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Financial Management - Essay Example

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2,000 liabilities and stockholders’ equity liabilities: overdraft $ 1392 Interest payable $ 4032 loan payable $ 24,000 Campbell loan payable $ 8,068 retained earnings $ 6,608 Common Stock $ 60,000 Total $ 100,068 Vertical Analysis PROFIT AND LOSS STATEMENT Company A Company B NET SALES 100% 100% COST OF GOODS SOLD 95.2% 78% GROSS PROFIT 4.8% 22% SELLING, GENERAL AND ADMINISTRATION EXPENSE 2.6% - OPERATING INCOME BEFORE IMPAIRMENT RECOVERY 2.2% - IMPAIRMENT RECOVERY 0 - Intangible asset repairment charges - 0.8% OPERATING INCOME 2.2% 3% OTHER INCOME/(EXPENSE) 0.1% CHANGE IN VALUE OF DERIVATIVE LIABILITY 0.2% - INTEREST EXPENSE 0.8% - INCOME BEFORE INCOME TAXES 1.6% 3.1% Income taxes 0.6% 0.9% Net income 1% 2.3% BALANCE SHEET COMPANY A COMPANY B Current Assets: Cash 1.6% 27.1% Trade accounts receivables 20.94% 17.3% Inventories 68.25% 22.9% Prepaid expenses 2.8% Deferred tax assets 1.25% - Other current assets 4.09% - Property plant and equipment 1.49% 14.5% Intangible assets - 0.8% Cash surrender value of life insurance - 10.9% Advance to suppliers, net of imputed interest 1.66% - Preferential supply agreement 0.19% - Long term financing costs, net of amortization 0.50% - Other assets - 3.7% Total assets 100% 100% Liabilities and stockholders equity: Current liabilities: Accrued salaries, wages and benefits - 2.6% Notes payable-banks 57.25% - Current maturities of mortgage payable 0.05% - Trade accounts payable 18.55% 6.2% Income tax payable 1.51% - Accrued expenses and derivative liabilities 1.51% - Dividends payable 0.008% 0.7% other accrued expenses - 0.5% Total current liabilities 78.9% 10% Deferred compensation - 4.8% Mortgage payable, net of current maturities 0.54% - Subordinated convertible debt net of unamortized discount of $2499 3.52% - Derivative liability for embedded conversion option 0.71% - Deferred taxes payable 0.07% - Stock holders equity: Common stock 0.4% 11.6% Additional paid in capital 4.42% - Retained earnings 13.0% 73.6% Accumulated other comprehensive loss (0.7%) 0.07% Treasury stock (1.30%) - Total liabilities and shareholder’s equity 100% 100% Cash flow statements Company A 2011 Cash flow from operating activities Net income 116.07% Adjustments to reconcile net income to net cash in operating activities Depreciation and amortization 10.15% Change in value of derivative liability -20.96% Amortization of convertible note discount 7.72% Impairment recovery 0.00% Provision for doubtful debts 4.84% Deferred income taxes -13.20% Foreign exchange loss, and others -0.26% Changes in: Restricted cash 0.00% Trade account receivable -364.62% Inventories -1225.27% Other current ass ...Show more


Table of Contents Garden Place Case-Question 2 3 Vertical Analysis 7 PROFIT AND LOSS STATEMENT 7 Company A 7 Company B 7 BALANCE SHEET 8 Cash flow statements 9 Company A 9 Company B 10 ANALYSIS: 12 Horizontal Analysis 12 Company B 12 Summary: 14 Garden Place Case-Question 2 CASH April 1, common stock 60,000 April 1, truck 12,000 April 1, loan 32,000 April 1, display equipment 6,000 April 1, loan from Campbell bank 10,000 April 1, Rotiller 400 April 1-march 31, cash sales 340,000 April 1, cash register 3,600 April 1, inventories 60,000 Inventories 200,000 Utilities 4800 Payroll 112000 Rent 7200 Telephone 1200 Interest payments 8192 Advertising expense 20,000 Balance 1392 Loan payment 8000 Loan…
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Financial Management essay example
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