Provide financial analysis for start-up company

Assignment Help Financial Management

Reference no: EM131513694

Scenario: Your team has been hired to provide financial analysis for a start-up company, Bobble in Style, which produces customized bobble heads. The bobble heads are made out of less rigid materials and are more true to life than those of competitors. The company inventors, Mr. and Mrs. Lee, are going to pitch their idea to Shark Tank in a few months, but first they need to have a better understanding of the businessfinancials. The Lee’s are already creating and selling their product from their home-based office and work area. They know what costs areinvolved with making the bobble heads on a small scale, but they don’t have an understanding of financial figures beyond basic costs. Theyneed you to make sense of various financial figures for them.

The Project: There are several financial analysis tasks involved with this project, which are outlined below. You will also need to create a written executive summary (one page in length). The specific financial analysis tasks and related information are listed below.

Financial Statements: Develop an Income Statement, Cash Flow Statement, and Balance Sheet based on the provided data for year 20XX (the previous year) that follows. Explain the purpose of each financial statement.

1. Income Statement Data for 20XX:

Gross Sales = $33,291

Coupons and Discounts = $549

Cost of Goods = $10,276

Labor = $0 (Mr. and Mr. Lee were the only ones working and did not pay themselves)

advertising fees =$2000

bank fees = $120

phone/internet = $1200

shipping = $1380

utilities = $900

office supplies = $785

Income tax = 26 %

2. Cash Flow Statement Data for 20XX:

Cash in bank = $21,120

Depreciation = $800

Proceeds from disposal of investment = $3,000

Capital Expenditure = -$1,600

Repayment of Bank Loan = -$5,000

Interest Expense Associated with Bank Loan = -$345

Consider any data relevant from the income statement.

3. Balance Sheet Data for 20XX:

Cash = $21,120

Accounts Receivable = $496

Accounts Payable = $200

Inventory = $10,507

Accumulated Depreciation = -$1,000

Common Stock = $0

Financial Ratios: Calculate the following financial ratios and explain the meaning of the results.

Net Profit Margin

Quick Ratio

Debt-to-Equity Ratio

Reference no: EM131513694

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