1. Prepare and analize the common statement for Anandam Manufacturing Company. Show all calculations. 2. Prepare and analize the cash flow statement for Anandam Manufacturing Company. Show all calculations. 3. Calculate the ratios based on case Exhibit 3. Show all calculations. Based on financial analysis of financial statements, would a loan officer grant a loan to Anandam financial company? EXHIBIT 3: INDUSTRY AVERAGE OF KEY RATIos Sector Average Ratio 2:301 Current ratio Acid test ratio (quick ratio) 120 Receivable tunover ratioimes turnover 52 days Receivable days Inventory turmover ratio Inventory days Long-term detttototal debt Debt-to-equity ratio Gross profit rato Net profit ratio Retun on equity Retum on total assets 4.85 times 75 days 24% 35% 40% 18% 22% 10% Total asset turnover ratio Ti Fixed asset turnover ratio Current asset tunover ratio3 interest coverage ratio (tmes 10 nterest earned Warking captal smover ratio Retu on ed sset Solution 1….Common -size Income statement 2012-13 % to Total sales 2013-14 % to Total sales 2014-15 % to Total sales Analysis of % to Total sales proportion Sales Cash 200 10.00% 480 10.00% 800 10.00% Credit 1800 90.00% 4320 90.00% 7200 90.00% Total Sales 2000 100.00% 4800 100.00% 8000 100.00% COGS 1240 62.00% 2832 59.00% 4800 60.00% COGS has reduced in the last 2 yrs. Gross profit 760 38.00% 1968 41.00% 3200 40.00% so, G/P has increased Operating Expenses: Gen.adm.& sell.exp. 80 4.00% 450 9.38% 1000 12.50% % to sales has doubled in 2013-14 & increased by more than 25% in 2014-15 Depreciation 100 5.00% 400 8.33% 660 8.25% Has increased by 3% in the last 2 yrs. Int.exp.(on borrowings) 60 3.00% 158 3.29% 340 4.25% Has slightly increased in 2014-15 Profit before tax(PBT) 520 26.00% 960 20.00% 1200 15.00% PBT% has reduced gradually in both the yrs.due to increase in all operating expenses esp.gen admn.& sell exp. Tax at 30% 156 7.80% 288 6.00% 360 4.50% Decrease % due to decrease in profit % Profit after tax(PAT) 364 18.20% 672 14.00% 840 10.50% PAT% has reduced gradually in both the yrs.due to increase in all operating expenses esp.gen admn.& sell exp. Common-size Balance Sheet Assets % to Total % to Total % to Total Fixed assets(net of dep) 1900 74.22% 2500 44.64% 4700 51.33% Assets have decreased to the total Current assets Cash & Cash equivalents 40 1.56% 100 1.79% 106 1.16% Slight variation in ratio to total Accounts Receivables 300 11.72% 1500 26.79% 2100 22.94% Has increased in 2013-14 & again decreased in 2014-15 Inventories 320 12.50% 1500 26.79% 2250 24.57% Has increased in 2013-14 & again decreased in 2014-15 Total 2560 100.00% 5600 100.00% 9156 100.00% Equity & Liabilities Equity share capital($ 10) 1200 46.88% 1600 28.57% 2000 21.84% Decreased steadily in all the 2 yrs. Reserves & surplus 364 14.22% 1036 18.50% 1876 20.49% Increased steadily in both 2 yrs.due to increase in $ net income in those yrs. Long-term borrowings 736 28.75% 1236 22.07% 2500 27.30% Decreased in 2013-14 & again increased i.