1-34
FINANCIAL STATEMENT ANALYSIS
We will discuss each of these groups of ratios and the formulas used
to calculate them. Refer to XYZ Corporation's Balance Sheet and
Income Statement as we calculate each ratio.
XYZ Corporation
December 31, 1993 (In Millions $)
ASSETS
LIABILITIES AND EQUITY
Cash
5.7
Accounts Payable
22.7
Marketable Securities
6.3
Notes Payable
31.5
Accounts Receivable
50.9
Accrued Wages and Taxes
2.3
Inventories
88.7
Other Current Liabilities
4.9
Prepaid Expenses
1.1
Total Current Liabilities
61.4
Other Current Assets
0.3
Total Current Assets
153.0
Long-term Debt
107.4
Preferred Stock
12.3
Gross Fixed Assets
158.8
Total Long-term Liabilities
181.1
Less Depreciation
24.9
Net Fixed Assets
133.9
Common Stock (8 Mil. Outst.)
10.4
Retained Earnings
95.4
Total Common Equity
105.8
Total Assets
286.9
Total Liabilities and Equity
286.9
Figure 1.6: Balance Sheet
XYZ Corporation
December 31, 1993 (In Millions $)
Net Sales
287.6
Cost and Expenses:
Labor and Materials
Depreciation
Selling Expenses
General and Administrative
Lease Payments
249.3
8.9
1.6
3.2
2.1
Total Operating Costs
265.1
Net Operating Income (EBIT)
Interest Expenses
Earnings Before Taxes
Taxes (at 40%)
Net Income Before Preferred Dividend
Preferred Dividend
22.5
6.0
16.5
6.6
9.9
3.7
Net Income to Common
Common Dividend
6.2
4.0
Earnings Retained
2.2
Figure 1.7: Income Statement