Questions for Consideration When Preparing Cases
1. Use a spreadsheet program such as excel. Keep all numbers for a particular year in the same column. 2. Prepare two indirect statements of cash flows. One for 2004-2005 and one for 2005-2006. 3. Calculate common sized income statements for each year.
4. Calculate all financial ratios. Use “A Basic Set of Financial Ratios” from Desire2Learn as a guide. 5. Identify the major factors influencing Riley’s cash flow. Use the cash flow statements along with the common sized income statements and ratios. 6. What is the length of Riley’s cash conversion cycle? How long does it take for Riley to go from spending cash to receiving it? Why? 7. What are the implications of Riley’s cash flow for the financing needs of the firm.
Panera Bread Co.
1. Use Excel to compile Indirect Statement of Cash Flows, Common-Size Income Statement and Financial Ratios for each year. 2. How do you assess the strength of Panera’s marketing?
3. What have been the key drivers for Panera’s cash flow from operations? 4. Is this company liquid?
5. Is this an asset intensive business? Why or why not?
6. Is the leverage risk high?
7. What is the source of Panera’s profitability? Is it good?
Ignore exhibits 1, 2 and 5 in the case. Use the set of ratios and the definitions for those ratios that we have discussed in class. Any data needed for industry comparisons must be generated by you.
1. Do the standard set of analytics: common-size income statements, indirect statements of cash flows, and financial ratios for all years. 2. What was California Choppers condition in 2000? How has it changed over the six year period? 3. Have all of the company’s initiatives been successful?
4. How would you evaluate the human resource aspects of the company?
Wiegandt GmbH Cologne
1. Although the case is titled Wiegandt, it is really about two other companies. Your analysis should be about Haefren Baum. Confine your work to Haefren Baum only—do not do Backhaus or Wiegandt GmbH Cologne itself.
2. Analyze intensively the balance sheet and income statements of Haefren Baum. Start by computing cash flow statements, financial ratios (remember the proper format from the ratio teaching note), and common‐size income statements (always use net sales) for all years. Also use net sales when sales are called for in a ratio. Land should be included as part of NFA in any ratio calculation. Identify the strengths and weaknesses of the company. Do not do any calculations or analysis for Backhaus.
3. There are a few unusual accounts. Due from stockholders is a loan by the business to stockholders (note that it is an asset). Earned surplus is the same thing as retained earnings.
4. Exhibit 2 is an aging for Wiegandt’s accounts receivable to Haefren Baum and Backhaus. Since it reflects Wiegandt’s accounts receivable to Haefren Baum and Backhaus, it also reflects Hafren Baum’s and Backhaus’ accounts payable to Wiegandt.
5. Haefren Baum’s income statement stops at net profit before tax. Treat that as net income in all of your calculations.
6. How strong is the company's balance sheet? How about its income statement? Why?
7. What action should be taken by the credit department of Wiegandt GmbH Cologne?
8. You are now ready to write your business analysis. Make sure you attach a copy of your cash flow statements to your report.
Jones Electrical Distribution
1. Analyze Jones Electrical to identify its strengths and weaknesses. Calculate all relevant analysis tools for all years using a spreadsheet.
2. Ignore the 2007, first quarter data and exhibit 3.
3. Net worth is the same thing as the total equity of the company (common or capital stock, paid-in-capital in excess of par, and retained earnings). It is unlikely that the common stock or paid-in-capital in excess of par have changed over the period.
4. What is the current condition...
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