
Cash	$        71,000	$     67,000	$     63,800
Account Receivable (net)	73,000	54,000	32,000
Inventory	927,000	678,000	475,700
Prepaid expense	25,000	24,000	15,000
current assets	$ 1,096,000	$   823,000	$   586,500
Gross Fixed assets	412,000	310,000	232,500
Accumulated depreciation	(49,000)	(27,000)	(15,000)
Net Fixed assets	363,000	283,000	217,500
Total assets	$    1,459,000	$ 1,106,000	$   804,000
Liabilities
Accounts payable	$       90,000	$      81,000	$      42,100
Note Payable	685,000	498,000	321,800
Current maturities of Long-term debt	30,000	25,000	15,000
Accrued Expense	121,000	82,000	54,300
Current Liabilities	$      926,000	$   686,000	$   433,200
Long-Term Debt	219,000	155,000	131,000
Total Liabilities	$   1,145,000	$    841,000	$   564,200
Equity	314,000	265,000	239,800
Total liabilities and Equity	1,459,000	1,106,000	804,000

FRIENDLY FRANK'S MOBILE HOMES

INCOME STATEMENTS

	19X7	19X6	19X5
Net sale	$   3,210,000	$ 2,515,000	$ 1,947,000
cost of goods sold	2,529,000	1,952,000	1,489,000
Gross Profit	681,000	563,000	458,000
Depreciation Expense	22,000	12,000	9,000
Lease Expense	12,000	10,800	9,600
Other operating expense	549,000	468,200	390,400
Operating Profit	$   98,000	$   72,000	$   49,000
Interest Expense	57,000	36,000	22,000
Earning before tax	41000	36000	27000
Income Tax (.3)	12,300	10,800	8,100
Net Income	$ 28,700	$   25,200	$    18,900

(សូមរង់ចាំចម្លើយវគ្គក្រោយ ខ្ញុំបាទនឹងស្រាយចម្លើយឱ្យបានក្បោះក្បាយ)