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GREAT LEADER

SYNDICATEMBA EXECUTIVE 46

29111311 Haidir Afesina 29111328 Hendra Winata 29111329 Mita Listyatri 29111338 Andek Prabowo

29111344 Aprian Eka Rahadi 29111384 Chairunnisa Mirhelina 29111387 Franciscus Xaverius Kresna P 29111393 Agung Indri Pramantyo

ASSESSING SCITRONICS

FUTURE FINANCIAL HEALTH

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Outline

EXECUTIVE

SUMMARY

ANALYSISOBJECTIVES

CONCLUSION &

RECOMMENDATION

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EXECUTIVE SUMMARY

SciTronics Founded in 1981, in industrial processing and

manufacturing community, e.g medical device.

Our group will try to analyze SciTronics financial statements

and assess the performance of the company using threeprimary sources financial data in Exhibit 1 & 2. We analyze

the health of company financial using 9 steps of the

corporate financial system with a suggested step by step

process to assess whether it will remainin balance over theensuing 3-5 years

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ANALYZE(1)

Resource from financial data in: Exhibit 1. Income Statement

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ANALYZE(3)

1

Sales Growth 1 During the four year period ended December 31, 2008, SciTronics' sales

grew at a 21%

compound rate. There were no acquisition or divestitures

2 Profitability Ratio: 1 SciTronics' profit as a percentage of sales in 2008 was 5.74%

How profitable is the company? 2 SciTronics’ profits as a percentage of sales in 2005 was 3.40%

This represented an increase from 2.34%

in 2005

3 Sci Tronics had a total of $159,000

capital at year-end 2008 and earned interest but after taxes (EBIAT) $16,000

during 2008. Its return on capital was 10%

in 2008 which represented an increase from the 4%

earned in 2005

4SciTronics had $75,000

of owner's equity and earned $14,000

after taxes in 2008. Its return on equity was 18.67%an improvement rom the 8.20%

earn in 2005

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ANALYZE(4)

3 Activity Ratios:How Well Does the company employee

its assets?

1

Total Asset turnover for ScTronics in 2008 can be calculated by dividing

$

244,000

into

$

159,000

The turnover deteriorated from 1.53

times in 2005 to 1.58

times in 2008

2SciTronic Had

$66,000

in account receivables at year-end 2008, Its average sales per day were

$

668.49

during 2008 and its average collection period was 98.73

days. This an improvement from the average collection period of 104.29

days in 2005.

3

SciTronics apparently needed

$

29,000

of inventory at year-end 2008 to support its operations during 2008. Its activity

during 2008 as measured by the CoGS was

$

74,000

It therefore had an inventory turnover of 2.55

times. This represented an improvement from 2.05

times in 2005

4

SciTronics had net fixed assets of

$

18,000

and sales of

$

244,000

in 2008. Its fixed asset turnover ratio in 2008 was 13.56times, an ideterioration from 16.33

times in 2005

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ANALYZE(5)

4 Leverage Ratio 1 SciTronics' ratio of total assets divided by owners' equity increase 1.52

from at year end 2005 to 2.12

at year end 2008

2 At year end 2008, SciTronics' total liabilities were 58.23%

of its total assets, which compares with 34.41%

in 2005

3 The market value of SciTronics' equity was $175,000,000

at December 31,2008. The total Debt ratio at market was 0.32

4 SciTronics' earning before interest and taxes (operating income) was $26,000

in 2008. and its interest charges were $2,000

its times interest earned was 13 13

times. This represented an improvement from the 2005 level of 10

times.

5 SciTronics owed its suppliers $6,000

at year-end 2008. This represented 8.10%

of COGS and was a decrease from 11.60%at year end 2005. The company appears to be more prompt in paying its

suppliers in 2008 than it was in 2005.

6 The financial riskiness of SciTronics decreased between 2005 and 2008.

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ANALYZE(6)

5 LIQUIDITY RATIOS 1 SciTronics held $133,000

of current assets at year end 2008 and owed $48,000

to creditors due to be paid within one year. Its current ratio was, 2.77

a decrease from the ratio of 3.9

at year end 2005.

2 The quick ratio for SciTronics at year end 2008 was 2.16

a decrease from the ratio of 2.9

at year end 2005.

6 PROFITABILITY REVISITED 1 The improvement in SciTronics' return on equity from 8.20%

in 2005 to 18.70%

in 2008

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CONCLUSION

1. SciTronic Performance can be categorized as health companybecause its profitability ratio that increase during the 2005-2008

period.

2. SciTronics financial strength and its access to external sources its

improved.this can be seen from the financial ratios like profitabilityratios and leverage ratios.

3. Questions that would ask for management

a. What will the management plan to maintain total current liabilities

that had been increase during period time 2005 –

2008b. Did the company will continous expand their fix asset such as

property and equipment.

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RECOMMENDATION

SciTronics must always be aware based on data from financial statement,

they should always keep their finance in optimum profit e.g for company

expansion or investor trust

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CORPORATE FINANCIAL SYSTEM

Steps 1,2 : analysis of fundamental

Steps 3 : Investment to support the

business unit(s) strategy (ies)

Steps 4 : Future Probability and

Competitive Performance

Steps 5: Future External Financing NeedsSteps 6 : Access to Target Sources of

External Finance

Steps 7 : Viability of the 3-5 year plan

Steps 8 : Stress test under scenarios of

adversity

Steps 9 : Current Financing Plan

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UNIDENTIFIED INDUSTRIES

A is electric utility company because have abig number of property and equipment but

less inventories.

B is Japanese automobile manufacturer

because have a big number of cash,

property and equipment and also have the

largest inventories.

C is Upscale apparel retailer because have

a big number of cash and inventories

D is Disc general Merchandise retailer

because have less profit.

E is Automated test equipment because

need a large inventories.

Industries Idenitifed

Japanese automobile

Electric utility

Disc general retailer

Automated test equip

Upscale apparel

B

A

D

E

C

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