Chapter 4 Sam Handwich Sandwich Shop ... - profcraigarmstrong

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Chapter 4 Sam Handwich Sandwich Shop ... - profcraigarmstrong Powered By Docstoc
					Quarterly Income Statement for Sam Handwich's Sandwich Shop
                                 QTR ending 12/31/11        QTR ending 9/30/11   Vertical analysis (12/31/
Revenues
Retail sales                     $    68,283                $   63,800.0               1.00
Wholesale sales                  $   104,417                $   108,345
Cost of sales                    $    52,067                $    50,430                0.30
Gross Profit                     $   120,633                $   121,715                0.70

Total operating expenses         $   111,117                $    114,000               0.64
Operating profit                 $     9,516                $      7,715               0.06

Other income/expenses
interest income                  $        41                $         40              0.000
Interest expense                 $      (651)               $       (500)            -0.004
Depreciation - Store equipment   $      (292)               $       (292)            -0.002

Total other income / expenses    $      (902)               $       (752)            -0.005

Net income                       $     8,614                $      6,963              0.050

Quarterly Balance Sheet for Sam Handwich's Sandwich Shop
                                 QTR ending 12/31/11        QTR ending 9/30/11
Assets
Current Assets
 Change Fund                     $       569                $        455              0.004
 Cash in Bank - Checking         $     8,612                $      9,473              0.068
 Cash in Bank - Savings          $     9,622                $      8,660              0.076
 Accounts Receivable             $     6,842                $      5,474              0.054
 Inventories                     $       400                $        425              0.003
Total Current Assets             $    26,045                $     24,487              0.205


Fixed Assets
 Furniture and Fixtures                         $   4,296
   Less Accum Dep.               $     4,143 $ 153.43       $      4,296              0.033
 Equipment                                      $ 68,300
   Less Accum Dep.               $    65,861 $      2,439   $     68,300              0.518
 Transporation Equip                            $ 32,300
   Less Accum Dep.               $    31,146 $      1,154   $     32,300              0.245
Total Fixed Assets               $   101,150                $    104,896              0.795

Total Assets                     $   127,195                $    129,383                  1
Current Liabilities
 Accounts payable - trade       $     5,700    $     5,130    0.045
 Accrued payroll taxes          $     3,400    $     2,720    0.027
 Accrued sales taxes            $     9,398    $     9,751    0.074
Total current liabilities       $    18,498    $    17,601    0.145

Long-term liabilities
 Auto loans payable             $    18,400    $    21,160    0.145
 Total long-term liabilities    $    18,400    $    21,160    0.145
Total Liabilities               $    36,898    $    42,432    0.290

Stockholder's Equity
  Common stock                  $    85,700    $    85,700     0.674
  Retained earnings             $    (4,017)   $    (5,712)   -0.032
  Net profit/Loss               $     8,614    $     6,963     0.068
Total Equity                    $    90,297    $    86,951     0.710

Total Liabillities and Equity   $   127,195    $   129,383        1
Vertical analysis (12/31/11)   Horizontal analysis

                                     0.07
                                    -0.04
                                     0.03
                                    -0.01

                                    -0.03
                                     0.23


                                     0.03
                                     0.30
                                     0.00

                                     0.20

                                     0.24




                                     0.25            Current Ratio   Quick Ratio
                                    -0.09              1.408          1.0165
                                     0.11
                                     0.25
                                    -0.06            Inventory turnover
                                     0.06             126.22
                                                     Average days inventory in store
                                                      2.8917
                                                     D/E
                                    -0.04             0.4086
                                                     D/TA
                                    -0.04             0.2901
                                                     Operating Profit Margin Ratio
                                    -0.04               0.05
                                    -0.04

                                    -0.02
 0.11
 0.25
-0.04
 0.05


-0.13
-0.13
-0.13


 0.00
-0.30   What are negative retained earnings?
 0.24
 0.04

-0.02
Using the data from the Income Statements and Balance Sheets for Sam Handwich's Sandwich Shop, calculate:

1 The current and quick ratios for the most recent quarter


2 The inventory turnover ratio for the most recent quarter


3 Debt-to-equity, debt-to-total-asset and operating profit margin ratios for the most recent quarter




4 Perform a vertical analysis of the income statement for the most recent quarter (use the columns to the right of the statem

5 Perform a vertical analysis of the balance sheet (use the columns to the right of the statement values for your calculations)

6 Perform a horizontal analysis of both the income statement and balance sheet (use the columns to the right of the stateme

7 Based on your analysis, would you invest in Sam's sandwich shop? Explain why or why not. In what areas is Sam doing well,
ich Shop, calculate:




columns to the right of the statement values for your calculations)

ment values for your calculations)

olumns to the right of the statement values for your calculations)

. In what areas is Sam doing well, and in what areas is he doing poorly?

				
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