It doesn't have a reference style...I just put harvard so I could place the order. It could be best if its done in Excel. Thank you!
JAMES A. WOODS, S.J., COLLEGE OF ADVANCING STUDIES FINANCIAL ACCOUTNING – FALL 2022 OCTOBER 6, 2022 CASE – DUE OCTOBER 20, 2022 You are the CFO for KW, LLC, a seller of low price point affordable apparel which operates a series of retail stores on the west coast along with a wholesale business in which they sell to retailers. The owner and founder of the Company has asked you to perform some analysis on the last three years of the financial statements as a special project. Her request has come about because the Company's bank is concerned with the financial stability of the Company and the trend of the most recent financial reporting. In particular, the bank has concerns when comparing the operating results of the Company and MW, Inc., one of the Company’s largest competitors. The financial statements are included on the following pages. Since MW, Inc. is a publicly traded company, the financial statements for that company is also available to be able to compare and contrast. To summarize, the owner has requested you do the following: 1. Vertical and horizontal analysis on both balance sheets and income statements. 2. Calculate the following ratios for all three years for both KW, LLC and MW, Inc.: a. Current ratio b. Receivable turnover and Average days’ sales uncollected (assume 75% of sales are credit sales for both the Company and competitor) c. Inventory turnover and Average days of inventory d. Payable turnover and Average days’ to pay e. Gross margin percentage f. Net income percentage Beyond performing the calculations, prepare a memo that you will provide to the owner commenting on the factors as to why you think the bank is warranted (or not) in their concerns. Include data from the calculations and an overall review of the trends of the financial statements to support your position. Round decimals to two places. 202120202019 Current assets: Cash and cash equivalents$1,450,000 $1,500,000 $1,375,000 Accounts receivable3,600,000 2,800,000 2,000,000 Inventory1,500,000 1,320,000 950,000 Prepaid expenses100,000 80,000 70,000 Total current assets6,650,000 5,700,000 4,395,000 Property, plant and equipment, net of accumulated depreciation1,280,000 1,210,000 1,150,000 Other assets120,000 65,000 32,000 Total assets$8,050,000 $6,975,000 $5,577,000 Current liabilities: Current portion of long-term debt$1,900,000 $1,460,000 $1,075,000 Accounts payable 2,300,000 1,850,000 1,450,000 Accrued expenses 585,000 560,000 530,000 Total current liabilities4,785,000 3,870,000 3,055,000 Long-term debt2,200,000 1,800,000 1,250,000 Total liabilities6,985,000 5,670,000 4,305,000 Stockholders' equity1,065,000 1,305,000 1,272,000 Total liabilities and stockholders' equity$8,050,000 $6,975,000 $5,577,000 At December 31 Balance Sheets KW LLC Assets Liabilities and Stockholders' Equity 12/31/18 Accounts receivable – 1,700,000 12/31/18 Inventory – 850,000 12/31/18 Accounts Payable – 975,000 202120202019 Current assets: Cash and cash equivalents$1,500,000 $1,400,000 $1,350,000 Accounts receivable1,875,000 1,980,000 1,875,000 Inventory1,250,000 1,150,000 1,050,000 Prepaid expenses290,000 250,000 280,000 Total current assets4,915,000 4,780,000 4,555,000 Property, plant and equipment, net of accumulated depreciation1,350,000 1,275,000 1,200,000 Other assets40,000 30,000 25,000 Total assets$6,305,000 $6,085,000 $5,780,000 Current liabilities: Current portion of long-term debt$1,445,000 $1,475,000 $1,425,000 Accounts payable 875,000 720,000 875,000 Accrued expenses 675,000 650,000 660,000 Total current liabilities2,995,000 2,845,000 2,960,000 Long-term debt1,650,000 1,750,000 1,520,000 Total liabilities4,645,000 4,595,000 4,480,000 Stockholders' equity1,660,000 1,490,000 1,300,000 Total liabilities and stockholders' equity$6,305,000 $6,085,000 $5,780,000 MW Inc. Balance Sheets At December 31 Assets Liabilities and Stockholders' Equity 12/31/18 Accounts receivable – 950,000 12/31/18 Inventory – 975,000 12/31/18 Accounts Payable – 1,175,000 202120202019 Net sales$30,000,000 $28,200,000 $26,090,000 Cost of sales18,100,000 16,200,000 14,500,000 Gross profit11,900,000 12,000,000 11,590,000 Selling, general and administrative costs 10,605,000 8,560,000 8,750,000 Operating income1,295,000 3,440,000 2,840,000 Other expense(5,000) (23,000) (18,000) Income before income taxes1,290,000 3,417,000 2,822,000 Income tax expense 101,000 135,000 130,000 Net income$1,189,000 $3,282,000 $2,692,000 For the Year Ended December 31 Income Statements KW LLC 202120202019 Net sales$31,121,000 $27,023,000 $26,552,000 Cost of sales23,720,000 21,150,000 20,850,000 Gross profit7,401,000 5,873,000 5,702,000 Selling, general and administrative costs 1,670,000 1,285,000 1,260,000 Operating income5,731,000 4,588,000 4,442,000 Other expense(95,900) (75,345) (60,000) Income before income taxes5,635,100 4,512,655 4,382,000 Income tax expense 225,000 165,000 133,005 Net income$5,410,100 $4,347,655 $4,248,995 MW Inc. Income Statements For the Year Ended December 31