Joshua & White Technologies: December 31 Balance Sheets

Joshua & White Technologies: December 31 Balance Sheets

(Thousands of Dollars)

Assets 2013 2012

Cash and cash equivalents $21,000 $20,000

Short-term investments 3,759 3,240

Accounts Receivable 52,500 48,000

Inventories 84,000 56,000

Total current assets $1,61,259 $1,27,240

Net fixed assets 2,18,400 2,00,000

Total assets $3,79,659 $3,27,240

Liabilities and equity

Accounts payable $33,600 $32,000

Accruals 12,600 12,000

Notes payable 19,929 6,480

Total current liabilities $66,129 $50,480

Long-term debt 67,662 58,320

Total liabilities $1,33,791 $1,08,800

Common stock 1,83,793 1,78,440

Retained Earnings 62,075 40,000

Total common equity $2,45,868 $2,18,440

Total liabilities and equity $3,79,659 $3,27,240

Joshua & White Technologies December 31 Income Statements

(Thousands of Dollars)

2013 2012

Sales $4,20,000 $4,00,000

COGS except excluding depr. and amort. 3,00,000 2,98,000

Depreciation and Amortization 19,660 18,000

Other operating expenses 27,600 22,000

EBIT $72,740 $62,000

Interest Expense 5,740 4,460

EBT $67,000 $57,540

Taxes (40%) 26,800 23,016

Net Income $40,200 $34,524

Common dividends $18,125 $17,262

Addition to retained earnings $22,075 $17,262

Other Data 2013 2012

Year-end Stock Price $90.00 $96.00

# of shares (Thousands) 4,052 4,000

Lease payment (Thousands of Dollars) $20,000 $20,000

Sinking fund payment (Thousands of Dollars) $5,000 $5,000

Ratio Analysis 2013 2012 Industry Avg

Liquidity Ratios

Current Ratio 2.58

Quick Ratio 1.53

Asset Management Ratios

Inventory Turnover (Total COGS/Inventories) 7.69

Days Sales Outstanding 47.45

Fixed Assets Turnover 2.04

Total Assets Turnover 1.23

Debt Management Ratios

Debt Ratio (Total debt-to-assets) 20.0%

Liabilities-to-assets ratio 32.1%

Times-interest-earned ratio 15.33

EBITDA coverage ratio 4.18

Profitability Ratios

Profit Margin 8.86%

Basic Earning Power 19.48%

Return on Assets 10.93%

Return on Equity 16.10%

Market Value Ratios

Earnings per share NA

Price-to-earnings ratio 10.65

Cash flow per share NA

Price-to-cash flow ratio 7.11

Book Value per share NA

Market-to-book ratio 1.72

a. Has Joshua & White's liquidity position improved or worsened? Explain.

b. Has Joshua & White's ability to manage its assets improved or worsened? Explain.

c. How has Joshua & White's profitability changed during the last year?

d. Perform an extended Du Pont analysis for Joshua & White for 2008 and 2009.

ROE = PM x TA Turnover x Equity Multiplier

2013

2012

e. Perform a common size analysis. What has happened to the composition

(that is, percentage in each category) of assets and liabilities?

Common Size Balance Sheets

Assets 2013 2012

Cash and cash equivalents

Short-term investments

Accounts Receivable

Inventories

Total current assets

Net fixed assets

Total assets

Liabilities and equity 2013 2012

Accounts payable

Accruals

Notes payable

Total current liabilities

Long-term debt

Total liabilities

Common stock

Retained Earnings

Total common equity

Total liabilities and equity

Common Size Income Statements 2013 2012

Sales

COGS except excluding depr. and amort.

Depreciation and Amortization

Other operating expenses

EBIT

Interest Expense

EBT

Taxes (40%)

Net Income

f. Perform a percent change analysis. What does this tell you about the change in profitability

and asset utilization?

Percent Change Balance Sheets Base

Assets 2013 2012

Cash and cash equivalents

Short-term investments

Accounts Receivable

Inventories

Total current assets

Net fixed assets

Total assets

Base

Liabilities and equity 2013 2012

Accounts payable

Accruals

Notes payable

Total current liabilities

Long-term debt

Total liabilities

Common stock

Retained Earnings

Total common equity

Total liabilities and equity

Base

Percent Change Income Statements 2013 2012

Sales

COGS except excluding depr. and amort.

Depreciation and Amortization

Other operating expenses

EBIT

Interest Expense

EBT

Taxes (40%)

Net Income