Assuming the role of Sarah McIvor, CA, prepare a memorandum (1 to 2 pages) that analyzes

Assignment Questions

1. Assuming the role of Sarah McIvor, CA, prepare a memorandum (1 to 2 pages) that analyzes the financial condition of Gemini Electronics and makes recommendations relating to the company's desired expansion. The memo should be divided into sections describing liquidity, asset management, long-term debt paying ability, profitability and recommendations.

2. Prepare the following financial exhibits for 2005 through 2009:

· Ratio table

· Vertical analysis of income statements and balance sheets (For Income Statement, divide all items in a year by Sales; for Balance Sheet, divide by Total Assets.

· Horizontal analysis (index numbers) of income statements and balance sheets (Divide line-item values in a year by the base year value.)

· Cash flow statements (2006 through 2009)*

· Five-part analysis of ROE (EBIT/Sales, EBT/EBIT, NI/EBT, Total Asset Turnover, Debt Ratio (%), ROE (%) for 2005 - 2009.
 

Note: All ratios should use year-end totals and not averages
 
*Cash Flow Structure (2006 - 2009)

Operations

Net Income

Add/Minus: (just a label)

Depreciation (Amortization)

Accounts Receivable

Parts Inventory

WIP Inventory

FG Inventory

Accounts Payable

Total

Investing

LPE

Other Assets

Total

Financing

Long-term Debt

Total

Change in Cash