Question

                
IPG Photonics Corporation                          
CONSOLIDATED BALANCE SHEETS                          
amounts in thousands, except share and per share data                          
   "December 31,
2017"       "December 31,
2016"           Increase (Decrease)  
                          
ASSETS   Amount   Percent   Amount   Percent       Amount   Percent
Current Assets:                          
Cash and cash equivalents   $909,900        $623,855    34.9%          
Short-term investments   206,257        206,779    11.6%          
Accounts receivable, net   237,278        155,901    8.7%          
Inventories   307,712        239,010    13.4%          
Prepaid income taxes   44,944        34,128    1.9%          
Prepaid expenses and other current assets   47,919        41,289    2.3%          
Total Current Assets   1,754,010    74.1%   1,300,962    72.7%       453,048    34.8%
Long-Term Assets:                          
Deferred income taxes, net   26,976    1.1%   42,442    2.4%       (15,466)   (36.4%)
Goodwill   55,831    2.4%   19,828    1.1%       36,003    181.6%
Intangible assets, net   51,223    2.2%   28,789    1.6%       22,434    77.9%
Property, plant and equipment, net   460,206    19.4%   379,375    21.2%       80,831    21.3%
Other assets   19,009    0.8%   18,603    1.0%       406    2.2%
TOTAL ASSETS   $2,367,255    100.0%   $1,789,999    100.0%       $577,256    32.2%
LIABILITIES AND STOCKHOLDERS’ EQUITY                          
Current Liabilities                          
Current portion of long-term debt   3,604    0.2%   3,188    0.2%       416    13.0%
Accounts payable   35,109    1.5%   28,048    1.6%       7,061    25.2%
Accrued expenses and other liabilities   144,417    6.1%   102,485    5.7%       41,932    40.9%
Income taxes payable   15,773    0.7%   24,554    1.4%       (8,781)   (35.8%)
Total Current Liabilities   198,903    8.4%   158,275    8.8%       40,628    25.7%
"Deferred income taxes and other Long-Term
      Liabilities"   100,652    4.3%   36,365    2.0%       64,287    176.8%
Long-Term Debt, net of current portion   45,378    1.9%   37,635    2.1%       7,743    20.6%
Total Liabilities   344,933    14.6%   232,275    13.0%       112,658    48.5%
STOCKHOLDERS’ EQUITY                          
Common stock, $0.0001 par value; 175,000,000 shares authorized; 54,007,708 shares issued and 53,629,439 shares outstanding at December 31, 2017; 53,354,579 shares issued and 53,251,805 shares outstanding at December 31, 2016   5    0.0%   5    0.0%       -     0.0%
Additional paid-in capital   704,727    29.8%   650,974    36.4%       53,753    8.3%
Retained earnings   1,443,867    61.0%   1,094,108    61.1%       349,759    32.0%
Treasury stock, at cost (378,269 shares at 12/31/17 and 102,774 shares at 12/31/2016)   (48,933)   (2.1%)   (8,946)   (0.5%)       (39,987)   447.0%
Accumulated other comprehensive loss   (77,344)   (3.3%)   (178,583)   (10.0%)       101,239    (56.7%)
Noncontrolling interests   -    0.0%   166    0.0%       (166)   N/A
Total Stockholders’ Equity   2,022,322    85.4%   1,557,724    87.0%       464,598    29.8%
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY   $2,367,255    100.0%   $1,789,999    100.0%       $577,256    32.2%

IPG Photonics Corporation
CONSOLIDATED STATEMENTS OF INCOME
amounts in thousands, except per share data
	For the Year Ended					Increase (Decrease)
	December 31, 2017		December 31, 2016
	Amount	Percent	Amount	Percent		Amount	Percent
NET SALES	$1,408,889	100.0%	$ 1,006,173	100.0%		$ 402,716	40.0%
Cost of Sales	611,978	43.4%	453,933	45.1%		158,045	34.8%
GROSS PROFIT	796,911		552,240	54.9%		244,671	44.3%
Operating Expenses:
Sales and marketing	49,801	3.5%	38,393	3.8%		11,408	29.7%
Research and development	100,870	7.2%	78,552	7.8%		22,318	28.4%
General and administrative	80,668	5.7%	66,486	6.6%		14,182	21.3%
Loss (gain) on foreign exchange	14,460	1.0%	4,496	0.4%		9,964	221.6%
Total Operating Expenses	245,799	17.4%	187,927	18.7%		57,872	30.8%
OPERATING INCOME	551,112		364,313	36.2%		186,799	51.3%
OTHER INCOME (EXPENSE), Net:
Interest income (expense), net	737	0.1%	1,304	0.1%		(567)	(43.5%)
Other income (expense), net	22	0.0%	948	0.1%		(926)	(97.7%)
Total Other Income (Expense)	759	0.1%	2,252	0.2%		(1,493)	(66.3%)
INCOME BEFORE PROVISION FOR       INCOME TAXES	551,871	39.2%	366,565	36.4%		185,306	50.6%
Provision for Income Taxes	204,283	14.5%	105,849	10.5%		98,434	93.0%
NET INCOME	$    347,588	24.7%	$    260,716	25.9%		$    86,872	33.3%
Weighted Average Common Shares Outstanding	53,495		53,068
BASIC EARNINGS PER SHARE	$6.50		$4.91

SEE THE INSTRUCTIONS IN THE CANVAS MODULE BEFORE BEGINNING THIS ASSIGNMENT.

Use the information you calculated in the yellow cells of the "IPG Photonics Horizontal and Vertical Analysis" file (available in the Canvas module). Remember, there are two sheets (the Balance Sheet and the Income Statement) in that file. Enter the answers below and Check your Work. After getting all correct answers, make any necessary corrections in the Excel file, then use that file to help you complete the Analysis Questions in the Canvas module.

For the vertical analysis answers, write your answers with one decimal place, and do not type the % sign.

For IPG Photonics year ended December 31, 2017:

Cash and cash equivalents as a percent of Total Assets %

Short-term investments as a percent of Total Assets %

Accounts receivable, net as a percent of Total Assets %

Inventories as a percent of Total Assets %

Prepaid income taxes as a percent of Total Assets %

Prepaid expenses and other current assets as a percent of Total Assets %

Gross Profit as a percent of Net Sales %

Operating Income as a percent of Net Sales %

For the horizontal analysis answers, write the dollar amounts with no decimal places.

Include all the zeros in the answers. Remember, the amounts in the financial statements are all in thousands, so the amount of increase or decrease is also in thousands of dollars. Do not type commas in the numbers.

Write the percents with one decimal place. Do not type the percent sign.

For both the dollars and percents, use a minus sign before the number if there is a decrease.

Amount of increase (decrease) in Cash and cash equivalents from Dec. 31, 2016 to Dec. 31, 2017 $

Percent of increase (decrease) in Cash and cash equivalents from Dec. 31, 2016 to Dec. 31, 2017 %

Amount of increase (decrease) in Short-term investment from Dec. 31, 2016 to Dec. 31, 2017 $

Percent of increase (decrease) in Short-term investments from Dec. 31, 2016 to Dec. 31, 2017 %

Amount of increase (decrease) in Accounts receivable, net from Dec. 31, 2016 to Dec. 31, 2017 $

Percent of increase (decrease) in Accounts receivable, net from Dec. 31, 2016 to Dec. 31, 2017 %

Amount of increase (decrease) in Inventories from Dec. 31, 2016 to Dec. 31, 2017 $

Percent of increase (decrease) in Inventories from Dec. 31, 2016 to Dec. 31, 2017 %

Amount of increase (decrease) in Prepaid income taxes from Dec. 31, 2016 to Dec. 31, 2017 $

Percent of increase (decrease) in Prepaid income taxes from Dec. 31, 2016 to Dec. 31, 2017 %

Amount of increase (decrease) in Prepaid expenses and other current assets from Dec. 31, 2016 to Dec. 31, 2017 $

Percent of increase (decrease) in Prepaid expenses and other current assets from Dec. 31, 2016 to Dec. 31, 2017 %

Answer 1

For IPG Photonics year ended December 31, 2017

Cash and cash equivalents as a percent of total assets = 909,900

2,367,255

= 38.4

Short term investments as a percent of total assets = 206,257

2,367,255

= 8.7

Accounts receivable as a percent of total assets = 237,278

2,367,255

= 10

Inventories as a percent of total assets = 307,712

2,367,255

= 13

Prepaid income tax as a percent of total assets = 44,944

2,367,255

= 1.9

Prepaid expenses and other current assets as a percent of total assets = 47,919

2,367,255

= 2

Gross profit as a percent of net sales = 796,911

1,408,889

= 56.6

Operating income as a percent of net sales = 551,112

1,408,889

= 39.1

Amount of increase in cash and cash equivalents from Dec. 31,2016 to Dec. 31,2017 = 909900000 - 623855000

= $286045000

Percent of increase in cash and cash equivalents from Dec. 31,2016 to Dec. 31,2017 = 286045000

623855000

= 45.8

Amount of decrease in short term investments from Dec. 31,2016 to Dec. 31,2017 = 206257000 -206779000

= - $522000

Percent of decrease in short term investments from Dec. 31,2016 to Dec. 31,2017 = - 522000

206779000

= 0.2

Amount of increase in accounts receivable, net from Dec. 31,2016 to Dec. 31,2017 =237278000 - 155901000

= $81377000

Percent of increase in accounts receivable, net from Dec. 31,2016 to Dec. 31,2017 =81377000

    155901000

= 52.1

Amount of increase in inventories from Dec. 31,2016 to Dec. 31,2017 = 307712000 - 239010000

= $68702000

Percent of increase in inventories from Dec. 31,2016 to Dec. 31,2017 = 68702000

239010000

= 28.7

Amount of increase in prepaid income tax from Dec. 31,2016 to Dec. 31,2017 = 44944000 - 34128000

= $10816000

Percent of increase in prepaid income tax from Dec. 31,2016 to Dec. 31,2017 = 10816000

34128000

= 31.7

Amount of increase in prepaid expenses and other current assets from Dec. 31,2016 to Dec. 31,2017 = 47919000 - 41289000

= $6630000

Percent of increase in prepaid expenses and other current assets from Dec. 31,2016 to Dec. 31,2017 = 6630000

41289000

= 16