Mr. Jones‚ A recent evaluation of Jones Electrical Distribution has occurred in request of a loan. An assessment of the company’s financial health shows that it is profitable. The shortage in cash flows regards managerial attention. Since Jones opened in 1999 the company has seen rapid growth in a highly competitive field. General contractors and electricians have preferred Jones for their business. The request for this loan also has occurred at the end of March; past patterns show that your
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Jones Distribution Case Finance Team -13 Executive Summary: The Company Jones Electrical Distribution was founded in 1997. The company distributes and wholesales electrical components. It is a sole proprietorship owned by Nelson Jones who is looking for a new banking relationship that will allow him to receive a larger loan to sustain his business. Even though the company has been turning in profits‚ the ineffective collection practice‚ not availing trade discounts on time and ineffective
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Operating Statement To create the pro forma operating statement we used ratios of COGS/Sales and Operating Expense/Sales for years 2004‚ 2005‚ and 2006. We then took the average of these ratios and multiplied them by sales for 2007 to come up with 2007 COGS and Operating Expenses. To calculate interest expense we included the outstanding loan Jones has with Verden and the new line of credit he would be taking out with Southern Bank and Trust. We calculated Verden’s interest expense by multiplying
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network for supplying this electrical power is known commonly as the National Grid. The National Grid is an electric power transmission network which connects the substations and power stations. This is so that any electrical energy generated in Great Britain‚ can be utilized and help meet energy demands elsewhere. This grid system also includes interconnections that run under the sea to Northern Ireland HVDC Moyle‚ the Isle of Man and France HVDC Cross-Channel. The electrical energy generated for the
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CHAPTER 3 TUTORIAL SOLUTIONS 21. Assuming costs vary with sales and a 20 percent increase in sales‚ the pro forma income statement will look like this: MOOSE TOURS INC. Pro Forma Income Statement Sales $ 1‚114‚800 Costs 867‚600 Other expenses 22‚800 EBIT $ 224‚400 Interest 14‚000 Taxable income $ 210‚400 Taxes(35%) 73‚640 Net income $ 136‚760 The payout ratio is constant‚ so the dividends
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Analyzing Pro Forma Statements FIN/571 David Binder October 20‚ 2014 XYZ Inc. In order to create an initiative for growth‚ an analysis of the company ’s short term and long term financing needs are assessed to determine strategies for the company to manage working capital. The suggested initiative to increase XYZ Company‚ Inc. revenue over the next five years is by acquiring assets through a merger with UVW Company to produce more of product X. Companies must be able to manage growth either
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Analyzing Pro Forma Statements FIN 571 Kent Kelly February 2‚ 2015 Suzanne Elliot Financial statements that are prepared by a company to consider the effects of potential activity is considered a pro forma statements. A financial statement shows the projected or forecast of operating results and balance sheet‚ and statement of cash flows. The company XYZ Company Inc. is planning to expand their company in the next five years. This paper will review and discuss XYZ’s Company’s five year plan
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Pro forma statement analysis The outputs from the financial planning model are projected financial statements called pro forma financial statements. In finance and accounting‚ the term pro forma means forecasted or projected (Parrino‚ 2012). These statements are prepared on the basis of the inputs and assumptions that are fed into the financial model. This paper presents an analysis of the pro forma income statement and pro forma balance sheet of a fictitious company called XYZ Company inc. Appendix
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Selected Companies Pro Forma Apple has become very successful in the technology industry. The company has increased its net sales from 2006 to 2007‚ which proves they are making good capital budgeting decisions. A pro forma income statement and balance sheet showing the future planning and growth of a company. The pro forma income statement and balance sheet will explain a cash budget‚ underlying assumptions of calculations‚ calculations of different ratio analysis‚ and make recommendations to management
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Case Study - “Jones Electrical” 2. – Why this profitable company needs a bank loan? As we can see from the figures and the information given in the present case‚ the company is very profitable due to the ambition and well management done by its owner Mr. Jones. In this regard‚ we can see in “Table 2 in the spreadsheet”‚ that the company is taking advantage of the 2% discount offered by suppliers saving around $75‚000.00 per year. We have to pay especial attention to the agreement reached with
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