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    Clarkson Lumber Co Calculations1560944145

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    laura
    The document provides financial information for Clarkson Lumber Company for the years 1993-1995 and the first quarter of 1996. It includes income statements, balance sheets, ratio analyses, sources and uses of funds statements, cash flow statements, and information on cash cycles. The company saw increasing net sales, costs of goods sold, and profits over this period. Key ratios like profit margins, current ratios, and returns on assets and equity remained mostly steady. Assets and liabilities also increased steadily as the business grew.

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    Clarkson Lumber Co Calculations1560944145

    Uploaded by

    laura
    238 views9 pages
    The document provides financial information for Clarkson Lumber Company for the years 1993-1995 and the first quarter of 1996. It includes income statements, balance sheets, ratio analyses, sources and uses of funds statements, cash flow statements, and information on cash cycles. The company saw increasing net sales, costs of goods sold, and profits over this period. Key ratios like profit margins, current ratios, and returns on assets and equity remained mostly steady. Assets and liabilities also increased steadily as the business grew.

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    The document provides financial information for Clarkson Lumber Company for the years 1993-1995 and the first quarter of 1996. It includes income statements, balance sheets, ratio analyses, sources and uses of funds statements, cash flow statements, and information on cash cycles. The company saw increasing net sales, costs of goods sold, and profits over this period. Key ratios like profit margins, current ratios, and returns on assets and equity remained mostly steady. Assets and liabilities also increased steadily as the business grew.

    Copyright:

    © All Rights Reserved
    Download as XLS, PDF, TXT or read online from Scribd
    Download as xls, pdf, or txt
    238 views9 pages

    Clarkson Lumber Co Calculations1560944145

    Uploaded by

    laura
    The document provides financial information for Clarkson Lumber Company for the years 1993-1995 and the first quarter of 1996. It includes income statements, balance sheets, ratio analyses, sources and uses of funds statements, cash flow statements, and information on cash cycles. The company saw increasing net sales, costs of goods sold, and profits over this period. Key ratios like profit margins, current ratios, and returns on assets and equity remained mostly steady. Assets and liabilities also increased steadily as the business grew.

    Copyright:

    © All Rights Reserved
    Download as XLS, PDF, TXT or read online from Scribd
    Download as xls, pdf, or txt
    of 9
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    The documents provide financial statements and analysis for Clarkson Lumber Company for the years 1993-1995 and the first quarter of 1996. The information includes income statements, balance sheets, ratio analysis, sources and uses of funds statements, and cash flow statements.

    The company saw growth in net sales, costs, and profits over the periods reported. Key financial ratios like return on assets and equity trended down slightly between 1993-1995.

    Working capital and accounts receivable increased while inventory turnover decreased, lengthening the cash conversion cycle. Cash flow from operations was negative over 1993-1995 due primarily to increases in working capital needs driven by sales growth.

    Butler Lumber Company

    CLARKSON LUMBER COMPANY


    Operating Expenses for Years Ending December 31, 1993-1995, and
    for First Quarter 1996
    1st Qtr
    1993 1994 1995 1996
    $'000 $'000 $'000 $'000
    Net sales $2,921 $3,477 $4,519 $1,062
    Cost of goods sold:
    Beginning inventory $330 $337 $432 $587
    Purchases $2,209 $2,729 $3,579 $819
    $2,539 $3,066 $4,011 $1,406
    Ending inventory $337 $432 $587 $607
    Total cost of goods sol $2,202 $2,634 $3,424 $799
    Gross Profit $719 $843 $1,095 $263

    Operating expenses $622 $717 $940 $244


    Interest expense $23 $42 $56 $13
    Net income before inco $74 $84 $99 $6
    Provision for income ta $14 $16 $22 $1
    Net income $60 $68 $77 $5
    Butler Lumber Company

    CLARKSON LUMBER COMPANY


    Balance Sheets at December 31, 1993-95, and March 31, 1996
    1st Qrtr
    1993 1994 1995 1996
    $'000 $'000 $'000 $'000
    Cash 43 52 56 53
    Accounts receivable, net 306 411 606 583
    Inventory 337 432 587 607
    Current assets 686 895 1,249 1,243
    Property, net 233 262 388 384
    Total assets 919 1,157 1,637 1,627

    Notes payable, bank - 60 390 399


    Notes payable, Holtz (curre - 100 100 100
    Notes payable, trade - - 127 123
    Accounts payable 213 340 376 364
    Accrued expenses 42 45 75 67
    Term loan, current portion 20 20 20 20
    Current liabilities 275 565 1,088 1,073
    Term loan 140 120 100 100
    Note payable, Mr. Holtz - 100 - -
    Total liabilities 415 785 1,188 1,173
    Net worth 504 372 449 454
    Total liabilities & net wor 919 1,157 1,637 1,627
    CLARKSON LUMBER COMPANY
    Ratio Analysis from 1993 through 1995
    1993 1994 1995 Average
    Percent of sales
    Purchases 75.6% 78.5% 79.2% 77.8%
    Cost of goods sold 75.4% 75.8% 75.8% 75.6%
    Operating expenses 21.3% 20.6% 20.8% 20.9%
    Profit Margin 2.1% 2.0% 1.7% 1.9%
    Cash 1.5% 1.5% 1.2% 1.4%
    Accounts receivable 10.5% 11.8% 13.4% 11.9%
    Inventory 11.5% 12.4% 13.0% 12.3%
    Fixed assets (net) 8.0% 7.5% 8.6% 8.0%
    Total assets 31.5% 33.3% 36.2% 33.7%

    Percent of total assets


    Current liabilities 29.9% 48.8% 66.5% 48.4%
    Long-term liabilities 15.2% 19.0% 6.1% 13.5%
    Equity 54.8% 32.2% 27.4% 38.1%

    Current ratio 2.49 1.58 1.15 1.74


    Return on sales 2.1% 2.0% 1.7% 1.9%
    Return on assets 6.5% 5.9% 4.7% 5.7%
    Return on equity 11.9% 18.3% 17.1% 15.8%
    CLARKSON LUMBER COMPANY
    Sources and Uses of Funds, 1993 - 1995, (thousands of dollars)

    1993 to 1994 1994 to 1995 1993 to 1995


    Sources of Funds: $'000 $'000 $'000 %
    Retained Earnings 68 77 145 16.9%
    Increase in Trade Payables 127 163 290 33.8%
    Increase in Accrued Expenses 3 30 33 3.8%
    Increase in Bank notes payable 60 330 390 45.5%
    Total Sources 258 600 858 ###

    Uses of Funds:
    Increase in Cash Account 9 4 13 1.5%
    Increase in Accounts Receivabl 105 195 300 35.0%
    Increase in Inventory 95 155 250 29.1%
    Increase in Fixed Asset Accoun 29 126 155 18.1%
    Buyout of Mr. Holtz - 100 100 11.7%
    Decrease in Long Term Debt 20 20 40 4.7%
    Total Uses 258 600 858 ###
    CLARKSON LUMBER COMPANY
    Cash Flow Statement, 1993 - 1995
    1994 1995 1993 to 1995
    Cash From Operations: $'000 $'000 $'000
    Retained Earnings $68 $77 $145
    Less:
    Change in Accounts Receivable $105 $195 $300
    Change in Inventory $95 $155 $250
    Add:
    Change in Trade Payables $127 $163 $290
    Change in Accrued Expenses $3 $30 $33

    Cash from Operations ($2) ($80) ($82)

    Cash from Investing


    For Fixed Assets ($29) ($126) ($155)

    Cash from Financing


    CLARKSON LUMBER COMPANY
    Cash to cash cycle (dollars)
    Change from
    1993 1995 1993 to 1995
    Average Daily Sales $8,003 $12,381 $4,378
    Average Collection Period: (AR Da 38.2 48.9 10.7
    Inventory Turnover 6.5 5.8 (0.7)
    Average Daily Purchases $6,052 $9,805 $3,753
    Days of Inventory 55.7 59.9 4.2
    Days of Payables (Trade Notes and 35.2 51.3 16.1
    Days Cash to Cash: 58.7 57.5 (1.2)

    Increase in AR due to $306,000 $606,000 $300,000


    Increased Average Collection Period: $85,707
    Increased Sales: $214,293

    Increase in Inventory due to $337,000 $587,000 $250,000


    Reduced Inventory Turnover: $25,303
    Increased Sales: $224,697

    Increase in Payables due to $213,000 $503,000 $290,000


    Slower Payment: $97,457
    Increased Purchases: $192,543

    Increase in Net Working Assets due $430,000 $690,000 $260,000


    Reduced Activity Ratios: $13,553
    Increased Operating Activity: $246,447
    Annualized Interest from = Discount % x 360
    Trade Discount 100%-Discount% Credit days- Discount days

    Annualized Interest from = 2% x 360 = 36.73%


    Trade Discount 100%-2% 30-10
    CLARKSON LUMBER COMPANY
    Projected income statement for 1996 (thousands of dollars)

    $'000
    Net sales
    Cost of goods sold:
    Beginning inventory $587
    Purchases (77.8% of sales) $4,279
    $4,866
    Ending inventory $708
    Total cost of goods sold (75.6% of sales)
    Gross Profit

    Purchase Discounts (2% Purchases)

    Operating expenses (20.9% of sales)


    Operating Profit
    Interest expense
    Net income before income taxes
    Provision for income taxes
    Net income
    CLARKSON LUMBER COMPANY
    Projected balance sheet for December 31, 1996 (thousands of dollars)

    $'000
    Assets:
    Cash (1.4% of sales) 77
    Accounts recievable, net (11.9% of sales) 655
    Inventory 708
    Current Assets 1,440
    Property, net (dollar amount) 410
    Total Assets 1,850

    Liabilities:
    Accounts payable (10 days of purchases) 117
    Accrued expenses (1.5% of sales) 83
    Long-term debt, current portion 20
    Bank note payable Err:522
    Current Liabilities Err:522

    Long-term debt 80
    Total Liabilities Err:522

    Net worth Err:522


    Total Liabilities plus net worth 1,850

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