The Clarkson Lumber Company Documentation of Financial Analysis

Clarkson Lumber
Income Statement
Years Ending December 31, 1993-1996
1st Quarter
1993
1994
1995
1996
Net sales
Cost of goods sold
Trade Discounts
Fixed salaries [estimated]
Other operating expenses
EBIT
Interest
Earnings before tax
Income tax
Net Income

$ 2,921.00 $ 3,477.00 $ 4,519.00 $

2,202.00
2,634.00
3,424.00
0.00
0.00
0.00
115.00
130.00
128.00
507.00
587.00
812.00
97.00
126.00
155.00
23.00
42.00
56.00
74.00
84.00
99.00
14.00
17.00
22.00
$
60.00 $
67.00 $
77.00 $

1,062.00
799.00
0.00
34.00
210.00
19.00
13.00
6.00
1.00
5.00

% of Sales Pro-Forma
1993-1995
1996
$
75.7% $
$
3.42% $
17.46% $
$
$
$
$
$

5,500.00
4,161.40
(66.20)
187.92
960.25
256.64
105.50
151.14
42.19
108.95

Clarkson_Lumber_Income_Smt

The Clarkson Lumber Company Documentation of Financial Analysis

Clarkston Lumber
Balance Sheet
Years Ending December 31, 1993-1996
Assets
Cash
Accounts receivable
Inventory
Total current assets
Property Plant & Equipment
Total Assets
Liabilities
Notes payable, bank
NP, Holtz, current portion
Notes payable, trade
Accounts payable
Accruals
Current portion, term loan
Current liabilities
Term loan
Notes payable, Holtz
Total liabilities
Shareholder Equity
Total Shareholder Equity
Liabilities+Shareholder Equity

1993

1994

1995

% of Sales Pro-Forma
1996 1993-1995
1996

$43.00
$52.00
$56.00
$53.00
306.00
411.00
606.00
583.00
337.00
432.00
587.00
607.00
686.00
895.00 1,249.00 1,243.00
233.00
262.00
388.00
384.00
$919.00 $1,157.00 $1,637.00 $1,627.00
$0.00
0.00
0.00
213.00
42.00
20.00
$275.00
140.00
0.00
$415.00

$60.00 $390.00
$399.00
100.00
100.00
100.00
0.00
127.00
123.00
340.00
376.00
364.00
45.00
75.00
67.00
20.00
20.00
20.00
$565.00 $1,088.00 $1,073.00
120.00
100.00
100.00
100.00
0.00
0.00
$785.00 $1,188.00 $1,173.00

504.00
372.00
449.00
454.00
$919.00 $1,157.00 $1,637.00 $1,627.00

1.38%
12.12%
25.92%
8.09%

EFN=

1.48%

$76.07
666.53
619.23
1,361.83
444.86
$1,806.69
$949.00
0.00
0.00
113.13
81.62
20.00
$1,163.74
80.00
0.00
$1,243.74
562.95
$1,806.69

Clarkson_Lumber_Balance_Sheet

The Clarkson Lumber Company Documentation of Financial Analysis

Ratio:
Current
Quick
Cash
NWC to Total Assets

Short Term Solvency Ratios

1993
1994
1995
249%
127%
16%
44.72%

158%
82%
9%
28.52%

115%
61%
5%
9.84%

Financial Leverage/Long Term Solvency Ratios

Ratio:
1993
1994
1995
Total Debt
45%
68%
73%
Debt-Equity
82%
184%
265%
Equity Multiplier
1.82
3.11
3.65
Long-Term Debt
22%
37%
18%
Times Earned Interest
4.22
3.00
2.77
Cash Covered
4.15
0.61
0.21

1996
117%
64%
7%
10.96%

1996
69%
221%
3.21
12%

2.43
0.22

Profitability Ratios
1993
1994
2.05%
1.93%
6.53%
5.79%
11.90%
18.01%

1995
1.70%
4.70%
17.15%

1996
1.98%
6.03%
19.35%

Asset Utilization Ratios

Ratio:
1993
1994
Inventory Turnover
6.53
6.10
Days Sales Inventory
55.86
59.86
Receivables Turnover
9.55
8.46
Days Sales Receivables
38.24
43.14
NWC Turnover
7.11
10.54
Fixed Asset Turnover
12.54
13.27
Total Asset Turnover
3.18
3.01

1995
5.83
62.57
7.46
48.95
28.07
11.65
2.76

1996
6.72
54.31
8.25
44.23
27.77
12.36
3.04

Weighted Average Cost of Capital

1993
1994
1995
11.90%
18.01%
17.15%
54.84%
32.15%
27.43%
14.38%
10.50%
7.60%
45.16%
67.85%
72.57%
13.02%
12.91%
10.22%

1996
19.35%
31.16%
10.06%
68.84%
12.95%

Ratio:
Profit Margin (Net)
ROA
ROE

Ratio:
ROE
E/A
Cost of Debt
D/A
WACC

Relevant_Fin_Ratios

The Clarkson Lumber Company Documentation of Financial Analysis

Liability
NP to Holtz, current portion
Term loan, current portion
Term Loan
Northrup National Bank $750,000

Interest Calculation For 1996

Stated Rate
Subject To Interest Charge
11%
10%
10%
11%

$100.00
20.00
100.00
750.00

Interest
$11.00
2.00
10.00
82.50

1996_Interest_Calc

The Clarkson Lumber Company Documentation of Financial Analysis

Tax Bracket
$0-$50,000
$50,000-75,000
75,000-100,000
above 100,000

1996 Tax Liability

Rate
Taxable Amount
15%
25%
34%
39%

$50.00
25.00
25.00
51.14

Total Taxes Due

Tax Bill
$7.50
6.25
8.50
19.94

$42.19

1996_Taxes

The Clarkson Lumber Company Documentation of Financial Analysis

N10 Discount At 2% Savings

1995 Ending Inventory
1996 COGS
1996 Ending Inventory
1996 Purchases
1996 1st Qtr Inventory Purchases (Given in case)
Subject to N10 Discounts
Total Savings N10@2%

Ending Inventory Calculation For 1996

Cost of Goods Sold 1995
Average Inventory 1995
Inventory Turnover 1995
Cost of Goods Sold 1996
Ending Inventory 1996

$587.00
4,161.40
(619.23)
4,129.17
819.00
3,310.17
-$66.20

$3,424.00
509.50
6.72
4,161.40
$619.23

Purchase_Discount