Yoda Muba has finally decided to manage his investment portfolio himself and is considering the company Sativi to possib

[answerhappygod]

Yoda Muba has finally decided to manage his investment portfolio
himself and is considering the company Sativi to possibly invest in
it. The company publishes its financial statements on its website,
and Yoda decides to analyze certain elements before deciding
whether to invest in it or not.
Work to do:
a) Using the balance sheet (appendix A) and the income statement
(appendix B) for the years 2016 and 2017, establish the financial
statements as a percentage of the company Sativi:
- Balance sheet as a percentage (%) of total assets and comment
on it (maximum 50 words)
- Statement of earnings as a percentage (%) of sales and comment
on it (maximum 50 words)
b) Calculate the various ratios listed in appendix C for the
years 2016 and 2017. Perform the financial analysis by the ratios,
indicating the strengths and weaknesses of the Sativi company (do
your analysis in the order around the following ratios: liquidity,
management, indebtedness and profitability).
c) Do the financial analysis using the DuPont system for the ROE
only of the company Sativi by making a comparison over time
(2016-2017) and a comparison with the sector. Comment on your
results, highlighting the trends observed on this profitability
indicator, ROE. Do you think Yoda should invest in this company?
Why?
appendix A
Sativi balance sheet (in thousands of dollars) as of
December 31
2016
2017
Cash
18,460$
7,150$
Accounts
38,990$
42,024$
Inventory
54,109$
106,891$
Total current assets
111,559$
156,065$
Net fixed assets
105,284$
138,151$
Total assets
216,843$
294,216$
Accounts payable
34,948$
35,746$
Notes payable (bank)
31,993$
36,415$
Total current liabilities
66,941$
72,161$
Long-term debt
96,590$
165,700$
Total liabilities
163,531$
237,861$
Common shares
18,850$
18,850$
Retained earnings
34,462$
37,505$
Total shareholders' equity
53,312$
56,355$
Total liabilities and shareholders' equity
216,843$
294,216$
appendix B
Income statement (in thousands of dollars) as at
December 31
2016
2017
Sales
261 429$
313 715$
Cost of goods sold
235 671$
281 824$
Amortization
12 939$
16 312$
Earnings before interest and taxes
12 819$
15 579$
Interest paid
4 940$
6 240$
Profit before tax
7 879$
9 339$
Tax (30%)
2 364$
2 802$
Net profit
5 515$
6 537$
Appendix C (to be completed to answer question
2)
2016
2017
Industry average
Liquidity ratios
Working capital ratio
1.75
Immediate cash ratio
0.90
Management ratios
Inventory turnover
2.90
Accounts receivable turnover
8.55
Total asset turnover
1.15
Debt ratios
Debt-to-equity ratio
1.40
Total liabilities / total assets
65%
Interest coverage ratio
4.5
Profitability ratios
Gross profit margin ratio
15.3%
Net profit margin ratio
4.2%
Return on shareholders' equity - ROE
9.7%