21 Jun cenario: The Team Assignment requires an
cenario: The Team Assignment requires an analysis of specific financial data of Bob Smith Inc….
Scenario: The Team Assignment requires an analysis of specific financial data of Bob Smith Inc. Bob is an existing bank customer. When the loan to Bob was originally made in 2016 the bank required Bob to increase the YE 2016 cash balance to at least $70,000 by YE 2017 to qualify for the interest rate that the bank used for the original loan. These cash balances were required for the bank to make its target yield on the loan created. The Cash Flow Statement and Balance Sheet show an actual YE 2017 cash balance of less than $34,000.
Needed for Cash Flow Statement
Net Income $3,155,848
Depreciation 212,366
Dividends Paid 2,966,412
Tax 225,700
| Net Income = $3,155,848 | |||
| Assets |
2017 |
2016 |
Difference |
| Cash |
$34,000 |
$34,000 |
|
| AR |
$260,205 |
$318,768 |
($58,563) |
| Inventory |
$423,819 |
$352,740 |
$71,079 |
| Other current assets |
$41,251 |
$29,912 |
$11,339 |
| Total current Assets |
$758,686 |
$717,986 |
$40,700 |
| Less: Accumulated depreciation |
$212,366 |
||
| Deferred taxes |
$225,700 |
||
| Plant Property and Equipment |
$1,512,675 |
$1,403,220 |
$109,455 |
| Goodwill and other assets |
$382,145 |
$412,565 |
($30,420) |
| Total Assets |
$2,653,506 |
$2,533,771 |
$119,735 |
| Liabilities and Stockholder Equity | Difference | ||
| AP |
$378,236 |
$332,004 |
$46,232 |
| Wages payable |
$14,487 |
$7,862 |
$6,625 |
| Accrued income taxes |
$21,125 |
$16,815 |
$4,310 |
| Dividends paid |
$2,966,412 |
||
| total current liabilities |
$413,848 |
$356,681 |
$57,167 |
| Long Term Debt |
$679,981 |
$793,515 |
($113,534) |
| Total Liabilities |
$1,093,829 |
$1,150,196 |
($56,367) |
| Total Common Equity |
$1,559,677 |
$1,383,575 |
$176,102 |
| Total liabilities and stockholder equity |
$2,653,506 |
$2,533,771 |
$119,735 |
| Net Cash flow for operating expenses = |
$3,634,255 |
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