This spreadsheet supports STUDENT analysis of the case “Bob’s Baloney” (UVA-F-1942).

This spreadsheet was prepared by Michael Schill, Sponsors Professor of Business Administration. Copyright © 2020 by the University of Virginia Darden School
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Rev. Feb. 2, 2021

Exhibit 1
Bob’s Baloney
Financial Statements for Bob’s Baloney (in millions of US dollars)

2015 2016 2017 2018 2019

Revenue 190.5 185.6 209.8 248.3 271.8

Cost of Goods Sold 136.9 135.8 156.8 189.3 212.1
Gross Profit 53.6 49.8 53.0 59.0 59.7
Selling and General Expenses 18.8 28.8 38.3 47.5 47.0
Operating Profit 34.8 21.0 14.7 11.5 12.7
Net Interest Expense 0.9 0.5 7.0 6.1 5.6
Pretax Profit 33.9 20.5 7.7 5.4 7.1
Taxes 7.8 5.0 1.9 1.4 1.7
Net Profit 26.1 15.6 5.9 4.0 5.4

Cash and Cash Equivalents 10.5 9.8 10.5 10.4 8.5

Accounts Receivable 10.0 9.7 10.1 13.8 15.0
Inventory 6.7 7.7 8.4 10.9 12.0
Other Current Assets 3.6 3.2 4.6 6.9 7.7
Current Assets 30.8 30.4 33.6 42.0 43.2
Net Property, Plant, and Equipment 92.0 89.9 264.4 275.5 289.0
Other Fixed Assets 47.1 47.6 48.9 46.6 49.7
Total Assets 169.9 167.9 346.9 364.1 381.9

Accounts Payable 12.2 13.4 15.4 14.4 12.3

Wages Payable 12.4 14.4 13.8 13.7 15.0
Other Payables 8.1 7.8 5.6 6.6 8.3
Current Liabilities 32.7 35.6 34.8 34.7 35.6
Debt 29.5 9.1 183.0 196.3 207.8
Shareholders’ Equity 107.7 123.3 129.1 133.1 138.5
Total Liabilities and Shareholders’ Equity 169.9 167.9 346.9 364.1 381.9

Source: Created by author.

Exhibit 2
Bob’s Baloney
Spangler’s Financial Analysis of Bob’s Baloney

2015 2016 2017 2018

Growth and Returns

Revenue Growth [percentage change in revenue] 5.5% -2.6% 13.0% 18.4%
Return on Assets [net profit / total assets] 15.4% 9.3% 1.7% 1.1%
Return on Net Assets [NOPAT / net assets] 19.0% 11.9% 3.5% 2.6%
Return on Equity [net profit / shareholders’ equity] 24.2% 12.6% 4.5% 3.0%

Margins
Gross Margin [gross profit / revenue] 28.1% 26.8% 25.3% 23.8%
SG&A Percentage [SG&A expenditures / revenue] 9.9% 15.5% 18.3% 19.1%
Operating Margin [operating profit / revenue] 18.3% 11.3% 7.0% 4.6%
Net Profit Margin [net profit / revenue] 13.7% 8.4% 2.8% 1.6%

Asset Efficiency
Asset Turnover [revenue / total assets] 1.1 1.1 0.6 0.7
PPE Turnover [revenue / net PP&E] 2.1 2.1 0.8 0.9
NWC Turnover [revenue / net working capital] NA NA NA 34.0
AR Days (DSO) [accounts receivable / revenue × 365] 19.2 19.1 17.6 20.3
Inv Days (DIO) [inventory / COGS × 365] 17.9 20.7 19.6 21.0
AP Days (DPO) [accounts payable / COGS × 365] 32.5 36.0 35.8 27.8

Leverage
Debt / Total Capital [debt / (debt + shareholders’ equity)] 22% 7% 59% 60%

Summary Accounts (in millions of US dollars)

NOPAT (t = 25%) [operating profit × (1 − tax rate)] 26 16 11 9
Net Working Capital [current assets − current liabilities] (2) (5) (1) 7
Net Assets [net working capital + net fixed assets] 137 132 312 329

Note: NOPAT is net operating profit after tax; SG&A is selling, general, and administrative expenses; PP&E is net property, plant, and equipment; NWC is net working capital; AR is
accounts receivable; Inv is inventory; COGS is cost of goods sold; AP is accounts payable; DSO is days sales outstanding; DIO is days inventory outstanding; and DPO is day payables
outstanding.

Source: Created by author.

 2019

9.5%
1.4%
2.8%
3.9%

22.0%
17.3%
4.7%
2.0%

0.7
0.9
35.8
20.1
20.7
21.2

60%

10
8
346

WC is net working capital; AR is

tanding; and DPO is day payables