BUSN460 Senior Project

Individual Financial Analysis Project (CanGo)

Week 3

Assumptions:

Balance Sheet

ASSETSDecember 31, 2009Cash$20,900,000Marketable Securities$117,000,000Accounts Receivable$33,000,000Less: Allowance for Bad Debts$(880,000)Net Accounts Receivable$32,120,000InventoryRaw Materials$2,000,000Work-in-process$1,000,000Finished Goods$5,000,000Inventory Purchased for Resale$24,000,000Total Inventory$32,000,000Plant, Property and Equipment$6,700,000Less: Accumulated Depreciation$(320,000)Net Plant, Property and Equipment$6,380,000Prepaid Expenses$200,000Goodwill and Other Purchased Intangibles$28,000,000Less: Amortization$(700,000)Net Goodwill and Other Purchased Intangibles$27,300,000Total Assets$235,900,000LIABILITIES AND OWNERS’ EQUITYAccounts Payable $22,000,000Accrued Advertising $11,800,000Other Liabilities and Accrued Expense$1,400,000Current Portion of Long-Term Debt$2,300,000Long Term Debt$57,400,000Preferred Stock, $100 par value per share, 100,000 authorized, 0 shares issued and outstanding$0Common Stock, $1 par value per share, 250,000,000 shares authorized, 13,000,000 shares issued, 12,900,000 outstanding$13,000,000Additional Paid-in-Capital in excess of par value, Common Stock$117,000,000Treasury Stock$(1,000,000)Retained Earnings (less Cash Dividends Paid)$12,000,000$11,000,000Total Liabilities and Owner’s Equity$235,900,000

Income Statement

December 31, 2009December 31, 2008Sales Revenues$51,000,000$10,300,000Less: Sales Returns$(1,000,000)$(300,000)Net Sales Revenues$50,000,000$10,000,000Less: Cost of Goods Sold$(9,000,000)$(4,000,000)Gross Profit$41,000,000$6,000,000Operating Expenses:Advertising and Sales$(26,000,000)$(3,000,000)Depreciation$(160,000)Salaries and Wages$(1,700,000)$(1,400,000)Product Development$(4,000,000)$(1,200,000)Merger and Acquisition Related Costs, including Amortization of Goodwill and Other Intangibles$(700,000)$0Total Operating Expenses$(32,560,000)Income from Continuing Operations Before Income Taxes$8,440,000Less: Income Taxes at 35%$(2,954,000)Income from Continuing Operations$5,486,000Discontinued Operations:Income from Operations of Discontinued Division (less applicable income taxes)$350,000Loss on Disposal of Discontinued Division (less applicable income taxes)$(150,000)Total Gain from Discontinued Operations$200,000Extraordinary Items:Loss from fire (less applicable income taxes)$(200,000)Net Income

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