Case Study
AC503, Unit 4 1987 1986 1985 1984
Current Assets Cash 3.2 10.4 34 3.8 Short Term Investments 41.4 21.1 - - Receivables 3.6 1.8 4.2 7.1 Merchandise Inventories 37 47.2 40.5 63.8 Prepaid Expenses 3.6 1.9 1 1.4 Total Current Assets 88.8 82.4 79.7 76.1
Restricted Cash - 2.6 10.8 -
Due from Affiliates - - - 15.7
Property, Plant, & Equipment 9 5.7 5.6 5
Construction in Process - 4.9 1.8 -
Other Assets 2.2 4.4 2.1 3.2 Total Assets 100 100 100 100

Current Liabilities Accounts Payable 17 40.7 35.2 55 Notes Payable - - - 8 Short-Term Debt 16.8 1.8 0.7 0.3 Unearned Revenue 1.2 2.9 1.8 2.1 Accrued Expenses 1.9 13.5 13.3 16.6 Total Current Liabilities 36.9 58.9 51 82

Long-Term Debt 2.9 6.1 11.6 0.1
Convertible Bonds 27.5 - - -
Unearned Revenue 1.1 1.5 1 0.9
Stockholders’ Equity Common Stock 0.1 0.2 0.2 0.1 Additional Paid-In-Capital 19.5 13.9 18.8 1.6 Retained Earnings 12 19.4 17.4 15.3
Total Equity 31.6 33.5 36.4 17
Total Liability & Equity 100 100 100 100

Net Sales 100 100 100 100
Cost of Goods Sold 77.2 74.1 75.9 77.9
Gross Profit 22.8 25.9 24.1 22.1
SG&A 17.4 16.4 15 16.4
Interest & Other Income 2.1 1.2 0.9 0.5
Interest Expense 1.5 0.3 0.3 0.4
Income before Taxes 6 10.4 9.7 5.8
Pension Contribution 0.1 0.3 0.4 -
Income Taxes 2.9 5.1 5 3.1 Net Income 3 5 4.3 2.7

Financial Crazy Eddie Ratios:

1987 1986
Current Ratio 2.41 1.4
Quick Ratio 1.4 0.6 Debt to Assets 0.68 0.66