In: Accounting
Exhibit 1: Table compares changes in key financial KPIs between 2008 and 2009, as follows:
Exhibit 1: Select Income Statement and Balance Sheet Values ($MM) | ||
Income Statement Accounts | 2008 | 2009 |
Net sales | 65.0 | 86.3 |
Expenses | ||
Cost of goods sold | 29.0 | 38.9 |
Sales, general and administrative | 10.1 | 14.0 |
Research and development | 13.5 | 17.0 |
Depreciation | 2.9 | 3.1 |
Other expenses | 0.6 | 1.0 |
Operating expenses | 56.1 | 74.0 |
Interest expense | 2.4 | 3.0 |
Taxes | 2.0 | 2.9 |
Net earnings | 4.5 | 6.5 |
Balance Sheet Accounts | 2008 | 2009 |
Assets | ||
Cash | 3.2 | 3.4 |
Receivables | 3.0 | 4.0 |
Inventory | 4.9 | 8.7 |
Prepaid expenses | 4.8 | 6.1 |
Current assets | 15.9 | 22.2 |
Plant property and equipment | 28.5 | 32.9 |
Other long term assets | 2.7 | 4.3 |
Total long term assets | 31.2 | 37.2 |
Total assets | 47.1 | 59.4 |
Liabilities & Equity | ||
Short term debt | 2.7 | 3.2 |
Accounts payable | 2.3 | 3.0 |
Accrued liabilities | 0.4 | 0.5 |
Current liabilities | 5.4 | 6.7 |
Long term debt | 17.2 | 21.7 |
Owners equity | 24.5 | 31.0 |
Total capitalization | 41.7 | 52.7 |
Total liabilities & equity | 47.1 | 59.4 |
Months of inventory | 2.028 | 2.690 |
Cost of goods sold / sales | 0.446 | 0.451 |
Long term debt / total capital | 0.412 | 0.412 |
Data gathered from table used to answer problem below:
1) Inventory growth rate = COGS/average inventory= 38.9/6.8= 5.72
average inventory = opening inventory + Closing inventory/2 = 4.9+8.7/2 = 6.8
2) Sales growth = CY sales - Py sales/py sales *100 = 38.9 - 29/29 * 100 = 34.1%
3) Net Working capital = Current liabilties - current assets = 6.7 - 22.2 = (15.5)
4) Days working capital = Avg working capital/sales revenue * 365 = 15.5/86.3*365 = 65.5 days
5) DIO= average inventory/COGS*365 = 6.8/38.9*365= 63.8 days
6) DSO= avg account recievable/sales*365 = 14.8 days
7) DPO= avg account payable/cogs * 365 = 2.075/38.9 * 365 = 19.4 days
8) CCC = DSO+DIO-DPO= 14.8+63.8-19.4= 59.2
Using the supporting data, provide an analysis of the current situation at SG. Identify the key symptoms and provide clear problem statements to identify the root causes that result in the symptoms and poor performance. Please use the course strategic framework tools, concepts, and Operations Rules for your analysis.
This Ratio Includes ,
Thus, the overall comapny is doing better and growing if company want analyse more its efficency it can compare its ratio with other company in the same industry.