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Garden

In:

Submitted By haozhang
Words 2548
Pages 11
1. Complete the 1992 columns of Tables 3 through 6, disregarding for now the projected

data in the 1993 and 1994 columns. If you are using the Lotus model, use it to complete the tables. Be sure you understand all the numbers, as it would be most embarrassing if you were asked how you got a particular number, and could not give a meaningful response. 2. Based on the information in the case and on the results of your calculations in Question 1.

prepare a list of Garden State’s strengths and weaknesses. In essence, you should look at the commonsized statements and each group of key ratios (for example, the liquidity ratios) and see what those ratios indicate about the company’s operations and financial condition. As part of your answer, use the extended Du Pont equation to highlight the key relationships. 3. Recognizing that you might want to revive your opinion later, does it appear, based on

your analysis to this point, that the bank should lend the requested money to Garden
State? Explain.

Table 3
CommonSized Balance Sheets for Years Ended December 31
1990
1991

1992

Assets:
Cash and marketable securities
Accounts receivable
Inventory

8.82%

5.13%

30.39
35.
36

3.37
%
30.9
1
50.3
9
83.9
5
22.9
3

6.88
16.0
5%
100.
00%

25.72
48.32

Current Assets
Land, buildings, plant, and equipment 74.55%

79.18%

30.78%

27.31%

Accumulated depreciation

5.32%

6.48%

Net fixed assets

25.45%

20.82%

Total assets

100.00%

100.00%

Table 4
CommonSize Income Statements for Years Ended December 31
1990
1991

Net sales

100.00%
80.52

82.18

19.48%

17.82%

Admin & selling expenses
Depreciation

7.30%
0.91

8.11%
0.88%

Miscellaneaous expenses

1.16%

1.88%

Total operating expenses

9.36%

10.86%

EBIT
Interest on shortterm

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