Must Have Furnisher's current financial information (charts) can be found in Annex A of this report. All other charts and reports related to the projects to be examined and the company in question for the merger can also be found in Annex A.
This report begins by comparing the profit/loss statement for the year ending 30/09/03. What follows is a bar graph that compares 2002 profit/loss and 2003 profit/loss. You may find the results quite startling. With sales and gross profit being higher in 2003 one would expect the operating profit to higher, but its not:
The blue bars represent 2002's data and the reddish bars represent 2003's data. Sales were way up in 2003 as were cost of sales and gross profit. There is a considerable gap between 2002 and 2003 in sales and expenses. When you get down to the number that really counts, the operating profit, 2002 was a better year. 2003's data shows a 311% increase in sales, 466% more spent in cost of sales, etcBut, when you look at the final bars (operating profit) 2002 reported 674000 profit and 2003 reported 620000 profit. The company actually made less in 2003 (-54000) and spent considerably more in 2003. What hurt in 2003's numbers were the expenses such as bad debts, depreciation, selling expenses, and interest owed.
It appears that the new p...
The Simplified Balance Sheet (See Annex A) for Must Have Furnishers LTD tells more of the story. There are big number differences as seen in the prior graph only this time 2003 came out with the bigger numbers. Why Because the earlier chart gave a snapshot of one part of the business and the chart below gives a snapshot of the business as a whole and takes a look at such things as stock ownership to raise capital and expenditures for machines and equipment. The bars on the left represent 2002 data while the ones on the right represent 2003 data.
The ratio of assets is .358911:1 and the ration of liabilities is .0625:1.
The next graph shows the company's net worth (net assets minus long term liabilities):
Column 1 is the company's 2002 net worth and column 2 is the company's 2003 net worth. Why is the company worth more in 2003 In 2002 the company had 60 stock holders and that number increased to 476 in 2003. One way of raising money (capital) to fund projects or growth is to sell more stock. This could work well or backfire. Selling more stock could make the stock price fall. The stock owners before the new sale would lose because their stock lost value and their percentage of ownership in the company dropped as well. This company also took on more debtors (1000). That raised the current assets for 2003.
The net worth for the company increased from 1858 in 2002 to 2534 in 2003. That equates to roughly a 36% increase in net worth for the company. If the company could reduce its long term liabilities the profit margin would be greater. Also, the company needs to take a good look at the expenses 2002 vs. 2003. Lowering those expenses would raise the operating