Historical Analysis of the Financial Statements of Sunlight Ltd (in $ million)

Balance Sheet

Recent year

One year
ago

Two year
ago

Three years
ago

$val
ue

$
valu
e

$
Value

$
valu
e

% of
total

% of
total

% of
total

Assets
Cash

1.5

2.1

2.7

2.2

Accounts Receivables

8.3

7.4

6.2

4.1

Inventories

5.2

4.5

3.4

2.3

Total Current assets

15.0

14.0

12.3

8.6

Fixed assets Gross

19.4

20.2

21.5

22.4

Less: Accumulated
Depreciation

10.1

9.2

8.0

5.1

Fixed Assets, net

9.3

11.0

13.5

17.3

Other assets

3.7

4.0

4.2

6.1

Total assets

28.0

29.0

30.0

32.0

Accounts payable

1.3

1.2

0.8

1.0

Notes payable

3.9

3.4

3.2

2.7

Taxes payable

0.1

0.2

0.1

0.8

Total current Liabilities

5.3

4.8

4.1

4.5

Long Term Debt

12.2

13.2

12.5

11.4

Other Liabilities

0.0

0.4

3.5

6.1

Total Liabilities

17.5

18.4

20.1

22.0

Common Stock

1.0

1.0

1.0

1.0

Paid-in-surplus

3.0

3.0

3.0

3.0

Retained Earnings

6.5

6.6

5.9

6.0

Total Networth

10.5

10.6

9.9

10.0

Liabilities
+Shareholders
Equity

28.0

29.0

30.0

32.0

Liabilities & Equity

%of
total

Sunlight LTd Income Statement(in $ millions)

Recent year

Previous Year

Two years

Three years
ago

Income Statement
Items

$
Valu
e

$
valu
e

$
valu
e

$
valu
e

Net sales

32.0

30.0

28.0

31.0

Less COGS

18.0

16.0

15.0

14.0

Gross profit

14.0

14.0

13.0

17.0

Less SG&A

9.0

9.0

8.0

11.0

Less: Depreciation

3.0

3.0

3.0

2.0

Net Operating
Income(EBIT)

2.0

2.0

2.0

4.0

Less Interest
Expense

2.0

1.0

2.0

2.0

Net Income Before

Taxes

0.0

1.0

0.0

2.0

Less Income taxes

0.1

0.3

0.1

0.2

Net Income after

taxes

(0.1)

0.7

(0.1)

1.8

% of
Total

Comment on the following

1. Control over expenses

Depreciation
)
Net sales

A.

B.

Interest Expense on Borrowed Funds

Net Sales

C. *COGS/Net Sales
D. *SG&A/Net sales
E. Taxes/Net sales

% of
total

% of
total

% of
total

2. Operating Efficiency
A. *Inventory Turnover Ratio=

COGS
Average Inventory

B. *Average Collection Period=

Recievables
{ Account
} x {365 }
Annual Sales

C. *Turnover of Fixed Assets= Net Sales/Net Fixed Assets

3. Marketability of Product line
A. *Gross profit Margin(GPM)=

Net sale sCOGS

Net sales

B. *Net Profit margin(NPM)=Net income After taxes/Net Sales

4. Coverage Ratios

EBIT

A. *Interest Coverage ratio= Interest payments

5. Liquidity Ratios
A. *Current Ratio=(Current Assets)/(current liabilities)
B. *Acid-Test Ratio=(Current assets-Inventory)/Current liabilities)
C. *Net working capital= Current assets-Current Liabilties
6. Profitability Indicators
A. *ROA=Profit after tax/Total assets
B. *ROE=Profit after tax/Networth
C. *Profit Margin=Profit after tax/Total sales
7. Financial leverage
A. *Leverage ratio= Total Liabilties/Total assets
B. *Capitalization Ratio=Long-term debt/(Networth+Long-term Liabilities)
Projections or Pro-forma Statements:
i.

ii.
iii.
iv.
v.
vi.

Sunlights Net Sales are projected to increase to 10 percent, resulting in a

positive net income of $100,000.Sunlights assets are expected to climb to
$31.8 million from $28million.The cash account will be $ 3.5 million.
Receivables and inventory will be down by $0.4 million each.
Sunlight will purchase $4 million in new fixed assets, and its net Fixed assets
will expand by $1 million.. Depreciation of $3million. Miscellaneous assets of
$1.6 million will be added. Long-term Debt of $200,000 will be paid off.
Accounts payable will be increased by $0.1 million and notes payable will
increase by $1.1 million from existing lender. OtherLiabililities will increase by
$ 2.3 Million. Taxes payable will increase by $0.4 million
The firm is also expects a new lender to grant $5 million notes credit line
with which it will pay of its outstanding of $3.9 million and add to its assets
by $1.1 million.
Pls prepare the projected Balance sheet
Pls prepare the projected cash flows (operating, investing and financing cash
flows).