FINANCIAL ANALYSIS LAB

LAB 9: ANALYZING FINANCIAL STATEMENTS

1. Horizontal, Vertical and Ratio Analysis of Income Statement and Balance Sheet of ABC ltd.

Comparative Income Statement of ABC Ltd. for the years ended December 31, 2015 and 2014
2015 2014
($, thousand) ($, thousand)
Total Operating Revenues 2575 2050
Less: COGS 1150 985
Gross Profits 1425 1065
Less: Operating Expenses
Selling Expenses 275 250
General & Administrative Expenses 225 205
Depreciation Expense 100 95
Fixed Expenses 75 75
Total Operating Expenses 675 625
Net Operating Income 750 440
Other Income 20 15
Earnings before interest and taxes (EBIT) 770 455
Less: Interest Expense
Interest on Short-Term Notes 10 10
Interest on Long-term Borrowings 50 55
Total Interest Expense 60 65
Earnings before taxes (EBT) 710 390
Less: Taxes
Current Taxes 160 156
Deferred Taxes 124 0
Total Taxes 284 156
EAT 426 234
Less: Preferred Stock Dividends 95 95
Net earnings Available for common stockholders 331 139
Earnings per share (EPS), 100000 shares outstanding 3.31 1.39
Retained Earnings 220 50
Dividends paid to holders of common stock 111 89
 Comparative Balance Sheet of ABC Ltd. as on December 31, 2015 and 2014
2015 2014
($, thousand) ($, thousand)
Liabilities and Stockholder's Equity
Preferred Stock 200 200
Common Stock 1000 1000
Paid-in Capital 1985 1985
Retained Earnings 360 140
Total Stockholder's Equity 3545 3325
Liabilities
Current Liabilities
Accounts Payable 300 295
Short-Term Notes Payable 1275 965
Accruals & Other Current Liabilities 145 295
Total Current Liabilities 1720 1555
Long-Term Debt 1900 1,755
Total Liabilities 3620 3,310
Total Liabilities and Stockholder's Equity 7165 6,635
Assets
Current Assets
Cash 1565 990
Accounts Receivable 565 605
Inventories 895 1,215.00
Other 215 180
Total Current Assets 3240 2990
Fixed Assets
Land and Buildings 2400 2400
Machinery and Equipment 1880 1575
Furniture & Fixtures 435 390
Vehicles 140 115
Less: Depreciation 1005 905
Net Fixed Assets 3850 3575
Other 75 70
Total Fixed Assets 3925 3645
Total Assets 7165 6635