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You will be provided with financial data to analyze (James Confectioner’s case in your text). These assignments are intended to develop your ability to work with financial data, analyze it (breakeven and cash conversion cycle) based on the theoretical foundation you have been building, and make appropriate recommendations that will enhance the financial performance of a business or organization.

Sheet1

JAMES CONFECTIONERS
Financial Statements
INCOME STATEMENTS 20XX BREAKEVEN ANALYSIS
20XX
# units produced 12,875,000
Sales $3,897,564 Price per Unit
COGS $2,625,340 Fixed Costs
GP $1,272,224 Variable Costs
SGA Exp. $912,030
Deprec. $74,054 INDICATED UNIT B/E
EBIT (Oper. Income) $837,976
Interest $119,658 INDICATED SALES B/E
Other Exp. $1,248
EBT $717,070
Income Taxes $551,836 20XX CASH FLOW MGMT ANALYSIS
Net Income $165,234
Cash Conversion Cycle
BALANCE SHEETS
20XX 20XX PRICING RECOMMENDATIONS
ASSETS
Based on the ratio analysis from LU1 and your BE analysis
CURRENT ASSETS here, what pricing recommendations would you have for
Cash $161,254 James confectioners? Keep in mind that cocoa, milk and
Accounts Receivable $507,951 sugar are increasing in price. Assume that cocoa has a
Inventories $568,421 price elasticity of 2 and demand elasticity of .75.
Other Current $116,909 Go to BLS.gov to research milk and sugar prices.
TOTAL CURRENT ASSETS $1,354,535
# units produced
FIXED ASSETS Price per Unit
Gross PP&E Fixed Costs
Accumulated Depreciation Variable Costs
Net PP&E $556,327
Other Fixed $104,815 INDICATED UNIT B/E
TOTAL ASSETS $2,015,677
INDICATED SALES B/E
LIABILITIES & EQUITY
CURRENT LIABILITIES
Accounts Payable/Accruals $312,430
Short Term Debt $362,822
TOTAL CURRENT LIABILITIES $675,252
LONG TERM DEBT $564,390
STKHLDRS EQUITY
Common Stock (par+paid-in) $1,000
Retained Earnings $775,036
TOTAL LIABILITIES & EQUITY $2,015,678

Sheet2

Sheet3

Sheet1

JAMES CONFECTIONERS
Financial Statements
Recommendation. Based on the analysis there is one main thing that the company needs to work on. The company needs to improve on its account receivable turnover. The company has a low A/R turnover of 3; it is lagging behind its peers in terms of collections. The company needs to improve on its average collections to increase its liquidity. Higher liquidity improves a company’s ability to service its debts and also its ability to increase and improve its inventory. Through improved inventory and sales, the company can improve its profitability.
INCOME STATEMENTS 20XX RATIO ANALYSIS
20XX SUBJECT INDUSTRY MEDIAN
Sales $3,897,564 Current 2.0 1.7
COGS $2,625,340 Quick 1.1 0.8
GP $1,272,224 A/R Turn 3.0 15.7
SGA Exp. $912,030 Avg Coll 3.1 23
Deprec. $74,054 Inv Turn 4.6 4.9
EBIT (Oper. Income) $837,976
Interest $119,658 OI ROI
Other Exp. $1,248
EBT $717,070 OPM
Income Taxes $551,836 FA Turn 7 8.2
Net Income $165,234
Debt/TA 76% 70%
Times Int 7 2.3
BALANCE SHEETS
20XX ROE 21% 16.5%
ASSETS ROA 12% 5.6%
CURRENT ASSETS
Cash $161,254
Accounts Receivable $507,951
Inventories $568,421
Other Current $116,909
TOTAL CURRENT ASSETS $1,354,535
FIXED ASSETS
Gross PP&E
Accumulated Depreciation
Net PP&E $556,327
Other Fixed $104,815
TOTAL ASSETS $2,015,677
LIABILITIES & EQUITY
CURRENT LIABILITIES
Accounts Payable/Accruals $312,430
Short Term Debt $362,822
TOTAL CURRENT LIABILITIES $675,252
LONG TERM DEBT $564,390
STKHLDRS EQUITY
Common Stock (par+paid-in) $1,000
Retained Earnings $775,036
TOTAL LIABILITIES & EQUITY $2,015,678

Sheet2

Sheet3

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