Evaluate the financial status of the company

Reference no: EM131224542

Accounting FALCONS INCORPORATED (IN MILLIONS)-

Assets
	2013	2012
Cash and Marketable Securities	10	80
Accounts Receivable	375	315
Inventories	615	415
Total Current Assets	1,000	810
Net plant and equipment	1,000	870
TOTAL ASSETS	2,000	1,680

Liabilities and Equity
Accounts Payable	60	40
Notes Payable	140	60
Accruals	110	130
Total Current Liabilities	310	230
Long Tmn Bonds	754	580
TOTAL DEBT	1,064	810
Preferred Stock	40	40
Common Stock	130	130
Retained earnings	766	700
TOTAL COMMON EQUITY	896	830
TOTAL LIABILITIES AND EQUITY	2,000	1,680

Income Statement: 12/31104	2013	2012
Net Sales	3,200	2,850
Operating Costs (excludes Dep/Amonization	2,700	2,497
EBITDA	500	353
Depreciation	100	90
Amortization	0	0
Depreciation and Amortization	100	90
EBIT	400	263
Less Interest	88	60
EBT	312	203
Taxes (40%)	124.8	81.2
NET INCOME (before Preferred Dividends)	187.2	121.8
Preferred Dividends	4	4
NET INCOME	183.2	117.8
Common Dividends	117	53
Addition to Retained Earnings	66.2	64.8

1. You are a potential investor of Falcons Incorporated and was given the financial statements of the company for the year ended 2012 and 2013. Evaluate the financial status of the company in terms of its liquidity, solvency, structure and profitability. Use your comprehensive analysis to decide whether it would be a wise decision to invest in the company or not. You can make use of various tools in financial analysis such as horizontal (increase-decrease method), vertical (common size financial statement), and financial ratio analysis.

2. The company provides Preferred and Common Stocks to stockholders. Which among the two would be better to invest in? Discuss comprehensively the factors that you will consider in choosing the type of stock that you will invest in.

Reference no: EM131224542

Questions Cloud

The presence of leader ship sceanarion : The presence of leader ship sceanarion? A North America division (approximately 400 employees) of an international company is experiencing rapid growth through it success strategies and through a series of acquisitions.

Explain affirmative action in conjunction : Affirmative action is a topic that tends to elicit strong opinions. Exhibit 5-11 in Chapter 5 sets forth opposing views on the issue of affirmative action. explain affirmative action in conjunction with Title VII mandates from a legal perspective. Wh..

Explain the change in political philosophy : How do you explain the change in political philosophy between the Hoover and the Roosevelt administrations? Does it suggest that economic policies reflect political pressures as much as economic ideas? Or does it show that without new ideas, polic..

Relationship between gender and graduate gpa : What is the relationship between undergraduate GPA and graduate GPA - What is the relationship between class size and Graduate GPA.

Evaluate the financial status of the company : ou are a potential investor of Falcons Incorporated and was given the financial statements of the company for the year ended 2012 and 2013. Evaluate the financial status of the company in terms of its liquidity, solvency, structure and profitabili..

What features of the evidence-based planning framework : What features of the Evidence-Based Planning Framework for Public Health model are most applicable to a proposed health program for lead and lead poisoning (i.e. describe the parts of the model that you chose and how these parts apply to your health ..

Construct a cross-tabulation table : Construct a cross-tabulation table (that shows both percentage and raw numbers of observations) by hand or in Microsoft Word to represent these data.

Has mathis suffered because of normandale conduct : Was it ethical for Normandale to sell the alleged knock-off products at a lower price? Explain. What federal or state laws protect owners of intellectual property? How do they apply here? Explain. What damages, if any, has Mathis suffered because of..

What is generalized model for planning a health promotion : What is a "Generalized Model" for planning a health promotion program and how does it relate to Evidence-Based Planning Framework for Public Health?

User Account

All Pages