FINANCIAL STATEMENT ANALYSIS

Current Ratio

2015 2016
1,180/275 = 4.29 1,140/200 = 5.7

Acid Test Ratio

2015 2016
305 + 275 / 275 270 + 290 / 200
= 2.11 = 2.8

Inventory Turnover

2016
760 / 590 = 1.29

Average Collection Period

2016
1330 /282.5 = 4.71 Receivables Turnover
360 days / 4.71 = 76.43 days

Debt Ratio

2015 2016
775 / 2380 = 0.33 700 / 2480 = 0.28

Time Interest Earned

2015 2016
256 + 64 / 64 = 5 283 + 57 / 57 = 5.96

Total Asset Turnover

2015 2016
1100/2830 = 0.39 1330/2480 = 0.28
Fixed Asset Turnover

2016
1330/1270 = 1.05

Operating Profit Margin

2015 2016
320 / 1100 = 0.29 340/1330 = 0.26

Net Profit Margin

2015 2016
169 / 1100 = 0.15 187 / 1330 = 0.14

Return on Total Assets

2016
187 / 2430 = .08

Return on Equity

169 / 1693 = .10

GROSS PROFIT VARIANCE ANALYSIS
 4 WAY APPROACH
Sales Price Variance
200D Sales 164,000
200D Units @ 200C SP
Product A (2400 x 18) 43,200
Product B (7850 x 15) 117,750 160,950
SP Variance 3050 F

Quantity
200D units @ 200C SP 160, 950
200C Sales 156,000
SV Variance 4,950 F
SP Variance 8,000 F

Cost Variance
Price Factor
200D Cost of Sales 110,025
200D units @ 200C CP
A (2,400 x 18) 28,800
B (7,850 x 10) 78, 500 107,300
CP Variance 2725 U
Quantity Factor
200D units @ 200C CP 107,300
200C cost of Sales 104,000
CV Variance 3,300 U
CPV Variance 6,025 U
6 WAY APPROACH
Sales Price Factor
200C units @ 200D SP (2,000 x 16) 32,000
(8,000 x16) 128,000 160,000
200C units @ 200C SP (2,000 x 18) 36,000
(8,000 x 15) 120,000 156,000
SP Variance 4,000 F
Volume/Quantity Variance
200D @ 200C SP 160,950
200C @ 200C SP 156,000
Quantity
Variance 4,950 F
SPV Variance 950 U
 Cost Price Variance
(2,000 x
200C units @ 200D COS 11.50) 23,000
(8,000 x
10.50) 84,000 107,000
200C units @ 200C COS (2,000 x12) 24,000
(8,000 x 10) 80,000 104,000
CP Variance 3,000 F

Cost Volume Variance

200D units @ 200C CP 107,300
200C cost of Sales 104,000
CV Variance 3,300 U

Sales Cost Volume

Product A (400 x .50) 200
Product B (150 x .50) 75
275 F

Sales Factor
SP Variance 4,000 F
Vol./Qty Variance 4,950 F
SPV Variance 950 U

Cost Factor
CP Variance 3,000 U
CV Variance 3,300 U
SCV Variance 275 F
1975 F

Sales Mix Variance

200D @ 200C SP 160,950
Less: 200D @ 200C CP 107,300 53,650

Less: 200D units @ 200C AGP

9250 x (52,000/10,000) 48,100
5,550 F

Final Sales Volume Variance

 48,100
52,000 3,900 U
1,650 F

FINANCIAL PLANNING AND FORECASTING

Problem 1

2017 2018 Net Income 80,000

Dividends
Sales 1,600 2,000 Paid 90,000

Balance Sheet
2017 2018
ASSET
Current Assets 890,000 56.00% 1,120,000
Net Fixed Assets 1,000,000 63.00% 1,260,000
TOTAL 1,890,000 2,380,000

LIABLITIES AND OWNER´S EQUITY

Accounts Payable 160,000 10% 200,000
Accrued Expenses 100,000 6.00% 120,000
Notes Payable 700,000 700,000
Longterm Debt 300,000 300,000
Total Liabilities 1,260,000 1,320,000

Common Stock 360,000 360,000

Retained Earnings 270,000 260,000
Owner´s Equity 630,000 620,000
TOTAL 1,890,000 1,940,000

2,380,000
-1,940,000
Additional Financing Needed 440,000
 Problem 2

200,00
A. 0 240,000 280,000 400,000 320,000
Jan Feb Mar Apr May

25% @ Time of Sale 50,000 60,000 70,000 100,000 80,000

Collections of AR
After 1st month 50% 100,000 120,000 140,000 200,000
After 2 months 25% 50,000 60,000 70,000
TOTAL CASH RECEIPTS 50,000 160,000 240,000 300,000 350,000

75% 200,000 240,000 280,000 400,000 3

B.
Dec Jan Feb Mar Apr
150,00
COGS Purchases (75% of sales) 0 180,000 210,000 300,000 240,000
Payments 150,000 180,000 210,000 300,000
Other Cash Exp. 60,000 60,000 60,000 60,000
TOTAL CASH DISBURSEMENTS 210,000 240,000 270,000 360,000

C.
Jan Feb Mar Apr
280,00
Beg. Balance 0 120,000 40,000 25,000
Total Collections 50,000 160,000 240,000 300,000
210,00
Less:Total Disbursements 0 240,000 270,000 360,000
120,00
Unadjusted Balance 0 40,000 10,000 -35,000
Current Borrowing 0 0 15,000 60,000
120,00
Ending Balance 0 40,000 25,000 25,000

D. E.

March short term borrowing 15,000 Sales 280,000

April Short term borrowing 60,000 Less: COGS (75%) 210,000
Cumulative Short term 75,000 Gross Profit 70,000
Less: Other 60,000
 Expenses
EBIT 10,000

Problem 3

Sales 261,900
Less: COGS 145,800
GP 116,100
OpEX
Salaries 22,275
Dep. Exp 8,775
Other Exp. 4,050 35,100
NOI 81,000
Interes Exp. -15,000
EBIT 66,000
Tax -17415
Net Income 48,585