accounting part b

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The Big FiveThe Future is Here.

Business Valuation ReportConfidential



ASSIGNMENT PART B

James M. Myers, CEO of Petco.

Subject Code: ACCT10001 Subject Name: Accounting Reports andAnalysis

Student ID Number: Student Name:

Assignment Name or Number:

Student ID Number Student Name

1. 640840 Wei Ming Lian

2. 639379 Yi Yang Lu

3. 636277 Adrian Agisilaou4. 635953 Rachel Tan

5.

6.



Executive Summary

This report provides an assessment of the current and prospective profitability, liquidityand financial stability of Company Alpha and Company Beta. Methods of analysisinclude trend, and vertical analysis as well as ratios such as Debt, Current and Quick

ratios. All calculations can be found in the appendices. Results of data analyzed show that profitability for both companies have decreased. The findings indicate Company Beta isin an extremely risky position where it the company is unable to pay off its current debtsrelative to Company Alpha as it depends heavily on debt funding whereas CompanyAlpha relies on equity funding. Based on the analysis conducted, Company Alpha would be a better investment as it has lower risk and is more favorable for takeover despite itsfalling EBIT, which is the only concern of this company. This can be remedied throughan improved management of expenses. The almost matured loans of Company Alpha alsoindicate that upon takeover, loan repayment amounts would be relatively low comparedto Company Beta.



Table of contents1. Introduction2. Findings and discussion

a. Company Alphai. Profitability

ii.

Asset efficiencyiii. Liquidityiv. Gearing and long term stabilityv. Market performance

b. Company Betai. Profitability

ii. Asset efficiencyiii. Liquidityiv. Gearing and long term stabilityv. Market performance

3. Conclusions

4.

Recommendations

List of tables and charts used



1. Introduction

This report is being issued to James M. Myers, the CEO of Petco. Our aims in producingthis report is to provide insightful information on which company that Petco shouldchoose to invest in, with justified reasoning. Furthermore, the report will aim to provide

information on how each of these companies’ performances can be improved.



2. Findings and Discussion

a. Company Alphai. Profitability

Our findings indicate that the profitability of Company Alpha has been dropping overall.The ROA and ROE has experienced significant decreases in the past four years. This isdue to a fall in our EBIT which has been traced back not the falling sale figures, butrather to a rise in certain expenses; primarily marketing and employee benefits, whichhave risen by $214,000 (159%) and $304,000 (34%) respectively. (Past four years) Totaland equity have been holding consistent during this period therefore it is the change inEBIT that has dictated that has dictated the changes in profitability. The expenseshighlighted above are indicative to the companies attempts to increase sales revenuethrough the increase of advertising under the marketing expenses and also the increase of staff. However, we see that this has proven to rather inefficient as the increase sales of $1,490,000 (11%) compared against the market expenses (159%). The increase in

marketing is not proportionate with the increase in sales, and therefore there is inefficientallocation of resources. This has lead to lower profits despite the increase in sales.

The GPM decreased slightly due to the increase in cost price not being reflected in selling price. Therefore, this has adversely affected the profitability of the firm. The profitmargin has decreased due to the EBIT decreasing at a greater proportion than the increasein sales revenue. EBIT decreased $457,000 (35%) over the past four years, compared tothe increase in sales revenue $1,490,000 (11%).

The findings for profitability show that our sale mark up for generation of revenue is notthe main problem in this decrease in profitability, rather it is in the inefficient allocationof resources due to inefficient spending in marketing and employee benefits.

ii. Asset efficiency

The asset turnover has increased due to a increase in sales revenue and a decrease in atotal assets. This has occurred due to depreciation of PPE. The inventory turnover increased as a result of stock increasing at a greater rate than cost of sales. This was dueto the fact that the company was purchasing more stock than it was able to sell; the proportion of sales relative to the amount of stock purchase has decreased over the pastfour years.

The trade debtors have increased at a greater proportion than sales revenue. The increasein debtor’s turnover is explained by the increase in regular customers, indicating agrowing customer base. The company’s asset efficiency is not yet at its optimal level, dueto stock overflow and inefficient mark up of prices. The debtors turnover maintains a positive outlook.



iii. Liquidity

The current ratio has decreased even though current assets and current liabilities haveshown increases. The company’s trade and other payables and loans have increased at agreater proportion to current assets. However, the current ratio still maintains a healthy

ratio of 1.58:1.

Quick Asset Ratio has dropped from 0.80 to 0.54 displaying a growing dependency oninventory to make up current assets and a decrease in other current assets whichcontribute the liquidity of the company. This falling liquidity is due to too much stock which in turn has increased trade payables.

Liquidity is not optimal shape as the firm is very dependent on sales through inventory tohelp its liquidity.

iv. Gearing and long term stability

There is a stable equity and debt ratio, with the firm relying more on an equity reliedmodel, rather than debt funded business model. The total liabilities have fallen due toloans almost reaching full maturing and increase in total equity due to increase in sales.

Interest coverage has fallen due to EBIT decreasing at a greater rate than net financingcosts. However, overall gearing of the company is quite stable because of the fact thatcompany relies more on equitable funding rather than debt. The main concern of thecompany is due to the company’s inability to generate consistent EBIT due to inefficientallocation of expenses.

v. Market performance

The company’s market performance outlook has fallen, primarily due to the fallen EBIT.

Earnings per share and dividends per share have fallen, which has discouragedshareholders from purchasing shares. However, the NTAB holds a stable figureindicating that the company has a rather solid ordinary share holders’ equity. Overall,

although market performance has fallen, this does not indicate poor performance of the business, rather, only the poor allocation of expenses. Despite a high price earnings ratio,the share price is asking for is reasonable as the company is funded mostly by equityrather than debt and therefore there is less risk involved in investing into company Alpha.



b. Company Betai. Profitability

ROA has fallen, due to our inventory increasing at a greater proportion than our EBIT.However, ROE has increased due to EBIT increasing at a greater rate than equity. Thisincrease in EBIT is due to an increase in sales, whereas the increase in equity is duehigher reserves from asset revaluations. There has been a large increase in inventory thana greater rate than EBIT, which in turn has lead to the increase in ROA. It is not profitable to hold on to a large amount of inventory as storage expenses and maintenanceexpenses will be incurred.

The GPM shows a very stable ratio because of a stable mark up as the mark up has beenconsistent with the cost of sales. Profit margin has decreased due to a higher salesrevenue but a fallen EBIT figure, which is due to a wage rise of large proportions. The

employee costs have increased a lot proportionally by (2131%) against sales revenue of (1274%). This has contributed to our overall fall in profitability.

ii. Asset efficiency

ATO has shown an increase, as sales revenue has increased at a greater proportion thataverage total assets. The company’s inventory turnover has increased because the average

total assets are greater than that of the cost of sales; a significant surplus in stock.

Debtors turnover has been stable in the past 3 years as the level of credit sales is proportionately the same to the level of sales that has been generated. Asset efficiencyhas not improved or deteriorated.

iii. Liquidity

Current ratio has increased due to our large increase in inventory (1904%) against a slightincrease in current liabilities. Our quick asset ratios have increased, however, it is muchlower than current ratio which therefore identifies that the company is highly reliant oninventory for liquidity demands. Should the loans which are at present non-currentliabilities, become current liabilities the current ratio will reduce to less than 0.2.

iv. Gearing and long term stability

The debt ratio has increased dramatically over the past four years indicating that majorityof the business’ assets are funded by liabilities, mainly of the form of interest bearingloans and borrowings (69% of total assets). This is a very risk form of funding, especiallyshould the debt ratio forgo above 75% as is likely to occur according to current trends inthe next few months as all of these non-current liabilities would become current. Themajority of the remaining liabilities and equities are made up of reserves (the asset



revaluation) (19%). There is no guarantee that these reserves will be able to be converted back into cash at the amounts reported in the balance sheet.

v. Market performance

The market performance appears strong, with the earnings per share increasingsignificantly as the profit improves. A dividend payout ratio exceeding 100% indicatesthat all profits are going towards paying dividends. This is characteristic of the companywithdrawing all of its profits from its operations. Despite the low price earnings ratio, theshare price that the company is asking for is unreasonable as the company is fundedmostly by debt, and these debts will have repaid by the new owner of the business.



3. Conclusions

Company Alpha has a falling EBIT, which reflects it poor profitability ratio, due to poor management of expenses. In contrast, Company Beta shows an exponential rise in itsEBIT which at first glance seems profitable; however, further analysis shows company

beta follows a debt focused model that relies heavily on loans to fund its business model.Whereas, company Alpha is funded mostly though equitable funding, with fundingcoming from retained profits and early contributions. With company Beta approaching its75% debt limit, it is in an extremely risky position where the company is unable to payoff its current debts.

There has been a decrease in dividends and almost fully matured loans for companyAlpha. Whereas for company beta, the amount of dividends paid are being increased, andmore loans are being taken out with minimal repayments.



4. Recommendations

The Big Five recommends that you invest in Company Alpha, as it is much lower risk as

it is equitably funded compared to the high risk and high debt business model of

Company Beta. The large equity reserves indicate a stable gearing and which is favorable

for a takeover. Furthermore, it is ready for take over because there are less shareholdersthan company beta, therefore there is more power for the controlling business to make

decisions. Although Company Alpha shows a falling EBIT, it is the only concern of this

company. This can be easily improved by better management of expenses; primarily

better allocation of its resources and the change in sales should better reflect the change

in expenses. The almost matured loans means that a takeover of company Alpha means

that the repayment amounts are comparatively low when looking at company Beta.

Furthermore, there is potential for greater markup in sale of stock and there is a growth in

regular customer base.



Appendix A

i. Company Alpha

Year $2,012 $2,011 $2,010 $2,009 $2,008 Sales Revenue $14,831 $14,347 $13,776 $13,397 $13,341

Cost of sales $11,372 $10,925 $10,430 $10,113 $10,021

Gross profit $3,459 $3,422 $3,346 $3,284 $3,320

Expenses

Administrative $212 $205 $199 $190 $184

Depreciation $107 $138 $121 $167 $164

Marketing $349 $273 $219 $169 $135

Occupancy/Insurance expenses $760 $730 $716 $688 $653

Employee Benefits $1,188 $1,086 $930 $855 $884

Total expenses $2,616 $2,432 $2,185 $2,069 $2,020

Earnings Before Interest and Tax $843 $990 $1,161 $1,215 $1,300

Finance income $10 $10 $10 $9 $9

Finance costs $93 $100 $111 $114 $129

Profit Before Tax $760 $900 $1,060 $1,110 $1,180

Income tax $228 $270 $318 $333 $354

Net Profit After Tax $532 $630 $742 $777 $826



Year 2012 2011 2010 2009 2008

Sales Revenue 100.00% 100.00% 100.00% 100.00% 100.00%

Cost of sales 76.68% 76.15% 75.71% 75.49% 75.11%

Gross profit 23.32% 23.85% 24.29% 24.51% 24.89%

Expenses

Administrative 1.43% 1.43% 1.44% 1.42% 1.38%

Depreciation 0.72% 0.96% 0.88% 1.25% 1.23%

Sales and Marketing 2.35% 1.90% 1.59% 1.26% 1.01%

Occupancy expenses 5.12% 5.09% 5.20% 5.14% 4.89%

Employee Benefits 8.01% 7.57% 6.75% 6.38% 6.63%

Total expenses 17.64% 16.95% 15.86% 15.44% 15.14%

EBIT 5.68% 6.90% 8.43% 9.07% 9.74%

Finance income 0.07% 0.07% 0.07% 0.07% 0.07%

finance costs 0.63% 0.70% 0.81% 0.85% 0.97%

profit before tax 5.12% 6.27% 7.69% 8.29% 8.84%

income tax 1.54% 1.88% 2.31% 2.49% 2.65%

profit after tax 3.59% 4.39% 5.39% 5.80% 6.19%

Year 2012 2011 2010 2009 2008

Sales Revenue 111.17% 107.54% 103.26% 100.42% 100.00%

Cost of sales 113.48% 109.02% 104.08% 100.92% 100.00%

Gross profit 104.19% 103.07% 100.78% 98.92% 100.00%

Expenses

Administrative 115.22% 111.41% 108.15% 103.26% 100.00%

Depreciation 65.24% 84.15% 73.78% 101.83% 100.00%


Occupancy expenses 116.39% 111.79% 109.65% 105.36% 100.00% Wages 134.39% 122.85% 105.20% 96.72% 100.00%

Total expenses 129.50% 120.40% 108.17% 102.43% 100.00%

EBIT 64.85% 76.15% 89.31% 93.46% 100.00%



111.11% 111.11% 111.11% 100.00% 100.00%

finance costs 72.09% 77.52% 86.05% 88.37% 100.00%


income tax 64.41% 76.27% 89.83% 94.07% 100.00%

profit after tax 64.41% 76.27% 89.83% 94.07% 100.00%

Year 2012 2011 2010 2009 2008

Current Assets Cash and cash equivalents $183 $194 $204 $234 $254

Trade and other receivables (net) $130.0 $121.0 $93.0 $87.0 $67.0

Inventories $570 $527 $493 $471 $441

Other assets $44 $43 $42 $40 $37

Total Current Assets $927 $885 $832 $832 $799

Non Current Assets

Property, Plant and Equipment (net) $2,422 $2,487 $2,578 $2,671 $2,800

Total Non Current Assets $2,422 $2,487 $2,578 $2,671 $2,800

Total Assets $3,349 $3,372 $3,410 $3,503 $3,599

Current Liabilities

Trade and other payables $413 $341 $304 $293 $271

Interest-bearing loans and borrowings $119 $83 $57 $43 $37

Income Tax Payable $32.0 $67.0 $37.0 $46.0 $28.0

Provisions $21 $20 $19 $17 $16

Total Current Liabilities $585 $511 $417 $399 $352

Non Current Liabilities Interest-bearing loans and borrowings $8 $127 $210 $267 $310

Provisions $142 $138 $134 $126 $112

Total Non Current Liabilities $150 $265 $344 $393 $422

Total Liabilities $735 $776 $761 $792 $774

Net Assets $2,614 $2,596 $2,649 $2,711 $2,825



Equity

Contributed equity $1,000 $1,000 $1,000 $1,000 $1,000

Reserves $840 $720 $600 $480 $360

Retained profits $774 $876 $1,049 $1,231 $1,465

Total Equity $2,614.

0 $2,596.

0 $2,649.

0 $2,711.

0 $2,825.

0

Dividends

Opening Retained Profit $876 $1,049 $1,231 $1,465

Add Profit $532 $630 $742 $777

reserve transfer -$120 -$120 -$120 -$120

Available $1,288 $1,559 $1,853 $2,122

less dividends $514 $683 $804 $891

Closing retained profit $774 $876 $1,049 $1,231



Year 2012 2011 2010 2009 2008

Current Assets

Cash and cash equivalents 5.46% 5.75% 5.98% 6.68% 7.06%

Trade and other receivables 3.88% 3.59% 2.73% 2.48% 1.86%

Inventories 17.02% 15.63% 14.46% 13.45% 12.25%Other assets 1.31% 1.28% 1.23% 1.14% 1.03%

Total Current Assets 27.68% 26.25% 24.40% 23.75% 22.20%

Non Current Assets 0.00% 0.00% 0.00% 0.00% 0.00%

Property, Plant and Equipment (net) 72.32% 73.75% 75.60% 76.25% 77.80%

Total Non Current Assets 72.32% 73.75% 75.60% 76.25% 77.80%

Total Assets 100.00% 100.00% 100.00% 100.00% 100.00%

Current Liabilities

Trade and other payables 12.33% 10.11% 8.91% 8.36% 7.53%

Interest-bearing loans and borrowings 3.55% 2.46% 1.67% 1.23% 1.03%

Income Tax Payable 0.96% 1.99% 1.09% 1.31% 0.78%

Provisions 0.63% 0.59% 0.56% 0.49% 0.44%

Total Current Liabilities 17.47% 15.15% 12.23% 11.39% 9.78%

Non Current Liabilities


Provisions 4.24% 4.09% 3.93% 3.60% 3.11%

Total Non Current Liabilities 4.48% 7.86% 10.09% 11.22% 11.73%

Total Liabilities 21.95% 23.01% 22.32% 22.61% 21.51%

Net Assets 78.05% 76.99% 77.68% 77.39% 78.49%

Equity

Contributed equity 29.86% 29.66% 29.33% 28.55% 27.79%

Reserves 25.08% 21.35% 17.60% 13.70% 10.00%

Retained profits 23.11% 25.98% 30.76% 35.14% 40.71%

Total Equity 78.05% 76.99% 77.68% 77.39% 78.49%



Year 2012 2011 2010 2009 2008

Current Assets



Inventories 129.25% 119.50% 111.79% 106.80% 100.00%Other assets 118.92% 116.22% 113.51% 108.11% 100.00%


Non Current Assets



Total Assets 93.05% 93.69% 94.75% 97.33% 100.00%

Current Liabilities




Provisions 131.25% 125.00% 118.75% 106.25% 100.00%




Provisions 126.79% 123.21% 119.64% 112.50% 100.00%



Net Assets 92.53% 91.89% 93.77% 95.96% 100.00%

Equity


Reserves 233.33% 200.00% 166.67% 133.33% 100.00%


Total Equity 92.53% 91.89% 93.77% 95.96% 100.00%



2012 2011 2010 2009

ROA 25.09% 29.19% 33.59% 34.22%

ROE 20.42% 24.02% 27.69% 28.07%

GPM 23.32% 23.85% 24.29% 24.51%

PM(EBIT) 5.68% 6.90% 8.43% 9.07%

Current Ratio 1.58 1.73 2.00 2.09 :1

Quick Ratio 0.54 0.62 0.71 0.80 :1

Acc Rec Turn 118.18 134.08 153.07 173.99 times

Av collection period 3.09 2.72 2.38 2.10 days

Inventory Turnover 20.73 21.42 21.64 22.18 times

Av time to sell 17.60 17.04 16.87 16.46 days

Asset Turnover 4.41 4.23 3.99 3.77 times

Debt 21.95% 23.01% 22.32% 22.61%

Equity 78.05% 76.99% 77.68% 77.39%

Debt to Equity 0.28 0.30 0.29 0.29 times or

%

Interest Coverage 10.16 11.00 11.50 11.57 times or

%

Net tangible asset backing per

share $2.61 $2.60 $2.65 $2.71

Earnings per share $0.53 $0.63 $0.74 $0.78

Dividends per share $0.51 $0.68 $0.80 $0.89 Dividend pay out ratio 96.62% 108.41% 108.36% 114.67%

Price earnings ratio 9.40 share price unknown

Share Price $5.00 share price unknown



Year 2012 2011 2010 2009 2008

Total Revenue 100.00% 100.00% 100.00% 100.00% 100.00%

Sales Revenue 65.49% 65.62% 65.71% 65.75% 65.96%

Cost of sales 34.33% 34.29% 33.89% 33.77% 33.39%

Gross Sales profit 31.17% 31.33% 31.82% 31.97% 32.58%

Veterinary Services 34.51% 34.38% 34.29% 34.25% 34.04%

Cost of Veterinary Services 17.16% 17.37% 17.25% 17.11% 16.86%

Gross Veterinary Profit 17.34% 17.01% 17.04% 17.15% 17.18%

Gross Profit 48.51% 48.34% 48.87% 49.12% 49.76%

Loss on sale of NCA 1.46% 0.00% 0.00% 0.00% 0.00%

Expenses Administrative 4.57% 4.21% 4.01% 2.72% 2.51%

Depreciation 0.98% 0.98% 0.91% 0.84% 0.65%


Occupancy expenses 5.69% 5.48% 4.68% 5.25% 3.81%

Wages 15.81% 14.99% 13.32% 10.02% 9.81%

Total expenses 32.62% 31.23% 28.12% 23.68% 21.56%

EBIT 14.43% 17.11% 20.75% 25.44% 28.20%

Finance income 0.21% 0.25% 0.34% 0.32% 0.08%

finance costs 3.56% 3.68% 3.28% 2.92% 2.35%


income tax 3.32% 4.10% 5.34% 6.85% 7.78%

profit after tax 7.75% 9.58% 12.47% 15.99% 18.15%



Year 2012 2011 2010 2009 2008

Sales Revenue 1373.59% 771.99% 398.77% 201.60% 100.00%

Cost of sales 1422.33% 797.09% 406.31% 204.61% 100.00%

Gross Sales profit 1323.63% 746.27% 391.04% 198.51% 100.00%

Veterinary Services 1402.62% 783.81% 403.33% 203.57% 100.00%

Cost of Veterinary Services 1408.65% 799.52% 409.62% 205.29% 100.00%

Gross Veterinary Profit 1396.70% 768.40% 397.17% 201.89% 100.00%

Gross Profit 1348.86% 753.91% 393.16% 199.67% 100.00%

Expenses

Administrative 2519.35% 1300.00% 638.71% 219.35% 100.00%

Depreciation 2087.50% 1175.00% 562.50% 262.50% 100.00%

Sales and Marketing 1611.86% 905.08% 435.59% 205.08% 100.00% Occupancy expenses 2065.96% 1117.02% 491.49% 278.72% 100.00%

Wages 2230.58% 1185.95% 543.80% 206.61% 100.00%

Total expenses 2093.61% 1124.44% 522.18% 222.18% 100.00%

EBIT 707.76% 470.69% 294.54% 182.47% 100.00%

finance costs 2096.55% 1213.79% 558.62% 251.72% 100.00%


income tax 590.63% 409.38% 275.00% 178.13% 100.00%

profit after tax 590.63% 409.38% 275.00% 178.13% 100.00%



Year 2012 2011 2010 2009 2008

Current Assets

Cash and cash equivalents $412 $242 $91 $37 $19

Trade and other receivables (net) $63 $38 $21 $8 $3

Inventories $1,663 $960 $419 $205 $83

Other assets $187 $95 $48 $21 $11

Total Current Assets $2,325 $1,335 $579 $271 $116

Non Current Assets

Plant and Equipment (net) $14,254 $9,193 $6,178 $3,143 $1,454

Intangible Assets $1,000 $770 $520 $350 $200

Total Non Current Assets $15,254 $9,963 $6,698 $3,493 $1,654

Total Assets $17,579 $11,298 $7,277 $3,764 $1,770

Current Liabilities

Trade and other payables $619 $384 $148 $77 $36

Income Tax Payable $254.0 $142.0 $98.0 $50.0 $27.0

Provisions $67 $40 $22 $15 $9

Interest-bearing loans and borrowings $23 $12 $8 $5 $3 Total Current Liabilities $963 $578 $276 $147 $75


Interest-bearing loans and borrowings $12,163 $7,687 $4,976 $2,142 $584

Provisions $51 $31 $18 $12 $10

Total Non Current Liabilities $12,214 $7,718 $4,994 $2,154 $594

Total Liabilities $13,177 $8,296 $5,270 $2,301 $669

Net Assets $4,402 $3,002 $2,007 $1,463 $1,101

Equity

Contributed equity $1,000 $1,000 $1,000 $1,000 $1,000

Reserves $3,360 $1,950 $940 $380 $10

Retained profits $42 $52 $67 $83 $91

Total Equity $4,402 $3,002 $2,007 $1,463 $1,101



Dividends

Opening Retained Profit $52 $67 $83 $91

Add Profit $1,323 $917 $616 $399

Reserve transfers $0 $0 $0 $0

Available $1,375 $984 $699 $490

less dividends $1,333 $932 $632 $407 Closing retained profit $42 $52 $67 $83

Year 2012 2011 2010 2009 2008

Current Assets



Inventories 9.46% 8.50% 5.76% 5.45% 4.69%

Other assets 1.06% 0.84% 0.66% 0.56% 0.62%


Non Current Assets


Intangible Assets 5.69% 6.82% 7.15% 9.30% 11.30%


Total Assets 100.00% 100.00% 100.00% 100.00% 100.00%

Current Liabilities



Provisions 0.38% 0.35% 0.30% 0.40% 0.51%




Provisions 0.29% 0.27% 0.25% 0.32% 0.56%





Net Assets 25.04% 26.57% 27.58% 38.87% 62.20%

Equity


Reserves 19.11% 17.26% 12.92% 10.10% 0.56%


Total Equity 25.04% 26.57% 27.58% 38.87% 62.20%

Year 2012 2011 2010 2009 200

Current Assets



Inventories 2003.61% 1156.63% 504.82% 246.99% 100.00%

Other assets 1700.00% 863.64% 436.36% 190.91% 100.00%


Non Current Assets


Intangible Assets 500.00% 385.00% 260.00% 175.00% 100.00%


Total Assets 993.28% 638.42% 411.30% 212.66% 100.00%

Current Liabilities



Provisions 744.44% 444.44% 244.44% 166.67% 100.00%




Provisions 510.00% 310.00% 180.00% 120.00% 100.00%



Net Assets 400.00% 272.84% 182.56% 132.88% 100.00%



Equity


Reserves 33600.00% 19500.00% 9400.00% 3800.00% 100.00%


Total Equity 400.00% 272.84% 182.56% 132.88% 100.00%

2012 2011 2010 2009

ROA 17.06% 17.64% 18.57% 22.95%

ROE 35.74% 36.61% 35.50% 31.12%

GPM 48.51% 48.34% 48.87% 49.12% PM(EBIT) 14.43% 17.11% 20.75% 25.44%

Current Ratio 2.41 2.31 2.10 1.84 :1

Quick Ratio 0.49 0.48 0.41 0.31 :1

Acc Rec Turn (not needed) 116.65 111.59 116.83 155.45 times

Av collection period 3.13 3.27 3.12 2.35 days

Inventory Turnover (not needed) 4.47 4.76 5.37 5.85 times

Av time to sell 81.69 76.63 68.03 62.35 days

Asset Turnover 1.18 1.03 0.89 0.90 times

Debt 74.96% 73.43% 72.42% 61.13%

Equity 25.04% 26.57% 27.58% 38.87%

Debt to Equity 2.99 2.76 2.63 1.57 times

Interest Coverage 4.30 4.99 7.07 9.77 times

Net tangible asset backing per share $3.40 $2.23 $1.49 $1.11

Earnings per share $1.32 $0.92 $0.62 $0.40

Dividends per share $1.33 $0.93 $0.63 $0.41

Dividend pay out ratio 101% 102% 103% 102%

Price earnings ratio 3.78 share price unknown

Share Price $5.00 share price unknown

accounting part b

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