Tardis Transport, Inc.

Balance Sheet

Index Analysis

*In $000s*

2010

2011

2012

2013

2010

Cash
Receivables
Inventory
Net fixed assets
Total assets

$214.00
2219
2113
1202
$5,748.00

$93.00
2346
2869
1593
$6,901.00

$42.00
2388
3646
1878
$7,954.00

$38.00
2692
4262
2561
$9,553.00

100.0
100.0
100.0
100.0
100.0

Accounts payable
Notes payable
Accruals
Long-term debt
Common stock
Retained earnings

$1,131.00
500
350
756
250
2761

$1,578.00
650
650
961
250
2812

$1,848.00
750
650
1389
250
3067

$2,968.00
750
650
1843
250
3092

100.0
100.0
100.0
100.0
100.0
100.0

Total liabilities and

Shareholders' equity
Current Ratio

$5,748.00
$6,901.00
2.295 Quick Ratio

$7,954.00
$9,553.00
0.162 Total Debt Ratio

100.0
0.650 Debt to Equity

The current ratio of Tardis Transport, INC shows that for every $1 of debt, the business has $2.3 of current assets. However after performing an ac
assess the business's ability to meet it's current debts with the most liquid current assets, we find that for every $1 in debt, the Tardis Tranport's c
$0.16. This is because the business has most of its current assets tied up in inventory, which explains the misleading current ratio. If I were to ha
statement I would be able to calculate the inventory turnover which is more than likely low.

Becuase of Tardis Transport, INC's inability to cover it's current debts with its' most liquid current assets, it is reasonable to assume that the compa
payables, which is exactly the case. From 2012 to 2013 the company has increased it's payables debt by 162%.

Also, after calculating the debt ratio of Tardis Tranport, INC (TD/TA), I found that that 65% of it's assets are already being financed with debt. In ot
company to finance because other creditors are already financing 65% of it's assets and they would be the first in line to receive 65 cents on ever
liquidate immediately.

When calculating the debt-to-equity ratio, it is apparent that Tardis Tranport, INC has financed most of it's business's growth through debt. The am
business through this debt could outwiegh the earnings generated by the company, however I would need the Income Statements of Tardis in orde
issue.

When calculating the debt-to-equity ratio, it is apparent that Tardis Tranport, INC has financed most of it's business's growth through debt. The am
business through this debt could outwiegh the earnings generated by the company, however I would need the Income Statements of Tardis in orde
issue.

Index Analysis
2011

2012

2013

43.5
105.7
135.8
132.5
120.1

19.6
107.6
172.6
156.2
138.4

17.8
121.3
201.7
213.1
166.2

139.5
130.0
185.7
127.1
100.0
101.8

163.4
150.0
185.7
183.7
100.0
111.1

262.4
150.0
185.7
243.8
100.0
112.0

120.1
1.858

138.4

166.2

However after performing an acid test to in order to better

$1 in debt, the Tardis Tranport's current assets cover only
ding current ratio. If I were to have access to the income

onable to assume that the company is stretching it's

y being financed with debt. In other words, this is a risky

n line to receive 65 cents on every dollar if Tardis were to

ss's growth through debt. The amount of cost incurred by the

come Statements of Tardis in order to further investigate this

ss's growth through debt. The amount of cost incurred by the

come Statements of Tardis in order to further investigate this

Excess Returns
Quarter
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
Beta

Correlation Coefficient

Excess Returns for

Market Index Portfolio
-0.03
0.05
0.02
0.01
0.07
-0.01
-0.01
0.08
0.03
-0.08
0.02
0.04
0.03
-0.03
0.01
0.05
0.08
0
-0.01
-0.07
0.02
-0.02
-0.05
0.7108

0.8755

Excess Returns for

Dalek
Extermination
-0.01
0.06
-0.01
0.03
0.05
0.02
-0.03
0.04
0.01
-0.05
0.01
0.04
0.02
-0.04
0.01
0.03
0.07
-0.03
-0.02
-0.04
0.03
0.01
-0.05

Moderately Strong
Positive Correlation

Characteristic Line Graph

Excess Returns for Dalek Extermin
0.08
0.06
0.04
0.02

-0.1

-0.08

-0.06 -0.04

-0.02

0.02

0.04

0.06

0.0

-0.02
-0.04
-0.06
Excess Returns for Dalek Extermination
Linear (Excess Returns for Dalek Extermination)

Because the Beta, or slope, for Dalek Extermination, In

below 1, then it would be considered a "Defensive"
investment. A stock with a beta > 1 would be consider
"Aggresive."

ic Line Graph
Dalek Extermination

0.02

0.04

0.06

0.08

r Dalek Extermination

turns for Dalek Extermination)

Dalek Extermination, Inc is

dered a "Defensive"
a > 1 would be considered

0.1

Project A

Investment
-$19,500.00

Add.Depreciation

1
$5,000.00
6499.35
-1499.35
-524.7725
-974.5775
6499.35

2
$5,000.00
8667.75
-3667.75
-1283.71
-2384.0375
8667.75

Incremental Cash
Flows

$5,524.77

$6,283.71

$5,524.77

$6,283.71
$11,808.49

Depreciation
Tax (35%)

End of Year (in $s)

3
4
5
$6,000.00
$6,000.00
$7,000.00
2887.95
1444.95
0
3112.05
4555.05
7000
1089.2175
1594.2675
2450
2022.8325
2960.7825
4550
2887.95
1444.95
0
$4,910.78

$4,405.73

$4,550.00

6
$7,000.00
0
7000
2450
4550
0
$4,550.00

Terminal Yr
Salvage
Tax
Operating Cash Flows
Cumulative
PBP in years
NPV
IRR
PI
K

-$19,500.00
3.64
$9,091.11
19.0517%
1.466
6.54%

$4,910.78
$4,405.73
$4,550.00
$4,550.00
$16,719.27 $21,125.00 $25,675.00 $30,225.00

NPV Profile A

Annual Discount Rate

0%
1%
2%
3%
4%
5%
6%
6.54%
7%
8%
9%
10%
11%
12%
19%

NPV Profile B

Annual
NPV Accept Discount
Rate
0%
$16,900
1%
$15,505
2%
$14,191
3%
$12,952
4%
$11,782
$10,677
5%
$9,632
6%
$9,091
6.54%
$8,643
7%
$7,706
8%
$6,819
9%
$5,977
17%
$5,177
$4,418
$0

NPV Accept
$18,200
$16,623
$15,131
$13,719
$12,381
$11,112
$9,908
$9,283
$8,765
$7,678
$6,644
$0

When choosing between Project A&B. . .

Project B is the best choice.
The Net Present Value in Project B is greater than Project A. Although the IRR is
greater for project A, the net present value is the amount that maximizes
shareholder value, and it should be used for investment decisions.

At the cost of capital (6.54%), AKA: the hurdle rate, Project B would still be the bes
choice because the NPV is still greater than Project A.

End of Year (in $s)

7
$8,000.00
0
8000
2800
5200
0

Add.Depreciation

1
$8,000.00
$9,165.75
-$1,165.75
-408.01
-757.74
9165.75

2
$8,000.00
$12,223.75
-4223.75
-1478.31
-2745.44
12223.75

3
$8,000.00
$4,072.75
3927.25
1374.54
2552.71
4072.75

$5,200.00

Incremental Cash
Flows

$8,408.01

$9,478.31

$6,625.46

$5,200.00
1500
525

Terminal yr
Salvage
Tax
$8,408.01

$9,478.31
$17,886.33

$6,625.46
$24,511.79

$6,175.00
$36,400.00

Project B

Investment
-$27,500.00

Depreciation
Tax (35%)

Operating Cash
Flows
Cumulative
PBP in years
NPV
IRR
PI
K

-$27,500.00
3.44
$9,283.37
16.8939%
1.338
6.54%

NPV Profile for Projects A & B

$20,000

$18,200
$18,000
$16,900
$16,000

$16,623
$15,505 $15,131
$14,191

$14,000
$12,000
NPV ($)

$13,719
$12,952

$12,381

$11,782

$11,112
$10,677

$10,000

$9,908
$9,632

$9,283
$9,091

$8,765
$8,643

$8,000

$7,706
$7,678

$6,819
$6,644

$6,000
$4,000
$2,000
$0
0%

1%

2%

3%

4%

5%

6%

7%

7%

Annual discount Rate (%)

Although the IRR is

at maximizes
sions.
would still be the best

Project A

Project B

8%

9%

End of Year (in $s)

4
5
$8,000.00
$8,000.00
$2,037.75
0
5962.25
8000
2086.79
2800
3875.46
5200
2037.75
0
$5,913.21

$5,200.00

6
$8,000.00
0
8000
2800
5200
0

7
$7,000.00
0
7000
2450
4550
0

$5,200.00

$4,550.00
$4,550.00
500
175

$5,913.21
$5,200.00
$5,200.00
$4,875.00
$30,425.00 $35,625.00 $40,825.00 $45,700.00

sA&B

3
1

$8,765
$8,643

7%

ate (%)

ct B

$7,706
$7,678

8%

$6,819
$6,644

9%

$5,977

$0
10%

$5,177

11%

$4,418

12%

$0
19%