FINANCIAL MANAGEMENT

INDIVIDUAL ASSIGNMENT

Cantada, Carlo L.
Student Name: _______________________________________ Grade: ________

INSTRUCTIONS:
1. Create a 5-year Financial Statement Analysis for ABC Manufacturing Corporation in a
separate sheet of paper, showing year-on-year variances in both absolute terms and
percentages (horizontal analysis for all line items in the financial statements), as well as the
relevant Ratio Analysis for the same (compute for all ratios, not just those asked for).

2. Write your answers to the questions on the space provided, AND encircle your
corresponding answers on your spreadsheets.

3. For submission on September 16, 2019.

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ABC Manufacturing Corporation

Comparative Financial Statements

Year 1 Year 2 Year 3 Year 4 Year 5

Revenue 102,007 118,086 131,345 142,341 150,772

Cost of Goods Sold 39,023 48,004 49,123 52,654 56,710
Gross Profit 62,984 70,082 82,222 89,687 94,062

Salaries and Benefits 26,427 22,658 23,872 23,002 25,245

Rent and Overhead 10,963 10,125 10,087 11,020 11,412
Depreciation and Amortization 19,500 18,150 17,205 16,544 16,080
Interest 2,500 2,500 1,500 1,500 1,500
Total Expenses 59,390 53,433 52,664 52,066 54,237

Earnings Before Tax 3,594 16,649 29,558 37,621 39,825

Taxes 1,120 4,858 8,483 10,908 11,598
Net Earnings 2,474 11,791 21,075 26,713 28,227

Cash 167,971 181,210 183,715 211,069 239,550

Accounts Receivables 5,100 5,904 6,567 7,117 7,539
Inventory 7,805 9,601 9,825 10,531 11,342
Property and Equipment 45,500 42,350 40,145 38,602 37,521
Total Assets 226,376 239,065 240,252 267,319 295,952

Accounts Payable 3,902 4,800 4,912 5,265 5,671

Long Term Debt 50,000 50,000 30,000 30,000 30,000
Total Liabilities 53,902 54,800 34,912 35,265 35,671

Equity 170,000 170,000 170,000 170,000 170,000

Retained Earnings 2,472 14,265 35,340 62,053 90,280
Total Stockholders Equity 172,472 184,265 205,340 232,053 260,280

Total Liabilities and Equity 226,374 239,065 240,252 267,318 295,951

 Net Earnings 2,474 11,791 21,075 26,713 28,227
Plus: Depreciation and Amortization 19,500 18,150 17,205 16,544 16,080
Less: Changes in Working Capital 9,003 1,702 775 903 827
Cash from Operations 12,971 28,239 37,505 42,354 43,480

Acquisition of Property and Equipment 15,000 15,000 15,000 15,000 15,000

Issuance of Shares of Stock 170,000
Payment of Debt -20,000

Net Increse (Decrease) in Cash 167,971 13,239 2,505 27,354 28,480

Opening Cash Balance 0 167,971 181,210 183,715 211,069
Closing Cash Balance 167,971 181,210 183,715 211,069 239,549

II.

0.62
1. What was the company’s Gross Profit Margin for Year 5? __________

195,195
2. What was the company’s Working Capital Ratio for Year 3? __________

3. What was the average Sales Revenue growth rate of the company for the period under review?
10.31
__________

4. What was the average Cost of Goods Sold growth rate of the company for the same period?
__________

Yes
5. Was the company able to maintain control over its production costs? __________

0.506
6. What was the company’s 5-year average growth rate in terms of Total Assets? __________

7. What caused the reduction in the company’s Interest Expense in Year 2? __________

8. What was the company’s Net Income Margin for Year 1? __________

9. What year did the company conduct a manpower right-sizing initiative? __________

10. Where did the company use the funds generated from Sales Revenues? __________

0.12
11. What was the company’s Debt to Asset Ratio in Year 5? _________
0.14
12. What was the company’s Debt to Equity Ratio in Year 4? _________

No
13. Has the company issued any dividends to its shareholder’s for the past five years? ______

No
14. Will the company be able to sustain its bottom line profitability in the long term? __________
Yes
15. Will you invest in the shares of stocks of the company if offered to the public? __________

16. Identify what is the biggest problem that the company is currently facing (5 points):

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

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