Financial Statements, the Statement of

Cash Flow & Cash Flow Valuation

Income Statement

Records the flow of resources over a specific time

interval, from the beginning to the end - a year.
Accrual Accounting

Recognition of revenues occurs when the efforts needed

to generate the sale have been substantially completed
and title to the goods has passed from the seller to the
buyer.
The expenses required to generate the revenues are then
"matched" to the revenues following the accounting
protocol of "accrual

Accrual = matching expenses to revenues.

Depreciation

The spreading of the cost of a machine/facility over its expected life

To determine three estimates are required:

The assets useful life

Its salvage value
Method of allocation to be employed

Straight line
Accelerated depreciation used to minimize current taxes

Taxes

Tax payable

Short term liability

Deferred taxes

Long term liability

Tax obligations incurred in past periods but not yet paid
Can be used to finance the business

The Balance Sheet

The balance sheet is a "snapshot" at a point in time

of everything the firm owns, and everybody to whom
it owes, i.e., creditors and stockholders.
Assets

Referred to as the "left-hand side" of the balance sheet.

The current assets are listed in one section in the order of
their liquidity.
Inventory is considered a current asset if it will be sold,
converted to account receivables, and then transformed
to cash within a year's period.

Assets also are divided into "tangible" and "intangible.

Tangible assets

Current assets plus fixed assets that you can "touch."

Intangible assets are ephemeral, i.e., they are difficult to

quantify. Examples of intangible assets include goodwill,
trademarks, patents, and the human capital of employees.

While estimating the value of intangible assets is difficult, or even

impossible, these assets can have a huge impact on the market
value of a firm.
A firm may have very little in the way of fixed assets, but may have a
team of software engineers that are the real basis for the value of
the firm's common stock.

Good example of why the market value of a firms equity typically bears
little resemblance to the accounting (or book) value (assets - liabilities) of
owners equity.

Liabilities

Divided between current and long-term.

Preferred stock

A hybrid security that has some of the properties of debt

and some of the properties of equity.
It falls into a gray area and, depending upon the
purpose of the analysis, can either be classified as debt
or equity.

If you are a debt holder analyzing the firm, preferred stock has
an inferior, or "junior," claim to your position. You probably
would consider the preferred stock as equity.
From a common stockholders position, preferred stock has a
superior, or "senior," claim to the cash flows of the firm.

Equity
Accountants typically list a variety of accounts under
the equity section. Standard sub-accounts are:
capital (or common) stock,

capital surplus (or capital in-excess of par),

and
retained earnings.
The equity accounts are called the net worth (or
book value) of the firm, or the difference between
the total assets and the total liabilities.

Statement of Retained Earnings

Expresses the relationship between the retained

earnings (R.E.) at the start of the accounting period
and the ending retained earnings balance.
. .
= . . +

Note: accountants do not generally approve of

making direct adjustments to retained earnings so
the last portion of the equation may be ignored.

Statement of Cash Flow (SCF) Basics

SCF is a summary of a companys transactions for

a given period that affect the cash account.

Statement of where the company gets its cash and

how it spends it.

Income statement cant do this because:

It is derived from the income statement for the period and

(at least) the two balance sheets surrounding the period.

It includes accruals that are not cash flows

Lists only cash flows associated with the sale of goods or services
during the accounting period

Put two balance sheets for different dates together and

calculate all the changes in accounts that occurred over the
period.

Can be an important diagnostic tool and provide insight

into which financial ratios should be calculated to assess
the strengths and weaknesses of the firm.
Cash flow information is increasingly viewed as a (the)
crucial piece of information for assessing the firm and its
financial health by outside audiences.

SCF

The generic structure of the SCF is:

Cash provided (used) by operating activities.

Cash provided (used) by investing activities.

Acquisition/sale of new assets.

Cash provided (used) by financing activities.

Basic running of the business, how fast cash comes in versus how fast
it goes out. Tells us about how past investments are generating cash.

Raising new capital/retiring old, significant sources/uses of cash.

Increase (decrease) in cash.

Cash beginning of the period.
Cash end of the period.

SCF

Operating Activities:

Start with:
Add:
Add:
Subtract:

Total to find:

Net Income (from Operations)

Depreciation & Amortization
Change in Deferred Income Tax
Change in NWC (exclude Cash
and interest bearing liabilities)
Total Cash from Operations

SCF

Investing Activities:

Acquisitions of fixed assets are (generally) cash outflows.

Sales of fixed assets (net of any tax implications) are (generally)
cash inflows.
Acquisitions of financial assets are outflows.
Sales/maturities of financial assets are inflows.

= Cash Flow from Investing Activities.

SCF

Financing Activities:

Subtract the amount of long-term or short-term debt retired.

Add the amounts of newly issued long-term or short-term debt.
Subtract total amount of dividends paid.
Subtract the amount of stock repurchases.
Add the amount of new stock issues.

= Cash Flow from Financing Activities.

Cash Flows and Free Cash Flows

Definitions of Cash Flow

Cash flow

The movement of money into or out of a cash account

over a period of time.
Known as cash earnings
Measures the cash a business generates
Assumes a business current assets and liabilities are
either unrelated to operations or do not change over time.

= + +

Cash flow from operating activities

A more inclusive measure of cash generation

Cash flow from operating activities = Net Cash Flow

Discounted Cash Flow

A family of technique for analyzing investment opportunities

that take into account the time value of money.

Discounted Cash Flow = A sum of money today having the same

value as a future stream of cash receipts and disbursements

Free Cash Flow

Extends cash flow from operating activities by recognizing that

some of the cash a business generates must be plowed back into
the business, in the form of capital expenditure, to support growth.
Cash flow from operating activities less capital expenditure.
A fundamental determinant of the value of a business.

Valuation (Free) Cash Flow

While the SCF is a good diagnostic tool, it does not

present cash flow information in a form useful for
valuation purposes.

Here we do not focus on the change in the cash account as on the

SCF.
Cash itself is really just another asset.

The basic valuation equation.

C3
C1
C2
C4
V C0

....
2
3
4
(1 r ) (1 r )
(1 r )
(1 r )

Valuation (Free) Cash Flow

Need forecasts of all future cash flow generated by

current ownership of a firm (asset).

Free Cash Flow (FCF).

The cash flow that would be generated by a firm and be available

to be dispersed to its claimants if the firm were all equity financed.

It is important to note that free cash flow is on an

enterprise level and is used to value a firm.

Free Cash Flow (FCF)

The most theoretically correct cash flow figure to

use in DCF valuation is labeled Free Cash Flow.
FCF:

Start with:
Add back:
Subtract:
Add:
Subtract:
Add:

Net Income (from Operations)

Depreciation & Amortization
Change in NWC
Change in deferred income tax often
ignored
Net Capital Expenditures
After tax interest = (1-Tc)Interest

Note: this is really free cash flow from operations, we are ignoring any non-operating
cash flows not contained in Net Cap Ex.

Free Cash Flow (FCF)

Alternatively, FCF can be estimated as:

Start with:
net

EBIT less tcEBIT = EBIT(1-tc) unlevered

income

Add:
Subtract:
Subtract:
Add:

Depreciation & Amortization

Net Capital Expenditures
Change in NWC
Change in Deferred Income Taxes

Why Cash Flow and NOT Net Income

Net income is not a measure of cash flow so an

adjustment must be made.

Accrual accounting.
Off income statement expenses.
Interest.

Net income is, however, a reasonable place to

start. It captures, in an accounting sense, what
existing assets are generating.

Free Cash Flows and Accrual Accounting

The most obvious problem with using net income to

understand cash flow is that non-cash expenses are
deducted.

The largest and most commonly deducted are

depreciation and amortization.

In order to help turn net income into free cash flow

we have to add these expenses back into net
income.

Revenues

Revenue is booked when sales are made. This is true

regardless of whether the sale is for cash or credit.
Cash flow must reflect any and only cash flows.
If only cash sales are considered, what would that miss?

The timing of credit sales.

This problem is corrected by subtracting the change in accounts
receivable.

Expenses

Expenses work the same way.

Expenses are booked even if only an accounts payable is
recorded rather than an actual cash outflow.
This is correct by adding the change in accounts payable.
The shortcut used to deal with lots of these corrections at
once is to subtract the change in NWC.

Free Cash Flows and Tax Accruals

There are three tax accrual accounts that tells what is the
difference between allowance for income taxes in the
public books and actual cash taxes on the tax books.

Prepaid taxes is a short term asset account,

Taxes payable is a short term liability, and
Deferred taxes is a long term liability.

Book taxes can be changed to cash taxes by adding

the change in the asset account and subtracting the
changes in the liability accounts to allowance for income
taxes.

However, in most instances taxes paid is not the goal,

rather it is free cash flow.

The two short term accounts are dealt with when we look at the
change in NWC so we only have to add the change in deferred
taxes to net income.

FCF and Off Income Statement Outflows

An expense that must be taken out of free cash flow that

isnt reflected on the income statement is net capital
expenses (CAPEX).

This can be estimated by the change in gross fixed assets

over the period (or the change in net fixed assets plus the
periods depreciation).

Free Cash Flows and Interest

A final thing taken out of net income that should

not be taken out of free cash flow is interest
payments.

Should not be removed from free cash flow

because interest is a cash flow that has been
generated and actually paid to contributors of
capital by the firm.

Therefore, add interest back into net income.

Taxes For The All Equity Firm

The big difference between the taxes paid by an

all equity firm and a firm that uses debt is that the
firm that uses debt pays interest.

The payment of interest generates a tax deduction.

For each dollar of interest paid the firm saves

$Interest tc, where tc is the firms tax rate.

Thus the total savings that an all equity firm would not
have received is $Interest tc.

Therefore, subtract $Interest tc from net income

to find free cash flow.

After Tax Interest

A shortcut commonly used in calculating free

cash flow is to add after tax interest.

This takes care of putting interest back into net

income and adjusting taxes for the what if part of
the exercise all at once.

In other words, adding back interest and

subtracting the interest tax shield sequentially
from net income effectively adds after tax interest
to net income: +$Interest tc$Interest = +(1tc)$Interest

Evaluating Financial Performance

Financial Analysis and Planning

Financial Analysis is the selection, evaluation, and

interpretation of financial data, along with other pertinent
information, to assist in investment and financial
decision-making.

May be used internally to evaluate issues such as employee

performance, the efficiency of operations, and credit policies.
May be used externally to evaluate potential investments and
the credit-worthiness of borrowers, among other things.

The financial analyst must select the pertinent

information, analyze it, and interpret the analysis,
enabling judgments on the current and future financial
condition and operating performance of the firm.

Financial Ratios

Combine information from the financial statements to

help us understand and analyze the firm

Example: turnover ratio ( ), the numerator is an

amount from an annual income statement (CGS), while the
denominator is a balance sheet amount (Inventory)
Problem: the balance sheet amount is a snapshot and reflects
only an instant or moment, there is an inconsistency between
the numerator and the denominator.
Solution: Use average of balance sheet amount

The appropriate ratio to use would depend on what the

analyzer is trying to understand about the company
Could be seen as a tool to test a hypothesis about the
firm

Financial Ratios

Financial ratios are used to compare actual financial

results with various benchmarks of performance, such as

a firms own historical financial ratios to identify improving and

deteriorating trends,
comparable ratios from other firms in the same industry, or
comparison of actual ratios versus a previously developed
financial plan.

Financial ratios have two primary uses:

Financial control (or analysis)

The activity of comparing ratios to any of these benchmarks

Financial planning

The use of financial ratios to project a firms future financial

position.

Ratio Analysis

In financial ratio analysis one must select the

relevant information primarily the financial
statement data and evaluate it. Some things to
keep in mind are that:

A financial ratio is a comparison between one bit of

financial information and another. A single ratio will not
provide an all encompassing view of the corporation.
There is no correct value the appropriate value depends
on the analyst and strategy of the corporation.
The best performance benchmark to determine whether
the company is doing well is to do a trend analysis; that
is, calculate the ratios for a company over several years
and see how they change over time.

Classification of Ratios

Ratios can be classified according to the way they

are constructed and their general characteristics. By
construction, ratios can be classified as:

Coverage Ratio

Return Ratio

a measure of the net benefit, relative to the resources expended

Turnover Ratio

a measure of a firms ability to satisfy (meet) particular

obligations

a measure of the gross benefit, relative to the resource

expended

Component percentage

the ratio of a component of an item to the item

Ratios to measure financial performance can be

divided into three major categories.
Profit Margin or Profitability Ratios

Asset Turnover

compare components of income with sales

measure a company's efficiency in using its assets
it measures the sales generated per dollar of assets

Financial Leverage

Profit Margin or Profitability Ratios

Provide an idea of what makes up a firms income

and are usually expressed as a portion of each dollar
of sales.
In simpler terms these ratios:

Measure the portion of each dollar of sales that ends up

as profit.
Helps managers determine the companys pricing
strategy.
Helps determine the companys ability to control operating
cost.

Return on Assets

The ratio of net income (net profit) to assets.

It measures how efficiently a company manages and allocates
resources; i.e., how many dollars of earnings they derive from
each dollar of assets they control.
Measures profits considering the money provided by both owners
and creditors.

= =

Note that there exist an inverse relationship between profit margin

and asset turnover. High profits require lots of assets and this in
turn creates lower asset turnover.

Good: High profit margin and low asset turnover or high profit margin and
high asset turnover
Bad: Low profit margin and low asset return

Gross Margin

The ratio of gross income or profit to sales.

The percent of total sales revenue that the company retains
after incurring the direct costs associated with producing the
goods and services sold by a company.
It indicates how much of every dollar of sales is left after costs
of goods sold (variable in nature).
It establishes the percentage of sales dollars (or cents per
dollar) that pays for fixed costs and adds to profits.

Operating Expenses to Sales

Gives an indication of the ability of a business to convert

income into profit.
Generally, businesses with low ratios will generate more
profit than others.

Operating margin

A measurement of what proportion of a company's

revenue is left over after paying for variable costs of
production such as wages, raw materials, etc.

Zero Profit Sales Volume

Used to estimate the breakeven sales volume (in $

amount) of a corporation.
Company loses money when sales are below zero-profit
sales volume and makes money if above.

Asset Turnover

Asset turnover is meant to measure a company's

efficiency in using its assets.

The higher the number, the better.

Measures the sales generated per dollar of assets.

A high turnover equates to a corporation that is not assetintensive.

The higher a company's asset turnover, the lower its

profit margin tends to be (and vice-versa).

Inventory Turnover

A ratio showing how many times a company's inventory is

sold and replaced over a period.
COGS (cost of goods sold) is used because sales are
recorded at market value, while inventories are usually
recorded at cost.

=

365
# =

=
/365

Collection Period

The approximate amount of time (days) that it takes for a

business to receive payments owed, in terms of
receivables, from its customers and clients.
A short period is desirable because the firm obtains cash
more quickly for reinvestment or for paying its own bills.
Net sales, instead of credit sales, give a close solution
when the amount of credit sales is not available.

/
=

/
=
/365

Receivables Turnover

Used to quantify a firm's effectiveness in extending credit

as well as collecting debts.
Is an activity ratio, measuring how efficiently a firm uses
its assets.

Days Sales in Cash

It indicates the effectiveness of the firm's credit and

collection policies, and the amount of cash and
marketable securities required as buffer for unexpected
delays in cash collection.
Measure of liquidity.
It is the inverse of cash turnover ratio.

Fixed Asset Turnover

The ratio of sales to fixed assets.

Indicated the ability of the firms management to put the
fixed assets to work to generate sales.
Measures a company's ability to generate net sales from
fixed-asset investments - specifically property, plant and
equipment (PP&E) - net of depreciation.
A higher fixed-asset turnover ratio shows that the
company has been more effective in using the investment
in fixed assets to generate revenues.

Payables Period

Control ratio for a liability rather than asset as those

described before.
An indicator of how long a company is taking to pay its
trade creditors.
Determines how long it takes a firm, on average, to go
from creating a payable (buying on credit) to paying for it
in cash.

=
/365

Cash-to-Cash Cycle (Cash Conversion Cycle)

Used to calculate how long cash is tied up in the main cash

producing and cash consuming areas: receivables, payables
and inventory.
The lower the number the better.
Steps:

Step 1 - Calculate Sales per day and Cost of Goods Sold (CGS)
per day

365
365

4
=

365
365

Step 2 - Calculate Component Days

=
=

/
/365

/365

/365

/365

/365
/365

The results are show as whole numbers

Step 3 - Calculate the Cash to Cash Cycle

=
+

Financial Leverage

Balance Sheet Ratios

Coverage Ratios

Debt to Assets Ratio

Debt to Equity Ratio
Times Interest Earned
Times Burden Covered

Market Value Leverage Ratios

Liquidity Ratios

Current Ratio
Acid Test Ratio

Debt to Assets Ratio

The portion of assets that are financed with debt (both shortterm and long-term debt).
The measure gives an idea to the leverage of the company
along with the potential risks the company faces in terms of its
debt-load.

A debt ratio of greater than 1 or 100% indicates that a company

has more debt than assets, meanwhile, a debt ratio of less than
1 indicates that a company has more assets than debt.

Debt to Equity Ratio

Indicates the relative uses of debt and equity as sources of capital

to finance the firms assets, evaluated using book values of the
capital sources.
A measure of a company's financial leverage calculated by
dividing its total liabilities by stockholders' equity.
It indicates what proportion of equity and debt the company is
using to finance its assets.

=

A high debt/equity ratio generally means that a company has been

aggressive in financing its growth with debt. This can result in
volatile earnings as a result of the additional interest expense.

Times Interest Earned or Interest Coverage Ratio

Used to measure a company's ability to meet its debt
obligations.
It is calculated by taking a company's earnings
before interest and taxes (EBIT) and dividing it by the
total interest payable on bonds and other
contractual debt.
Failing to meet interest obligations could force a
company into bankruptcy.

Times Burden Covered

Shows the coverage of the total debt obligations of the

firm, old and new.
Measures the burden of debt on the firm.
Coverage should increase as Business Risk increases.
Weakness: assumes the company will pay its existing
loans to zero.

=

+
1

Market Value Leverage Ratios

These ratios are more relevant than Book Value

ratios.
Book Value does not generally give a true picture of
the investment of shareholders in the firm because:

Earnings are recorded according to accounting principles

which may not reflect the true economics of transactions,
and
Due to inflation, the dollar from earnings and proceeds from
stock issued in the past do not reflect todays values (i.e., it is
stated in historical terms)

Market Value is the value of equity as perceived by

investors. These are based on investors
expectations about future cash flows.




=
#


=

+

Market value of debt = total liabilities

Equity = number of share of Stocks x price per share

Current Ratio

The ratio is mainly used to give an idea of the company's ability

to pay back its short-term liabilities (debt and payables) with its
short-term assets (cash, inventory, receivables).

The higher the current ratio, the more capable the company is
of paying its obligations.
A ratio under 1 or 100% suggests that the
company would be unable to pay off its obligations if they came
due at that point.

Acid Test Ratio

A stringent test that indicates whether a firm has enough

short-term assets to cover its immediate liabilities without
selling inventory.
The acid-test ratio is far more strenuous than the current
ratio, primarily because the working capital ratio allows for
the inclusion of inventory assets.
This ratio is similar to the current ratio except that the
acid-test ratio does not include inventory and prepaids as
assets that can be liquidated.

Companies with ratios of less than 1 cannot pay their

current liabilities and should be looked at with extreme
caution.
If the acid-test ratio is much lower than the working capital
ratio, it means current assets are highly dependent on
inventory. Retail stores are examples of this type of
business.

Return on Equity

Most popular ratio when examining the financial

performance of a corporation.
The amount of net income returned as a
percentage of shareholders equity.
Return on equity measures a corporation's
profitability by revealing how much profit a company
generates with the money shareholders have
invested.

How much value was created by capital employed

Combines stock (balance sheet) and flow (income

statement) accounting information.
ROE is expressed as a percentage.

Determinants of ROE

ROE or Market Price

The role of the financial manager is to maximize

shareholders value maximize the price of the stock
rather than maximize ROE. But which one should be
used when measuring financial performance? Neither
because of they both have problems.

Problems with ROE

Timing

It is backward looking and only considers the short-term.

Fails to capture the full impact of multi-period decisions because it
only uses earnings from a single year.

Risk

ROE does not take risk into consideration.

Solution: Use Return on Invested Capital.


(1 )
=
+

Interest bearing debt = long-term debt due in one year + long

term debt
A calculation used to assess a company's efficiency at
allocating the capital under its control to profitable investments.
The return on invested capital measure gives a sense of how
well a company is using its money to generate returns.
Comparing a company's return on capital (ROIC) with its cost of
capital (WACC) reveals whether invested capital was used
effectively.

Value

ROE uses book value rather than market value

Solution: Use P/E Ratio not the Earnings Yield ratio because
this last one suffers from a severe timing problem.

A high P/E suggests that investors are expecting higher

earnings growth in the future compared to companies with
a lower P/E.

Problems with Market Price

Difficulty specifying how operating decisions affect the

price of the stock.
Managers know more than outside investors and should
not consider the assessment of less informed investors.
Depends on factors outside the companys control.

Possible Problems with Using Financial Ratios

There is no underlying theory, so there is no way to know

which ratios are most relevant.
Benchmarking is difficult for diversified firms.
Globalization and international competition makes
comparison more difficult because of differences in
accounting regulations.
Firms use varying accounting procedures.
Firms have different fiscal years.
Extraordinary, or one-time, events.

EVA

Instead the financial manager should use the

Economic Value Added (EVA).
Measures the value added to shareholders by
management during a given year.
True economic profit over a year.

EVA = EBIT (1- tax) (Operating Capital)(After tax percentage cost of capital)
EBIT (1- tax) - (Operating Capital)(W ACC)

Case of the Unidentified Industries-2006

Background Information

Advertising agency

Revenue commissions equal to 15% of media purchases

$1.00 of revenue creates $6.67 of account receivable (i.e., $1.00/0.15)

Firms which transact with customers

In cash on a face-to-face basis will have a zero day accounts

receivable.
On a credit card basis will receive payment from the credit card issuing
bank within a week or two of the charge and not when the customer
pays the credit card bill.
Business transaction on open account usually have credit term of 30
days or longer
Department stores with own credit card may have a collection period
greater than 30 days
Most will be retailers

Loans of commercial banks are classified as

accounts receivable and deposits as accounts
payable.
Electric and gas utility

The gas portion of the utility is a tangible product that is

carried as inventory

Firm
Advertising Agency
Airline
Bookstore Chain
Commercial Bank
Computer Software Developer

Department Store Chain

Electric and Gas Utility
Family Restaurant Chain
Health Maintenance
Organization
Online Bookseller
Online Computer Vendor

Pharmaceutical Manufacturer
Retail Drug Chain
Retail Grocery Chain

Students

Should be

Service Providers no inventory

Advertising Agency
Airline
Commercial bank
Health maintenance organization (HMO)

Which would match with: E, G, M, N

So what do we know about each industry

Advertising Agency

Low fixed assets and long accounts receivable collection

period ($6.67 for every $1 as mentioned above)
Accounts payable are high because the agency does not
usually pay for its media purchases until after the agency
has collected from its client the funds needed to pay the
media.
E

Airline

High level of property, plant and equipment (airplanes,

ground equipment, reservation system)
M

Commercial bank

Assets are mostly financial in nature

Cash, accounts receivable (loans), accounts payable
(deposits)
N

Health maintenance organization (HMO)

Liquid assets, high accounts receivable, no inventory,

accounts payable (to service providers)
G

Firms with account receivable collection

periods of under 30 days i.e., those with
business transactions

H
I
B
A
K

Accounts
Receivables
Collection Period
2 days
4 days
7 days
12 days
16 days

Inventory Turnover

22.3 x
10.2 x
2.7 x
11.4 x
5.7 x

Plant &
Equipment/Ass
ets
81%
55%
25%
9%
41%

Retailers with account receivable collection

periods of under 30 days

Bookstore

Family restaurants

Low property and equipment/assets

A

Drug stores

Fast inventory turnover, mostly cash business

H

Online booksellers

Slowest inventory turnover

B

Grocery chains

Faster inventory turnover because of produce

I

Left overs

C
D
F
J
L

Inventory (P+E)/Asset Inventory/

A/R
Turnover
s
Assets % Collection
Period
79.8 x
9
2
36

Net
Profits/
Revenue
0.064

1.6 x
5.2 x

14
4

5
2

68
77

0.158
0.285

2.3 x
19.8 x

36
69

22
2

41
40

0.063
0.068

Matches

Electric and gas utility

Online vendor of office computer

Large amount of assets committed to net plant and equipment

Low inventory
L
High inventory turnover
C

Department store

High plant and equipment (stores0 and inventory

J

Computer software developer

Lower investment in plant and equipment than a

pharmaceutical manufacturer
F

Pharmaceutical manufacturing

Balance Sheet

Line
1.
2.
3.
4.
5.
6.
7.

Balance Sheet Percentages

Cash and marketable securities
Accounts receivable
Inventories
Other current assets
Plant & equipment (net)
Other assets
Total assets

C
D

F
G
H
I
J

L
M

54 12 39 19
8 49 11
1
3
1
8
0 18
2
7
3 24
8 37 13 51
1
3
8 12
5
2 90
15 42
2
5
0
2
0
7 22 17 35
2
0
0
2
2 11
8
5
6
0
3
3
5
2
6
6
0
9 25
9 14
4
4
7 81 55 36 41 69 66
0
11 16 15 46 46 25 32
6 13 33
3 18
8
9
100 100 100 100 100 100 100 100 100 100 100 100 100 100

8.
9.
10.
11
12.
13.
14.
15.
16.

Notes payable
Accounts payable
Accrued items
Other current liabilities
Long-term debt
Other liabilities
Preferred stock
Common stock
a
Total liabilities and net worth

0
0
0 10
6
0
8
6
3
4
0
3
4 73
37 26 43
2 39
4 46
7 17 16 24
5
4
5
15 22 26
1
1
3
2
8
4
0
5
0
0
0
0
0
0 11
9 25
0 13
9
3
5
5 19
0
41
0
2
5 15
0
7 16 33 27
0 30 10 15
0 17 11 14
6 10
0
9 13 10
7 26 15
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
7 35 18 56 25 58 37 41 21 41 59 29 48
7
100 100 100 100 100 100 100 100 100 100 100 100 100 100

Financial Data

17. Current
1.52 1.23 1.11 1.65 0.92 2.18
assets/current
liabilities
18. Cash, MS, and
1.18 0.31 0.91 1.12 0.82 1.94
ARs/current liabilities
19. Inventory turnover
11.4
2.7 79.8
1.6 NA
5.2
(X)
20. Receivables
12
7
36
68 201
77
collection period
(days)
21. Total debt/total
0.41 0.00 0.02 0.15 0.21 0.00
assets
22. Long-term
0.86 0.00 0.11 0.08 0.33 0.00
debt/capitalization
23. Revenue/total assets 2.297 1.613 2.419 0.439 0.675 0.636

24. Net profit/revenue

1.10

0.37

0.96 1.34 1.69 0.95 0.94 1.17

1.10

0.08

0.21 0.36 0.59 0.37 0.72 1.17

NA

22.3

10.2

2.3

5.7 19.8

NA

89

41

16

12 4,071

0.16

0.23

0.35 0.31 0.00 0.33 0.14 0.88

0.14

0.26

0.57 0.37 0.00 0.47 0.16 0.15

40

2.079

NA

1.90 2.956 0.675 2.767 0.423 0.542 0.081

0.042 0.029 0.064 0.158 0.074 0.285 0.022 0.059 0.016 0.063 0.037 0.068 0.072 0.204

25. Net profit/total assets 0.097 0.046 0.155 0.069 0.050 0.181 0.045 0.112 0.047 0.042 0.102 0.029 0.039 0.016
26. Total assets/net
worth
27. Net profit/net worth

15.020 2.840 5.600 1.780 4.030 1.740 2.740 2.450 4.670 2.450 1.690 3.30 2.10 13.28
1.459 0.131 0.865 0.123 0.200 0.314 0.123 0.275 0.218 0.104 0.173 0.096 0.082 0.218