Академический Документы
Профессиональный Документы
Культура Документы
July 29,
1995
February 3,
1996
$10,603
1,486
132,580
10,876
2,826
158,371
119,425
-65,943
53,482
$8,125
2,778
143,474
11,177
10,296
175,850
117,466
-52,128
65,338
$8,166
2,658
110,744
11,188
989
133,745
120,277
-61,674
58,603
3,816
2,016
3,408
6,198
3,073
2,368
814
6,646
75,215
1,431
86,252
1,303
6,744
Chapter 5 - Page 66
Total Assets
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Borrowings under credit agreement
Current maturities of long-term debt
Accounts payable
Accrued expenses
Accrued income taxes
Total current liabilities
Long-term debt
Other long-term liabilities
Redeemable preferred stock
Shareholders' Equity (Deficit):
Common stock: par value $1.00 per
share; 1,000 shares authorized, issued
and outstanding
Paid-in capital
Accumulated deficit
Total shareholders' equity (deficit)
Total Liabilities & S.E.
Net sales
$218,499
$327,440
$199,092
$81,800
26
47,397
21,864
3,183
154,270
105,018
11,006
48,521
$43,700
29
65,472
18,628
1,341
129,170
135,047
11,094
40,389
$27,000
25
36,754
19,913
3,007
86,699
130,031
11,242
44,319
1
49,789
-150,106
-100,316
$218,499
1
49,789
-38,050
11,740
$327,440
1
49,789
-122,989
-73,199
$199,092
Chapter 5 - Page 67
90,283
31,444
95,123
34,987
185,812
57,519
190,061
64,238
33,647
2,956
-5,159
5,072
32,169
3,531
-713
5,200
64,949
5,915
-13,345
9,759
62,042
6,787
-4,591
10,311
-10,231
3,909
-14,140
-5,913
-2,456
-3,457
-23,104
-1,240
-21,864
-14,902
-6,527
-8,375
($14,140)
9,997
($13,454)
$(21,864) $
9,997
-18,372
Ended
July 29,
1995
($21,864)
($18,372)
5,915
9,997
6,787
Chapter 5 - Page 68
492
924
53
-1,240
189
-3,880
625
-21,836
313
11,211
2,746
-70
-26
-23,681
2,371
-47,203
-1,288
25,358
-4,047
-3,161
-471
-32,796
29,800
-
73,700
104,943
-1,257
-6,781
-12
-1,051
-
-20
-150,795
-1,051
-235
27,480
19,761
Chapter 5 - Page 69
Capital expenditures
-1,365
-9,313
3
-1,362
14
-9,299
2,437
-22,334
8,166
$10,603
30,459
$8,125
$8,931
$70
$12,519
$514
CATEGORY
FINANCIAL RATIO
1. Current Ratio
I
Q
I
U
I
D
I
FORMULA
3. Quick Ratio
6 months
6 months ending
ending July 29,
Aug. 3, '96 Note:
'95 Note: some
some formulas
formulas must
must have income
have income
statement items
statement items
multiplied by 2
multiplied by 2
1.04
5,536 $
1.36
47,102
0.08
0.08
-21.05%
-19.80%
Chapter 5 - Page 70
T
Y
5. Cash Flow from Operations (CFFO)
9. Defensive Interval
DEBT
MGT. &
COVERAGE
(27,732,000) $ (33,346,000)
84.78
1.11
130.22
46.55
4.31
(36,820) $
76.89
1.99
137.77
62.87
4.75
(57,376)
7.90
-1.21
6.04
-0.40
-2.08
1.83
1.63
1.18
Chapter 5 - Page 71
P
E
R
F
O
R
M
A
N
C
E
Net IncomeRevenues
-11.27% or N/A
-9.46% or N/A
-25.07% or N/A
-14.66% or N/A
N/A
N/A
* It is unclear if the "other long-term liabilities" on the balance sheet represents terms loans or capital lease obligations.
Regardless, be very careful in interpreting this ratio due to the negative equity in both years.
Conclusions:
This company illustrates what happens to a company's liquidity and debt ratios when it starts experiencing
losses. It is difficult to find any positives in the financial ratios; at least the amount by which NLB is negative has declined.
Y. Guess would want to be very careful with this account. If it has good gross margins (branded jeans generally do),
Y. Guess may hate to lose the account. An experienced credit analyst would offer the following: 1. cut back on terms
from net 30 to net 15 or shorter; 2. keep in contact with County Seat to monitor its financial position, and continue
to monitor its D&B experience; 3. sell with letter of credit backing; 4. possibly go to cash on delivery or even cash
before delivery terms.
Students may miss the first recommendation, but should come up with 2,3, and 4 based on information in the
body of the case and their understanding of Chapter 4.