Financial analysis project, Financial Management

Financial Analysis Project:

  1. At the beginning of 2009, CanGo purchased the online gaming company. This purchase was for cash, paid for through the proceeds of the IPO and results in goodwill.
  2. 90% of the online book sales comes from JIT, the other 10% through the inventory which CanGo possesses. 100% of the CD/DVD/MP3 come through CanGo inventory. The result is that 80% of ALL sales is JIT and 20% is inventory.
  3. There is one warehouse for shipping of books and one plant for manufacturing.
  4. There are three divisions: a CD/DVD/MP3 division, an online gaming division and a books division. All manufacturing takes place in the CD/DVD/MP3 division.
  5. The IPO took place at the beginning of 2009.
  6. The CD/DVDs were customized beginning in 2008. The MP3 players were built beginning in the start of 2009.
  7. The online gaming company was purchased for $30,000,000 and both Elizabeth and Andrew initiated the process.
  8. The company began in 2006, has a VC infusion in 2007 and 2008. It showed a profit in 2008 and 2009. Its only profitable division is the online book sales division.
  9. It has some type of international operations, hence the need for a "translation gain or loss" in owner's equity.
  10. It has an extraordinary loss from fire and a sale of a segment of its business in 2009.

Balance Sheet

ASSETS

December 31, 2009


Cash

$20,900,000


Marketable Securities

$117,000,000


Accounts Receivable

$33,000,000


Less: Allowance for Bad Debts

$(880,000)


Net Accounts Receivable

$32,120,000





Inventory



Raw Materials

$2,000,000


Work-in-process

$1,000,000


Finished Goods

$5,000,000


Inventory Purchased for Resale

$24,000,000


Total Inventory

$32,000,000





Plant, Property and Equipment

$6,700,000


Less: Accumulated Depreciation

$(320,000)


Net Plant, Property and Equipment

$6,380,000





Prepaid Expenses

$200,000





Goodwill and Other Purchased Intangibles

$28,000,000


Less: Amortization

$(700,000)


Net Goodwill and Other Purchased Intangibles

$27,300,000





Total Assets

$235,900,000



LIABILITIES AND OWNERS' EQUITY

Accounts Payable

$22,000,000


Accrued Advertising

$11,800,000


Other Liabilities and Accrued Expense

$1,400,000


Current Portion of Long-Term Debt

$2,300,000





Long Term Debt

$57,400,000





Preferred Stock, $100 par value per share,



100,000 authorized, 0 shares issued and outstanding

$0





Common Stock, $1 par value per share,



250,000,000 shares authorized, 13,000,000 shares



issued, 12,900,000 outstanding

$13,000,000





Additional Paid-in-Capital in excess of par value, Common Stock

$117,000,000





Treasury Stock

$(1,000,000)





Retained Earnings (less Cash Dividends Paid)

$12,000,000

$11,000,000




Total Liabilities and Owner's Equity

$235,900,000



Income Statement


December 31, 2009

December 31, 2008

Sales Revenues

$51,000,000

$10,300,000

Less: Sales Returns

$(1,000,000)

$(300,000)

Net Sales Revenues

$50,000,000

$10,000,000

Less: Cost of Goods Sold

$(9,000,000)

$(4,000,000)

Gross Profit

$41,000,000

$6,000,000




Operating Expenses:



Advertising and Sales

$(26,000,000)

$(3,000,000)

Depreciation

$(160,000)


Salaries and Wages

$(1,700,000)

$(1,400,000)

Product Development

$(4,000,000)

$(1,200,000)

Merger and Acquisition Related Costs, including



Amortization of Goodwill and Other Intangibles

$(700,000)

$0

Total Operating Expenses

$(32,560,000)





Income from Continuing Operations Before Income Taxes

$8,440,000





Less: Income Taxes at 35%

$(2,954,000)


Income from Continuing Operations

$5,486,000





Discontinued Operations:



Income from Operations of Discontinued Division



(less applicable income taxes)

$350,000


Loss on Disposal of Discontinued Division



(less applicable income taxes)

$(150,000)


Total Gain from Discontinued Operations

$200,000





Extraordinary Items:



Loss from fire (less applicable income taxes)

$(200,000)





Net Income

$5,486,000



Divisional Revenues

Books

$15,000,000

$7,000,000

Online gaming

$25,000,000


Customized MP3/CD/DVD

$10,000,000

$3,000,000

Customized MP3/CD/DVD Inventory at end of 2009

$8,000,000


Posted Date: 2/12/2013 2:00:01 AM | Location : United States







Related Discussions:- Financial analysis project, Assignment Help, Ask Question on Financial analysis project, Get Answer, Expert's Help, Financial analysis project Discussions

Write discussion on Financial analysis project
Your posts are moderated
Related Questions
Q. Explain the benefit plan? Cafeteria Plan - A benefit plan maintained by an employer for benefit of the employees underwhich every participant has the opportunity to select t

Investing Surplus Cash : Cash not required for temporary periods of short durations can be invested in near-cash assets, i.e. marketable securities which are readily convertible in

Chi Square Test as a Test of Independence In real life decision making, managers often have to know whether the differences between the proportions observed from a number of sa

Statement of Cash Flows A formal statement of the cash received and disbursed through an organization. The statement of cash flows is separate into three sections that are inve

Workers interest in participation is also influenced by certain personnel or group characteristics. For example several research studies have shown that both very low and very high

ON THE BASIS OF FUNCTIONS •Functional / Subsidiary budgets: A subsidiary budget is a budget of income or expenditure appropriate to or the responsibility of functions, like

Why is the replacement value of assets method not usually used to value complete businesses? The replacement value of assets process is not often applied to complete business v

Dow Jones Global Index (DJGI) The DJGI aims to cover 95% of market capitalisation at country level. As with FTSE and MSCI, there are the same 23 developed markets, but with gre

how would you judge the potential profit of Bajaj Electronics on the first year of sales to Booth Plastics and give your views to increase the profit?

What action(s) should be taken if analysis of pro forma financial statements reveals positive trends?  Negative trends? When examine the pro forma statements, managers habi