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


December 31, 2009



Marketable Securities


Accounts Receivable


Less: Allowance for Bad Debts


Net Accounts Receivable



Raw Materials




Finished Goods


Inventory Purchased for Resale


Total Inventory


Plant, Property and Equipment


Less: Accumulated Depreciation


Net Plant, Property and Equipment


Prepaid Expenses


Goodwill and Other Purchased Intangibles


Less: Amortization


Net Goodwill and Other Purchased Intangibles


Total Assets



Accounts Payable


Accrued Advertising


Other Liabilities and Accrued Expense


Current Portion of Long-Term Debt


Long Term Debt


Preferred Stock, $100 par value per share,

100,000 authorized, 0 shares issued and outstanding


Common Stock, $1 par value per share,

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

issued, 12,900,000 outstanding


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


Treasury Stock


Retained Earnings (less Cash Dividends Paid)



Total Liabilities and Owner's Equity


Income Statement

December 31, 2009

December 31, 2008

Sales Revenues



Less: Sales Returns



Net Sales Revenues



Less: Cost of Goods Sold



Gross Profit



Operating Expenses:

Advertising and Sales





Salaries and Wages



Product Development



Merger and Acquisition Related Costs, including

Amortization of Goodwill and Other Intangibles



Total Operating Expenses


Income from Continuing Operations Before Income Taxes


Less: Income Taxes at 35%


Income from Continuing Operations


Discontinued Operations:

Income from Operations of Discontinued Division

(less applicable income taxes)


Loss on Disposal of Discontinued Division

(less applicable income taxes)


Total Gain from Discontinued Operations


Extraordinary Items:

Loss from fire (less applicable income taxes)


Net Income


Divisional Revenues




Online gaming


Customized MP3/CD/DVD



Customized MP3/CD/DVD Inventory at end of 2009


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

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