I am trying to analyse financial statements using published financial reports, the ones I know I will be facing in the real world compared to the exam type. I found one very challenging and too big. I have attached areas I want analysed, and I am asking for a detailed ratio analysis showing the relevant calculations and notes. I have eye sight problems typed solutions makes it easy. I am not sure about the credits.
When I first studied ratio analysis I use to calculate a lot of ratios and find something interesting to say about them and that did not really work. The financial statements were easy and straightforward and there were no complications in calculating any ratio but I don't think I knew the most important things to say about them.
As a result I am challenging myself by looking for the most difficult financial statements for big companies and analyse them in terms of the following and compare with similar companies in the same industry.
From a managers point of view I want to analyse the following company using there published accounts for 2011 and 2012.Inculding all relevant notes for better understanding. Information on www.Daimler.com.
(a) Evaluate the performance of DAIMLER in the following areas, using ratio analysis:
- Working capital efficiency
- Long term financial structure
The problem set deals with issues under accounting: Ratio analysis.
11.12 Whittaker, Inc: Income statement and ratio analysis
See attached case study for Whittaker, IncProblem Description:
Presented below are partially completed financial statements for Whittaker, Inc.:
For the Year Ended December 31, 2011
Sales $ ?
Cost of goods sold ?
Gross profit $ ?
Operating expenses ?
Income from operations $ ?
Interest expense ?
Income before taxes $ ?
Income taxes (20%) ?
Net income $ ?
December 31, 2011
Cash $ ?
Accounts receivable ?
Merchandise inventory ?
Total current assets $171,000
Property, plant and equipment, net ?
Total assets $ ?
Current liabilities $ ?
Bonds payable, 15% 70,000
Total liabilities $ ?
Common stock, $2 par value 10,000
Additional paid-in-capital 15,000
Retained earnings ?
Total owners' equity ?
Total liabilities and owners' equity $ ?
Financial ratios computed from these financial statements include the following:
Current ratio 1.9 to 1
Acid-test ratio 1.3 to 1
Debt/equity ratio 2.0 to 1
Inventory turnover 4.0 times
Accounts receivable turnover 6.8 times
Times interest earned 4.45 times
Gross profit ratio 40%
Return on investment 12%
Earnings per share $5.52
All sales during the year were made on account. Cash collections during the year exceeded sales
by $14,000, and no uncollectible accounts were written off.
The balance of the accounts receivable account was $57,000 on January 1, 2011.
No common stock was issued during the year.
Dividends declared and paid during the year were $7,600.
The balance of the inventory account was $48,000 on January 1, 2011.
Interest expense on the income statement relates to the 15% bonds payable; $10,000 of these bonds
were issued on May 1, 2011; the remaining amount of bonds payable were outstanding throughout
the year. All bonds were issued at face value.
Please proceed to the "Analysis" worksheet and complete the basic problem requirements. Complete the problem
requirements by entering appropriate amounts or formulas in shaded worksheet cells:
a. Complete the income statement and balance sheet for Whittaker, Inc. Show how each amount was determined.
b. After completing part a, use your answers to recompute each of the financial ratios provided as additional
After completing the "Analysis" worksheet, please proceed to the "What the Numbers Mean" worksheet and respond
to the additional requirements presented.