Profitability and Coverage Analysis
6. Financial statements of Friends Company
The financial statements of Friends Company that were utilized in our financial analysis are presented below:
Friends Company |
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December 31 |
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20X9 |
20X8 |
20X7 |
|
Assets |
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Current assets: |
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Cash and cash equivalents |
$ 3,300 |
$ 3,500 |
$ 2,200 |
Accounts receivable |
2,900 |
2,800 |
2,750 |
Inventories |
2,600 |
2,300 |
2,100 |
Prepaid expenses |
760 |
930 |
850 |
Total current assets |
9,560 |
9,530 |
7,900 |
Investments |
8,380 |
7,900 |
4,080 |
Property, plant and equipment (at cost) |
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Land |
200 |
200 |
200 |
Buildings |
3,860 |
3,500 |
3,100 |
Machinery, equipment |
8,720 |
7,620 |
7,200 |
Construction in progress |
650 |
600 |
570 |
Less: Allowance for depreciation |
(5,500) |
(4,200) |
(3,090) |
Property, plant and equipment (net) |
7,930 |
7,720 |
7,980 |
Goodwill |
1,000 |
1,000 |
1,000 |
Total Assets |
26,870 |
26,150 |
20,960 |
Liabilities and Stockholder's Equity |
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Current liabilities: |
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Accounts payable |
1,600 |
1,200 |
900 |
Accrued expenses |
1,800 |
1,500 |
1,200 |
Income taxes payable |
900 |
700 |
600 |
Warranty liability |
1,000 |
800 |
660 |
Total current liabilities |
5,300 |
4,200 |
3,360 |
Long-term notes payable |
3,220 |
6,000 |
3,700 |
Stockholder's equity: |
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Common stock |
250 |
250 |
250 |
Paid-in capital |
500 |
500 |
500 |
Retained earnings |
17,650 |
15,250 |
13,200 |
Treasury stock, at cost |
(50) |
(50) |
(50) |
Total stockholder's equity |
18,350 |
15,950 |
13,900 |
Total Liabilities and Stockholder's Equity |
26,870 |
26,150 |
20,960 |
Friends Company |
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Year Ended December 31 |
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20X9 |
20X8 |
20X7 |
|
Sales |
$ 14,000 |
$ 12,500 |
$ 10,000 |
Cost of sales |
8,500 |
7,800 |
6,000 |
Gross profit |
5,500 |
4,700 |
4,000 |
Selling, general and admin. expenses |
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General administration expenses |
610 |
490 |
480 |
Selling expenses |
460 |
400 |
350 |
Research and development |
150 |
145 |
140 |
Total SG&A |
1,220 |
1,035 |
970 |
Operating profit |
4,280 |
3,665 |
3,030 |
Non-operating expenses |
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Interest revenues |
160 |
120 |
100 |
Interest expenses |
220 |
210 |
180 |
Total non-operating expenses |
(60) |
(90) |
(80) |
Income before taxes |
4,220 |
3,575 |
2,950 |
Income taxes |
1,520 |
1,275 |
1,150 |
Net income |
2,700 |
2,300 |
1,800 |
Friends Company |
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Years Ended December 31 |
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2009 |
2008 |
|
Cash flows from operating activities: |
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Net income |
$ 2,700 |
$ 2,300 |
Add: Depreciation |
1,300 |
1,110 |
Net change in working capital |
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Accounts receivable |
(100) |
(50) |
Inventories |
(300) |
(200) |
Prepaid expenses |
170 |
(80) |
Accounts payable |
400 |
300 |
Accrued expenses |
300 |
300 |
Income taxes payable |
200 |
100 |
Warranty liability |
200 |
140 |
Net cash provided by operating activities |
4,870 |
3,920 |
Cash flows from investing activities: |
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Capital expenditures |
(1,510) |
(850) |
Purchase of securities and other investments |
(480) |
(3,820) |
Net cash used in investing activities |
(1,990) |
(4,670) |
Cash flows from financing activities: |
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Proceeds from issuance of debt |
- |
2,300 |
Repayments of debt |
(2,780) |
- |
Dividends paid to stockholders |
(300) |
(250) |
Net cash (used in) provided by financing activities |
(3,080) |
2,050 |
Net cash flows |
(200) |
1,300 |
Cash and cash equivalents |
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At beginning of period |
3,500 |
2,200 |
At end of period |
$ 3,300 |
$ 3,500 |