Alpha Milk Corp is considering taking over their competitor, Dana Dairy Products, and asked your consultancy firm to perform financial statement analysis to assess feasibility of this strategic initiative. You are given the following key financial ratios, the firm’s income statement and the balance sheet. You can assume that there are 365 days in a year. a) Using the information provided for 31 Dec 2005, calculate the following: net working capital, current ratio, quick ratio
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Alpha Milk Corp is considering taking over their competitor, Dana Dairy Products, and asked your consultancy firm to perform financial statement analysis to assess feasibility of this strategic initiative. You are given the following key financial ratios, the firm’s income statement and the balance sheet. You can assume that there are 365 days in a year.
a) Using the information provided for 31 Dec 2005, calculate the following: net working capital, current ratio, quick ratio, inventory turnover, average collection period, total debt ratio, gross profit margin, net profit margin,
b) Evaluate the company’s performance against industry average ratios and compare with last year’s results.
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- Financial information for BDS Enterprises for the year-ended December 31, 20xx, was gathered from an accounting intern, who has asked for your guidance on how to prepare an income statement format that will be distributed to management. Subtotals and totals are included in the information, but you will need to calculate the values. A. In the correct format, prepare the income statement using the following information: B. Calculate the profit margin, return on investment, and residual income. Assume an investment base of $100,000 and 6% cost of capital. C. Prepare a short response to accompany the income statement that explains why uncontrollable costs are included in the income statement.The income statement comparison for Rush Delivery Company shows the income statement for the current and prior year. A. Determine the operating income (loss) (dollars) for each year. B. Determine the operating income (percentage) for each year. C. The company made a strategic decision to invest in additional assets in the current year. These amounts are provided. Using the total assets amounts as the investment base, calculate the ROI. Was the decision to invest additional assets in the company successful? Explain. D. Assuming an 8% cost of capital, calculate the RI for each year. Explain how this compares to your findings in part C.Required information Annie's Homemade Ice Cream provided the following data for this year: Sales Net operating income Average operating assets Required: Consider each question below Independently. Carry out all computations to two decimal places. $ 300,000 $ 54,000 $ 187,500 1. Compute the company's margin, turnover, and return on Investment (ROI) for this year. 2. The company is considering buying some billboard advertising with the expectation it would grow next year's sales and net operating Income by $50,000 and $20,000, respectively. If this plan is Implemented, what would become next year's margin, turnover, and ROI? 3. The company is considering buying a second cargo trailer and mobile cold plate push cart to expand its mobile sales. If the company Implements this plan, It expects next year's sales, net operating Income and average operating assets to Increase by $80,000, $30,000, and $10,000, respectively. What would become next year's margin, turnover, and ROI? Complete this…
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