Corporate Finance: SciTronics COMPONENT PERCENTAGES INCOME STATEMENT (each item is expressed as a percentage of net sales revenue) During the four-year period ended December 31, 2008, SciTronics’ managed to improve its earnings (from 3% to 6%) thanks to a decrease in operating expenses (from 64% to 59%) and constant cost of goods (30%). SALES GROWTH During the four-year period ended December 31, 2008, SciTronics’ sales grew at a 20.69 % compound rate. There were no acquisition or divestitures. PROFITABILITY 1. SciTronics’ profit as a percentage of sales in 2008 was 5.7%. 2. This represented a 168.7% increase from 3.4% in 2005. 3. SciTronics had a total of $75000 of capital at year-end 2008 and earned, before …show more content…
2. At year-end 2008, SciTronics’ total liabilities were 53% of its total assets, which compares with 34% in 2005. 3. The market value of SciTronics’ equity was $175,000,000 at December 31, 2008. The total debt ratio at market was 32%. 4. SciTronics’ earnings before interest and taxes (operating income) were $26000 in 2008 and its interest charges were $2000. Its times interest earned was 13 times. This represented an improvement from the 2005 level of 10 times. 5. SciTronics owed its suppliers $ 6000 at year-end 2008. This represented 8.11 % of cost of goods sold and was a decrease from 11.63% at year-end 2005. The company appears to be more prompt in paying its suppliers in 2008 than it was in 2005. 6. The financial riskiness of SciTronics increased between 2005 and 2008 as demonstrated by its higher debt-to-equity ratio. However this does not seem to pose a problem for the company as it actually managed to improve its margin of protection for creditors (it is now able to generate $13 in income for each $1 of interest, versus a previous 10 times interest earned). LIQUIDITY 1. SciTronics held $133000 of current assets at year-end 2008 and owed $48000 to creditors, due to be paid within one year. SciTronics’ current ratio was 2.77, a decrease from the ratio of 3.90 at year-end 2005. 2. The quick ratio for SciTronics at year-end 2008 was 2.17, a decrease from the ratio of 2.90 at year-end
Additionally, research and development expense incurred in the development of new products or significant improvements to existing products was $5.1 million in 1984. $12.1 million in 1983 and $14.1 million in 1982. This change
Interpretation: 53% of the total assets are financed through debts; the remaining 39% is financed through equity.
ACC/291 March 25,2012 Liquidity Ratios Current Ratio: Current Assets/Current Liabilities 2005 $14,555,092/ $6,974,752= 2.09:1 2004 $14,643,456/ $6,029,696=2.43:1 Acid Test Ratio: Cash+ Short-Term Investments + Receivables (Net)/ Current Liabilities 2005 $305,563 + $283,583 +$6,133,663/ $6,974,752= .96:1 2004 $357,216 + $133,504 + $5,775,104/ $6,029,696=1.04:1 Receivables Turnover: Net Credit Sales/ Average Net Receivables 2005 $50,823,685/ ($6,133,663 + 5,775,104/2) $50,823,685/ $5,954,384= 8.54 times 2004 $46,044,288/($5,775,104+6,569,344/2) $46,044,288/ $6,172,224=7,46 times Inventory Turnover: Cost of Goods Sold/ Average Inventory 2005 $42,037,624/ ($7,850,970+$7,854,112/2) $42,037,624/$7,852,541=5.35 times
1. SciTronics held $133,000 of current assets at year-end 2008 and owed $48,000 to creditors due to be paid within one year. Its current ratio was 2.77 (133000/48000), a decrease from the ratio of 3.90 (82000/21000) at year-end
In the case of Assessing a Company’s Future Financial Health, the case concentration is on SciTronics, a medical device company, performance measures based on the organization’s three primary financial data sources in Exhibit 1 & 2. Utilizing the 9 steps of corporate financial system, I will be able to analyze the financial health of the company to assess whether it will remain balance over the ensuing 3-5 years. The measures are grouped by focusing on “Financial Ratios” such as: 1.) profitability measures, 2) activity measures, and 3) leverage and liquidity measures. Using the financial data sources, I would be able to make recommendations regarding SciTronics 126 million loan request.
From 1976 to 1982 the compound annual growth in net sales was 18.5% and the compound annual growth of after tax profit was 25.9%. Therefore, a 10% net sales growth shown in the proforma financial data seems reasonable.
Increase in current liabilities Substantial increase in current liabilities weakened the company’s liquidity position. Its current liabilities were US$2,063.94 million at the end of FY2010, a 48.09% increase compared to the previous year. However, its current assets recorded a marginal increase of 25.07% - from US$1,770.02 million at the end of FY2009 to US$2,213.72 million at the end of FY2010. Following this, the company’s current ratio declined from 1.27 at the end of the FY2009 to 1.07 at the end of FY2010. A lower current ratio indicates that the company is in a weak financial position, and it may find it difficult to meet its day-to-day obligations.
When compared with the industry, the times interest earned ratio of S&S Air of 6.36 times is between the industry lower quartile of 5.18 times and the median of 8.06
See table 2 Dell 's net income gross (1992 - 1998) - 1750.98%. More than 4 times over HP (436,4%) the second best performing player and twice over Compaq (770%).
years, sales had increased at a 7% compound rate, while earnings, benefiting from substantial cost
This indicates that nearly 62% of the brewery’s assets are currently financed by debt. This is
The current enterprise value is $41,335 million and the equity value is $34,455 million. According to yahoo finance, the shares outstanding of our company are 647.31 million, so we can calculate the stock price for next year is $53.23. It will increase in following years.
4. SciTronics had net fix assets of $18,000 (net fix assets) and sales of $244,000 in 2008. Its fixed asset turnover ratio in 2008 was 13.56 (244,000/18,000), a deterioration from 16.33 (147,000/9,000) in 2005.
(Note: retained earnings information is irrelevant here) Part b. Total market value = debt + pref. equity + Common equity = 1,147,200 + 1,250,000 + 2,500,000 = $4,897,200