Raven Manufacturing Company, Inc. Raven Manufacturing Company, Inc.

Comparative Balance Sheet Cash Flow Statement

December 31, 2016 and December 31, 2015 December 31, 2016

2016 2015 Net Income

Assets
Current Assets Depreciation
Cash 1,590,730 1,462,000 Change in Accounts Receivable
Marketable Securities 10,000 10,000 Change in Inventory
Accounts Receivable 400,000 525,000 Change in Accounts Payable
Inventory 650,000 750,000
Total Current Assets 2,650,730 2,747,000 Cash Flow from Operating Activities -
Investments 59,000 59,000
Fixed Assets Purchase of Equipment
Vehicles -
Furniture & Fixtures 683,000 683,000
Equipment 2,000,000 1,200,000 Cash Flow from Investing Activities -
Leasehold Improvements 100,000 100,000
2,783,000 1,983,000 Payment of ST Bank Note
Less: Accumulated Depreciation (674,000) (549,000) Payment of LT Bank Note
Net Fixed Assets 2,109,000 1,434,000 Dividend payment
Total Assets 4,818,730 4,240,000 Cash Flow from Financing Activities -

Liabilities and Stockholder's Equity Net Increase in Cash -

Current Liabilities 2016 Beginning Cash Balance 1,462,000
Accounts Payable 750,000 640,000 2016 Ending Cash Balance 1,462,000
Short-Term Bank Notes Payable - 150,000
Total Current Liabilities 750,000 790,000 1. Complete the Cash Flow Schedule above
Long-Term Bank Loans 1,100,000 800,000 2. Can Raven meet its short term obligations?
Total Liabilities 1,850,000 1,590,000 3. What is Raven's Current Ratio?
4. What is Raven's Quick Ratio?
Preferred Stock 250,000 250,000 5. What is Raven's Long-Term Debt/Equity
Common Stock 1,000,000 1,000,000 6. Would you say Raven has raised capital through equity or by taking on debt?
Retained Earnings 1,718,730 1,400,000 7. Does that indicate that they or more or less leveraged as a company?
Total Stockholder's Equity 2,968,730 2,650,000 8. This should have an unfavorable effect on what ratio?
9. Would you say Raven is positioning themselves for growth?
Total Liabilities and Stockholder's Equity 4,818,730 4,240,000 10 What is Raven's Days Sales Outstanding?
11. Did Raven pay a dividend in 2016 and if so how much?
Preferred Stock Outstanding 16,667 16,667 12. What is Raven's Return on Assets using EBITDA?
Common Stock Outstanding 100,000 100,000 13. Is this favorable or unfavorable compared to 2015?
 14. Was Raven more or less efficient in regards to Gross Margin % vs last year?
15. Looking at COGS items, what would you say were the contributing factors to this?
Raven Manufacturing Company, Inc. 16. How many months of inventory do they have on hand?
Income Statement 17. If this is a one product Company, what is their breakeven point?
For the year ended December 31, 2016 18. What is Raven's Return on Sales using EBITDA?
19. Is this favorable or unfavorable compared to 2015?
2016 2015 20. Is this due to increased Fixed Costs or mainly a result of price and inefficiencies?
Revenue
Sales 5,183,200 4,566,996 Raven Company is looking at purchasing a machine for $250,000.
They have forecasted their cash in-flows over 4 years to be $95,000 per year.
Labor 1,000,000 789,000 Capital expenditures are only approved if the ROI exceeds a target of 14%
Material 1,526,000 1,236,000
Variable Overhead 800,000 787,000 Present Value
Cost of Goods Sold 3,326,000 2,812,000 Cash Flows
Net Profit 1,857,200 1,754,996 0 $ -
35.8% 38.4% 1 0 X -
2 0 X -
Fixed Expenses 3 0 X -
Salaries 475,000 435,000 4 0 X -
Rent 100,000 100,000 -
Supplies 49,000 37,000
Repairs 53,000 45,000
Insurance 11,000 11,000 21. Should Raven invest in this equipment based on a target of 14%?
Total Fixed Expenses 688,000 628,000 22. What is the Net Present Value?
23. What is the Profitability Index?
EBITDA 1,169,200 1,126,996 24. What is the payback?
25. What is the actual ROI % of this project? PVCO = PVCI x Factor (%, yrs)
Depreciation Expense 125,000 115,000 26. If Raven's interest rate on the ST and LT loans were at 7%, do you think it was a go

EBIT 1,044,200 1,011,996 Present Value of an Annuity of $1 per period for n periods
Period 1% 2% 3% 4% 5%
Taxes 365,470 354,199 1 0.9901 0.9804 0.9709 0.9615 0.9524
Net Income 678,730 657,797 2 1.9704 1.9416 1.9135 1.8861 1.8594
3 2.9410 2.8839 2.8286 2.7751 2.7232
Sales Units 505,678 434,952 4 3.9020 3.8077 3.7171 3.6299 3.5460
Avg Price per Unit $10.25 $10.50 5 4.8534 4.7135 4.5797 4.4518 4.3295
Name:

10 pts

t?
?
to this?

ncies?

ar.

PV Table 10-1 Present Value of $1 due at the end of n periods

Amount Period 10% 12% 14% 15% 16%
1 0.9091 0.8929 0.8772 0.8696 0.8621
= $ - 2 0.8264 0.7972 0.7695 0.7561 0.7432
= - 3 0.7513 0.7118 0.6750 0.6575 0.6407
= - 4 0.6830 0.6355 0.5921 0.5718 0.5523
= - 5 0.6209 0.5674 0.5194 0.4972 0.4761
$ - 6 0.5645 0.5066 0.4556 0.4323 0.4104
7 0.5132 0.4523 0.3996 0.3759 0.3538
8 0.4665 0.4039 0.3506 0.3269 0.3050

was a good business decision and a good use of cash to pay off those loans if this project was presented first? Explain.

12% 14% 16% 18% 20% 5% 12% 14% 18% 20%

0.8929 0.8772 0.8621 0.8475 0.8333 0.9524 0.8929 0.8772 0.8475 0.8333
1.6901 1.6467 1.6052 1.5656 1.5278 1.8594 1.6901 1.6467 1.5656 1.5278
2.4018 2.3216 2.2459 2.1743 2.1065 2.7232 2.4018 2.3216 2.1743 2.1065
3.0373 2.9137 2.7982 2.6901 2.5887 3.5460 3.0373 2.9137 2.6901 2.5887
3.6048 3.4331 3.2743 3.1272 2.9906 4.3295 3.6048 3.4331 3.1272 2.9906