July 2020
Beginner
208 pages
3h 7m
English
Content preview from Financial Statement Analysis
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Chapter 6Case Studies
Learning objective
- Recall measures that are useful in the analysis of financial statements and data.
The following four case studies provide examples of financial information upon which liquidity, leverage, profitability, and casual calculations may be performed. The first two case studies also contain example ratio summary and analysis. Considering this information, what problem areas regarding each company’s financial health exist?
Two discussion cases are also provided, followed by questions related to the financial condition of the subject company.
Case study 1: Paper products company
| Paper products company | |||||
| 20X0 | 20X1 | 20X2 | 20X3 | ||
| Cash | $550,000 | $450,000 | $150,000 | $ 50,000 | |
| Receivables | 800,000 | 750,000 | 750,000 | 700,000 | |
| Inventory | 900,000 | 850,000 | 850,000 | 800,000 | |
| All other | 250,000 | 250,000 | 250,000 | 250,000 | |
| Total current | 2,500,000 | 2,300,000 | 2,000,000 | 1,800,000 | |
| Fixed | 1,500,000 | 1,450,000 | 1,400,000 | 1,300,000 | |
| All other | 500,000 | 500,000 | 400,000 | 300,000 | |
| Total assets | $4,500,000 | $4,250,000 | $3,800,000 | $3,400,000 | |
| Due banks | $400,000 | $400,000 | $400,000 | $400,000 | |
| Due trade | 400,000 | 500,000 | 700,000 | 1,050,000 | |
| Taxes | 100,000 | -0- | -0- | -0- | |
| All other | -0- | -0- | -0- | -0- | |
| Total current | 900,000 | 900,000 | 1,100,000 | 1,450,000 | |
| Long-term liabilities | 600,000 | 550,000 | 500,000 | 450,000 | |
| Total liabilities | 1,500,000 | 1,450,000 | 1,600,000 | 1,900,000 | |
| Net worth | 3,000,000 | 2,800,000 | 2,200,000 | 1,500,000 | |
| Total | $4,500,000 | $4,250,000 | $3,800,000 ... | ||
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