Mr.Green decided to start with the 6-year summary of HH\'s balance sheet and inc
ID: 2696275 • Letter: M
Question
Mr.Green decided to start with the 6-year summary of HH's balance sheet and income statement(Table 17-14).Then he turened to examine in more detail the latest position (Table !7-15 and 17-16).What apper to be the problem area in HH? Do the financial ratios suggest questions that Ms.Plant and Mr.Green need to address?
Table 17-14 2006 2005 2004 2003 2002 2001
Financial Highllghts for the hoddy Horse company Inc year ending March Net sales 3,351 3,314 2,845 2,796 2,493 2,160
EBIT -9 312 256 243 212 156
Interest 37 63 65 58 48 46
Taxes 3 60 46 43 39 34
Net Profit -49 189 145 142 125 76
Earings per Share -0.15 0.55 0.44 0.42 0.37 0.25
Current assets 669 469 491 435 392 423
Net Fixed assets 923 780 753 680 610 536
Total assets 1,592 1,249 1,244 1,115 1,002 959
Current laibilities 680 365 348 302 276 320
Long-term Laibilities 236 159 297 311 319 315
Stock holders' eguity 676 725 599 502 407 324
Number of stores 240 221 211 184 170 157
Employees 13057 11835 9810 9790 9075 7825
Table 17-15 Income Statement for the HOBBY HORSE COMPANY INC.,
For the Year Ending March 31,2006 (all items in millions of dollars)
Net sales
3,351
Cost Of Goods sold
1,990
Selling,general and administrative expenses
1,211
Depreciation expences
159
Earnings before interest and taxes(EBIT)
-9
Net Intrest Expences
37
Taxable income
-46
Income taxes
3
Net Income
-49
Allocation of Net income
Addition to retained earnings
-49
Dividends
0
Table !7-16 Consolidated Balance Sheet For The HOBBY HORSE COMPANY, Inc
(Figures are in million dollars)
Assets Mar 31,2006 Mar 31,2005
Current assets
Cash and marketable securities
14
72
Recevibles
176
194
inventaries
476
203
Total current asstes
669
469
Fixed assets
Property, plant and equipment(net of Depreciation) 1,077
910
Less accumulated depriciation
154
130
Net fixed asstes
923
780
1,592
1,249
Liabilities and Shareholders Equity Mar 31,2006 Mar 31,2005
Currents liabilities
Debt Due for repayment
484
222
Accounts payable
94
58
otther current Liabilities
102
85
Total current laibilities
680
365
long-term debt
236
159
Stockholder' equity
common stock and other paid in capital
155
155
retained earnings
521
570
Total stockholders equity
676
725
Total Liabilities and stockholders' equity
1,592
1,249 Mr.Green decided to start with the 6-year summary of HH's balance sheet and income statement(Table 17-14).Then he turened to examine in more detail the latest position (Table !7-15 and 17-16).
What apper to be the problem area in HH? Do the financial ratios suggest questions that Ms.Plant and Mr.Green need to address?
Table 17-14 2006 2005 2004 2003 2002 2001
Financial Highllghts for the hoddy Horse company Inc year ending March Net sales 3,351 3,314 2,845 2,796 2,493 2,160
EBIT -9 312 256 243 212 156
Interest 37 63 65 58 48 46
Taxes 3 60 46 43 39 34
Net Profit -49 189 145 142 125 76
Earings per Share -0.15 0.55 0.44 0.42 0.37 0.25
Current assets 669 469 491 435 392 423
Net Fixed assets 923 780 753 680 610 536
Total assets 1,592 1,249 1,244 1,115 1,002 959
Current laibilities 680 365 348 302 276 320
Long-term Laibilities 236 159 297 311 319 315
Stock holders' eguity 676 725 599 502 407 324
Number of stores 240 221 211 184 170 157
Employees 13057 11835 9810 9790 9075 7825
Table 17-15 Income Statement for the HOBBY HORSE COMPANY INC.,
For the Year Ending March 31,2006 (all items in millions of dollars)
Net sales
3,351
Cost Of Goods sold
1,990
Selling,general and administrative expenses
1,211
Depreciation expences
159
Earnings before interest and taxes(EBIT)
-9
Net Intrest Expences
37
Taxable income
-46
Income taxes
3
Net Income
-49
Allocation of Net income
Addition to retained earnings
-49
Dividends
0
Table !7-16 Consolidated Balance Sheet For The HOBBY HORSE COMPANY, Inc
(Figures are in million dollars)
Assets Mar 31,2006 Mar 31,2005
Current assets
Cash and marketable securities
14
72
Recevibles
176
194
inventaries
476
203
Total current asstes
669
469
Fixed assets
Property, plant and equipment(net of Depreciation) 1,077
910
Less accumulated depriciation
154
130
Net fixed asstes
923
780
1,592
1,249
Liabilities and Shareholders Equity Mar 31,2006 Mar 31,2005
Currents liabilities
Debt Due for repayment
484
222
Accounts payable
94
58
otther current Liabilities
102
85
Total current laibilities
680
365
long-term debt
236
159
Stockholder' equity
common stock and other paid in capital
155
155
retained earnings
521
570
Total stockholders equity
676
725
Total Liabilities and stockholders' equity
1,592
1,249
Explanation / Answer
Net sales Increasing EBIT Uneven Net Profit Uneven Assets Trend Current assets Cash and marketable securities -58 Recevibles -18 inventaries 273 Total current asstes 200 Fixed assets Property, plant and equipment(net of Depreciation) 167 Less accumulated depriciation 24 Net fixed asstes 143 343 Liabilities and Shareholders Equity Currents liabilities Debt Due for repayment 262 Accounts payable 36 otther current Liabilities 17 Total current laibilities 315 long-term debt 77 Stockholder' equity common stock and other paid in capital 0 retained earnings -49 Total stockholders equity Total Liabilities and stockholders' equity 343 Please consider the time devoted to make this reply by rating this as 5 star. Thank u in advance. God bless u :)
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