The Sophisticated Touch, Co., a catering company, wants to evaluate its historical financial data over the last five years.
a) Set up a ratio worksheet similar to Exhibit 3-6, page 92, and calculate all of the ratios for The Sophisticated Touch, Co.
b) Verify the change in 2017 Sophisticated Touch, Co.’s ROE using the Du Pont method.
c) Using the Altman’s model for privately held firms and public ones, calculate the Z-score for The Sophisticated Touch, Co. Assume that the market value of equity is $1,500,000; $1,250,000; $1,000,000; $850,000; and $700,000 for the years 2017, 2016, 2015, 2014, and 2013 respectively.
d) Calculate the economic profit for these years and compare it to net income. Assume that the WACC is 12% each year.
e) The staff at The Sophisticated Touch, Co. wants to perform a trend analysis with the data generated in the previous sections of this problem. Create a line chart showing each category of ratios from 2013 to 2017. Make sure to title the chart and label the axes. Also make a line chart of the Altman’s model for private and public firms from 2013 to 2017.
You might also like to view...
When your intended message is sent accurately in the least amount of time, you are a(n)
A. economical communicator. B. efficient communicator. C. formal communicator. D. collaborative communicator. E. effective communicator.
Muriel, (who, whom) I have known for many years, is the owner of the travel agency
What will be an ideal response?
Discuss the principles to be followed when preparing persuasive messages
For a single server, single queue system with an arrival rate of 8 customers per hour and a service rate of 10 customers per hour, what is the mean waiting time in the System (to two decimal places)?
a. 0.40 hours b. 0.50 hours c. 3.20 hours d. Cannot be determined from the information given