Financial Statement Analysis
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Question1.
a. What is the company's average annual rate of sales growth from 2007 through 2009?
b. How long, on average, was Better Mouse Trap taking to collect on its receivable accounts in 2009? (Assume all of the company's sales were on credit.)
c. Was Better Mouse Trap more or less profitable in 2009 than it was in 2007? Justify your answer using at least two ratios.
d. Was Better Mouse Trap more or less liquid at the end of 2009 than it was at the end of
2007? Justify your answer using at least two ratios.
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Solution Summary
The solution explains the calculation of sales growth rate, average collection period and comment on profitability and liquidity of the company
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Better Mouse Trap , INC, Income Statements( in 000's,except eps)
2007 2008 2009
Net sales $495,990 $570,389 $541,869
Cost of good 310,507 357,083 334,235
Gross profit 185,483 213,306 207,634
Selling & admin expenses 99,233 103.202 107,330
Operating income 86,250 110,104 100,304
Other income ( expenses) 9,191 9,559 9,941
Interest expenses 726 755 785
Income before taxes 76,333 99,790 89,578
Income tax 28,243 36,922 33,144
Net income 48,090 62,868 56,434
Avg number of common shares 57,405 56,585 55,157
EPS 0.84 1.11 1.02
Better Mouse Trap, INC Balance Sheets
2007 2008 2009
Assets
Cash & Equivalents 79,260 98,913 86,871
Accounts recievables 41,211 36,860 34,196
Inventories 63,957 57,402 55,584
Other current Assets 6,489 6,551 11,328
Total current ...
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