a. Executive summary of the company and its industry.
b. Detailed evaluation of:
(1) Short-term liquidity (current debt-paying ability).
(2) Cash forecasting and pro forma analysis.
(3) Capital structure and solvency.
(4) Return on invested capital.
(5) Asset turnover (utilization).
(6) Profitability and equity analysis. Note: You are expected to use a variety of financial analysis tools in answering (b). Your analysis should yield inferences for each of these six areas.
c. Comment on the usefulness of the financial statements of this company for your analysis.
d. How did accounting principles used in the financial statements affect your analytical measures?
e. Prepare a forecast of the income statement, balance sheet, and statement of cash flows for a (1)-year horizon based off 2016 financials.
f. Estimate the value of your company’s common stock per share using the valuation analysis and procedures described in the Comprehensive Case
INCOME STATEMENT Period Ending: Trend 12/31/2016 12/31/2015 12/31/2014 12/31/2013 Total Revenue $4,825,335 $3,963,313 $3,084,370 $2,332,051 Cost of Revenue $2,584,724 $2,057,766 $1,572,164 $1,195,381 Gross Profit $2,240,611 $1,905,547 $1,512,206 $1,136,670 Operating Expenses Research and Development $0 $0 $0 $0 Sales, General and Admin. $1,823,140 $1,497,000 $1,158,251 $871,572 Non-Recurring Items $0 $0 $0 $0 Other Operating Items $0 $0 $0 $0 Operating Income $417,471 $408,547 $353,955 $265,098 Add'l income/expense items ($2,755) ($7,234) ($6,410) ($1,172) Earnings Before Interest and Tax $414,716 $401,313 $347,545 $263,926 Interest Expense $26,434 $14,628 $5,335 $2,933 Earnings Before Tax $388,282 $386,685 $342,210 $260,993 Income Tax $131,303 $154,112 $134,168 $98,663 Minority Interest $0 $0 $0 $0 Equity Earnings/Loss Unconsolidated Subsidiary $0 $0 $0 $0 Net Income-Cont. Operations $256,979 $232,573 $208,042 $162,330 Net Income $256,979 $232,573 $208,042 $162,330 Net Income Applicable to Common Shareholders $197,979 $232,573 $208,042 $162,330 BALANCE SHEET Annual Income Statement (values in 000's)Get Quarterly Data Period Ending: Trend 12/31/2016 12/31/2015 12/31/2014 12/31/2013 Current Assets Cash and Cash Equivalents $250,470 $129,852 $593,175 $347,489 Short-Term Investments $0 $0 $0 $0 Net Receivables $622,685 $433,638 $332,333 $248,329 Inventory $917,491 $783,031 $536,714 $469,006 Other Current Assets $174,507 $152,242 $87,177 $63,987 Total Current Assets $1,965,153 $1,498,763 $1,549,399 $1,128,811 Long-Term Assets Long-Term Investments $0 $0 $0 $0 Fixed Assets $804,211 $538,531 $305,564 $223,952 Goodwill $563,591 $585,181 $123,256 $122,244 Intangible Assets $64,310 $75,686 $26,230 $24,097 Other Assets $110,204 $75,652 $57,064 $47,543 Deferred Asset Charges $136,862 $92,157 $33,570 $31,094 Total Assets $3,644,331 $2,865,970 $2,095,083 $1,577,741 Current Liabilities Accounts Payable $618,429 $393,395 $358,113 $299,185 Short-Term Debt / Current Portion of Long-Term Debt $27,000 $42,000 $28,951 $104,972 Other Current Liabilities $40,387 $43,415 $34,563 $22,473 Total Current Liabilities $685,816 $478,810 $421,627 $426,630 Long-Term Debt $790,388 $624,070 $255,250 $47,951 Other Liabilities $137,227 $94,868 $67,906 $49,806 Deferred Liability Charges $0 $0 $0 $0 Misc. Stocks $0 $0 $0 $0 Minority Interest $0 $0 $0 $0 Total Liabilities $1,613,431 $1,197,748 $744,783 $524,387 Stock Holders Equity Common Stocks $145 $144 $71 $70 Capital Surplus $823,484 $636,558 $508,350 $397,248 Retained Earnings $1,259,414 $1,076,533 $856,687 $653,842 Treasury Stock $0 $0 $0 $0 Other Equity ($52,143) ($45,013) ($14,808) $2,194 Total Equity $2,030,900 $1,668,222 $1,350,300 $1,053,354 Total Liabilities & Equity $3,644,331 $2,865,970 $2,095,083 $1,577,741 See also: Company Financials data entry page CASH FLOW STATEMENT Annual Income Statement (values in 000's)Get Quarterly Data Period Ending: Trend 12/31/2016 12/31/2015 12/31/2014 12/31/2013 Net Income $256,979 $232,573 $208,042 $162,330 Cash Flows-Operating Activities Depreciation $144,770 $100,940 $72,093 $50,549 Net Income Adjustments $87,540 $130,249 $76,578 $40,534 Changes in Operating Activities Accounts Receivable ($249,853) ($191,876) ($101,057) ($35,960) Changes in Inventories ($148,055) ($278,524) ($84,658) ($156,900) Other Operating Activities ($25,284) ($76,476) ($33,345) ($19,049) Liabilities $238,390 $39,010 $81,380 $78,566 Net Cash Flow-Operating $304,487 ($44,104) $219,033 $120,070 Cash Flows-Investing Activities Capital Expenditures ($386,746) ($298,928) ($140,528) ($87,830) Investments $6,482 ($6,534) $0 ($1,700) Other Investing Activities ($875) ($542,013) ($11,784) ($148,572) Net Cash Flows-Investing ($381,139) ($847,475) ($152,312) ($238,102) Cash Flows-Financing Activities Sale and Purchase of Stock $15,485 $10,310 $15,776 $15,103 Net Borrowings $156,851 $384,798 $131,278 $94,529 Other Financing Activities ($1,505) $0 $0 $0 Net Cash Flows-Financing $205,995 $440,078 $182,306 $126,795 Effect of Exchange Rate ($8,725) ($11,822) ($3,341) ($3,115) Net Cash Flow $120,618 ($463,323) $245,686 $5,648 Based on these financial statements, the company’s background, industry statistics, and other market and company information, prepare a financial statement analysis report covering the following points: a. Executive summary of the company and its industry. b. Detailed evaluation of: (1) Short-term liquidity (current debt-paying ability). (2) Cash forecasting and pro forma analysis. (3) Capital structure and solvency. (4) Return on invested capital. (5) Asset turnover (utilization). (6) Profitability and equity analysis. Note: You are expected to use a variety of financial analysis tools in answering (b). Your