You have been appointed as a Senior Financial Analyst for a multi-national manufacturing concern. Your appointment was being discussed for so long among board members as majority of them believed that this position is not really required as they already have a team of 4 qualified financial analysts.
Only CFO was convinced to have you onboard and primarily he is impressed by your previous experiences of writing financial performance reports. He also wants you to lead current team of financial analysts.
In your first meeting with CFO, you have been provided with most recent Financial Statements you have been given an assignment to prepare a report on profitability, liquidity, and capital structure of the company. CFO also needs your advice if company should go for debt financing for $2.5M. Below is the extract From Financial Statements that is made by one of your teammates.
|
Income Statement |
|
|||||
|
|
|
|
2018 |
|
2019 |
|
|
Sales |
9974 |
|
9471 |
|
||
|
cost of goods sold |
5035 |
|
3845 |
|
||
|
|
|
|||||
|
Gross Profit |
4939 |
|
5626 |
|
||
|
|
|
|||||
|
Operating Expanses |
|
|||||
|
|
|
|||||
|
Salaries expanse |
1654 |
594 |
|
|||
|
Rent Expanse |
547 |
1738 |
|
|||
|
Utility Expanses |
858 |
545 |
|
|||
|
Depreciation Expanse |
1159 |
1359 |
|
|||
|
|
|
|||||
|
Operating Profit |
721 |
|
1390 |
|
||
|
|
|
|||||
|
Interest Expanse |
300 |
900 |
|
|||
|
|
|
|||||
|
PBIT |
421 |
490 |
|
|||
|
|
|
|
||||
|
TAX @20% |
84.2 |
98 |
|
|||
|
|
|
|||||
|
PAT |
336.8 |
|
392 |
|
||
|
|
|
|
|
|
|
|
|
Statement of Financial Position |
||
|
|
2018 |
2019 |
|
Cash and Cash Equivalents |
432 |
635 |
|
Receivables |
344 |
348 |
|
Inventory |
305 |
598 |
|
Prepaid Assets |
111 |
731 |
|
|
|
|
|
Non-Current Assets (Fair value) |
750 |
950 |
|
|
|
|
|
Total Assets |
1942 |
3262 |
|
|
|
|
|
Current Liabilities |
1050 |
1560 |
|
Non-Current Liabilities |
500 |
550 |
|
|
|
|
|
Equity |
392 |
1152 |
|
|
|
|
|
|
|
|
|
Total Equity and Liabilities |
1942 |
3262 |
All figures are rounded to $000.
You have been appointed as a Senior Financial Analyst for a multi-national manufacturing concern. Your appointment was being discussed for so long among board members as majority of them believed that this position is not really required as they already have a team of 4 qualified financial analysts.
Only CFO was convinced to have you onboard and primarily he is impressed by your previous experiences of writing financial performance reports. He also wants you to lead current team of financial analysts.
In your first meeting with CFO, you have been provided with most recent Financial Statements you have been given an assignment to prepare a report on profitability, liquidity, and capital structure of the company. CFO also needs your advice if company should go for debt financing for $2.5M. Below is the extract From Financial Statements that is made by one of your team mates.
|
Income Statement |
|
|||||
|
|
|
|
2018 |
|
2019 |
|
|
Sales |
9974 |
|
9471 |
|
||
|
cost of goods sold |
5035 |
|
3845 |
|
||
|
|
|
|||||
|
Gross Profit |
4939 |
|
5626 |
|
||
|
|
|
|||||
|
Operating Expanses |
|
|||||
|
|
|
|||||
|
Salaries expanse |
1654 |
594 |
|
|||
|
Rent Expanse |
547 |
1738 |
|
|||
|
Utility Expanses |
858 |
545 |
|
|||
|
Depreciation Expanse |
1159 |
1359 |
|
|||
|
|
|
|||||
|
Operating Profit |
721 |
|
1390 |
|
||
|
|
|
|||||
|
Interest Expanse |
300 |
900 |
|
|||
|
|
|
|||||
|
PBIT |
421 |
490 |
|
|||
|
|
|
|
||||
|
TAX @20% |
84.2 |
98 |
|
|||
|
|
|
|||||
|
PAT |
336.8 |
|
392 |
|
||
|
|
|
|
|
|
|
|
|
Statement of Financial Position |
||
|
|
2018 |
2019 |
|
Cash and Cash Equivalents |
432 |
635 |
|
Receivables |
344 |
348 |
|
Inventory |
305 |
598 |
|
Prepaid Assets |
111 |
731 |
|
|
|
|
|
Non-Current Assets (Fair value) |
750 |
950 |
|
|
|
|
|
Total Assets |
1942 |
3262 |
|
|
|
|
|
Current Liabilities |
1050 |
1560 |
|
Non-Current Liabilities |
500 |
550 |
|
|
|
|
|
Equity |
392 |
1152 |
|
|
|
|
|
|
|
|
|
Total Equity and Liabilities |
1942 |
3262 |
All figures are rounded to $000.
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