Student Name Student Number
| Student Name |
|
|
Student Number |
| Dudley Huckle repairs a variety of keyboard instruments from his shop in Belleville, ON. He started out on his own two years ago after buying the business of his mentor, Ludwig Mozart. The business employs 6 piano repair techs, plus Dudley. Currently, they tune and fix pianos in eastern Ontario, but Dudley believes the business can grow if he hires some new employees and opens a new office closer to Toronto. The Actual results from his first two years in operation are shown below, plus Dudley’s plan for next year, which includes an expansion of the business. |
| Financial |
| Compare your Actual results to last year’s Actual results, and |
|
Compare this year’s actual results to Next Year’s Plan |
| As at: |
Actual results: |
|
|
Next year |
% Change: |
|
|
GRADE |
| Date |
This year |
Last year |
Increase or (Decrease) % |
Plan |
Next year Plan vs This Yr Actual |
| Balance sheet |
| Cash |
$ 28,138 |
$ 48,375 |
|
$ 73,217 |
| Receivables |
127,500 |
42,000 |
|
102,610 |
| Inventory |
53,125 |
43,000 |
|
40,625 |
| Total current assets |
| Long-term Assets |
| Property, Plant, Equip |
370,625 |
215,625 |
|
547,500 |
| Other assets |
25,000 |
18,750 |
|
26,250 |
| Total assets |
| Current liabilities |
$ 130,201 |
$ 49,000 |
|
$ 180,049 |
| Long term liabilities |
265,625 |
118,750 |
|
394,687 |
| Equity |
208,562 |
200,000 |
|
215,466 |
| Total liabilities and equity |
| Income statement |
| Sales Revenue |
$ 906,250 |
$ 859,375 |
|
$ 1,208,000 |
| Cost of goods sold |
171,875 |
153,125 |
|
237,500 |
| Gross profit (0.5 marks) |
|
|
|
|
|
0.5 marks |
|
0.5 |
| Operating Expenses: |
| Salaries |
352,375 |
346,875 |
|
469,833 |
| Rent/occupancy |
89,375 |
84,225 |
|
115,000 |
| Equipment Rental |
18,100 |
34,375 |
|
9,520 |
| Marketing and Sales |
42,375 |
40,625 |
|
75,250 |
| Travel |
43,125 |
34,375 |
|
61,000 |
| Office expenses |
87,500 |
84,375 |
|
98,250 |
| Other operating expenses |
15,610 |
21,875 |
|
18,400 |
| Depreciation |
62,500 |
37,500 |
|
93,250 |
| Operating Income (EBIT) |
| Interest/financing fees |
13,342 |
3,750 |
|
21,875 |
| Income Before Tax (EBT) (0.5 marks) |
|
|
|
|
|
0.5 marks |
|
0.5 |
| Income Taxes (=15% of positive EBT) |
| Net income (0.5 marks) |
|
|
|
|
|
0.5 marks |
|
0.5 |
| Cash Flow from Operations (0.5 marks) |
|
|
|
|
|
0.5 marks |
|
0.5 |
| Financial ratios (3 marks) |
This year |
Last year |
Potential Questions |
Next Year Plan |
| Gross margin |
|
|
– Are your products properly priced to cover your operating costs? |
| Operating Margin |
|
|
– Does the business make an adequate return before financing costs and taxes? |
LET THE PROFESSIONALS WRITE YOUR PAPER!
