OM Explorer

Solver – Financial Measures Analyzer

This solver calculates the changes to major financial performance measures as a result of changes to entries in the
Income or Balance Sheet statements. The information provided on the Ratios page is useful in assessing the
impact a change in supply chain operations.

Data can be entered on the Income and Balance Sheet statements in two areas. The “Without Shock” column
contains the current data for a firm. Data in the white boxes can be made to reflect the circumstances in any firm.
Entries in the “Shock” column register net changes to the current situation for any item in the Income or Balance
Sheet statements. These entries would likely be the estimates managers have regarding the cost implications of
proposed changes to supply chain operations. The “With Shock” column shows the net effect of the shocks to the
current Income and Balance Sheet statements. See the Ratios page for the impact on financial performance
measures.
 Without Shock Shock With Shock
Inc. Stmt. $ 000's $ 000's $ 000's $ 000's

Revenue $33,074 $4,500 $37,574

Cost of Goods Sold

Shipping costs $8,931 $950 $9,881 ###
Direct materials $5,963 $360 $6,323 ###
Direct Labor & other $6,726 $410 $7,136 ###
Total $21,620 $23,340 ###

Gross Profit $11,454 $14,234

Operating Expenses
Selling Expenses $2,232 $2,232
Fixed Expenses $2,620 $2,620
Depreciation $1,794 $1,794
Total $6,646 $6,646

Earnings Before Interest and Taxes $4,808 $7,588

Interest Expense $890 $1,280 $2,170 ###

Earnings Before Taxes $3,918 $5,418

Taxes @ 40% $1,567 $2,167 ###

Net Income $2,351 $3,251

Dividends $0 $0

Contribution to Retained Earnings $2,351 $3,251

# of Shares Outstanding 350 350

Stock Price as of 1/31/2006 $5.00 $5.00
Balance Sheet

Assets Without Shock With Shock Liabilities Without Shock With Shock
Shock Shock
Current Assets Current Liabilities
Accounts Payable $2,582 $3,652 ###
Notes Payable $1,099 $1,099 ###
Inventory $6,789 $35 $7,209 Other Liabilities $2,859 $2,859
Total Inventory $6,789 $7,209
Total STL $6,540 $7,610
Cash $3,223 $3,223
Accounts Receivable $5,603 $950 $6,553 Long-term Liabilities
Other Current Assets $1,381 $1,381 Long-term Loans $7,523 $11,800 $19,323 ###
Total CA $16,996 $18,366 Bonds $0
Other Liabilities $0
Total LTL $7,523 $19,323
Long-term Assets
Property $3,179 $1,900 $5,079 Total Debt $14,063 $26,933
Plant and Equipment, net $8,995 $10,500 $19,495
Long-term Investments $1,000 $1,000 Equity $1,750 $1,750
Total LTA $13,174 $25,574 Common Stock $0
Paid-in-excess $428 $428
Total Assets $30,170 $43,940
Retained Earnings $13,929 $14,829 ###
Total Equity $16,107 $17,007

Total Debt & Equity $30,170 $43,940

DuPont Analysis Without Shock With Shock Change
ROE 14.6% 19.1% UP = Net Income / Equity
ROA 15.9% 17.3% UP = EBIT / Total Assets
NPM 7.1% 8.7% UP = Net Income / Sales
TATO 109.6% 85.5% DOWN = Sales / Total Assets

Operational Measures
Current ratio 2.60 2.41 DOWN = Current Assets / Current Operating Liabilities
Inventory Turns 3.2 3.2 UP = COGS / Inventory
WC to Sales 31.6% 28.6% DOWN = Operating WC / Sales
Fixed Asset Turnover 271.7% 152.9% DOWN = Sales / Net Property, Plant, Equipment
Liquidity
A/R Days 61.8 63.7 UP = Accounts Rec. / (Sales / 365) = # of days to collect credit charges
A/P Days 158.0 210.8 UP = Accounts Pay. / (Direct Materials / 365)
Inventory Days 114.6 112.7 DOWN = Inventory / (COGS / 365)
Cash Cycle 18.4 (34.4) DOWN = A/R Days - A/P Days + Inventory Days
Financial Performance
Debt- Asset Ratio 46.6% 61.3% UP = Debt / Total Assets
Debt-Equity Ratio 87.3% 158.4% UP = Debt / Equity
Times Interest Earned 5.40 3.50 DOWN = EBIT / Interest
Gross Profit Margin 34.6% 37.9% UP = Gross Profit / Sales
Materials % 27.6% 27.1% DOWN = Direct Materials / COGS
Labor % 31.1% 30.6% DOWN = Direct Labor / COGS
Stock Market Performance
EPS 6.72 9.29 UP = Earnings / # of shares outstanding
Earnings / Price 1.34 1.86 UP = EPS / Market Price
Market Value/ Book V 0.11 0.10 DOWN = Market Value / Book Value of Equity
 Ratios As Is Ahmed Sidra
ROE 17% 19.1% 17.2%
ROA 16% 17.3% 17.4%
NPM 9% 8.7% 8.6%
TATO 110% 85.5% 89.3% Ratios
Current ratio 2.60 2.41 3.39
Inventory Turns 3.2 3.2 3.6
WC to Sales 32% 28.6% 35.6% 100%
Fixed Asset Turnover 272% 152.9% 170.7% 80%
A/R Days 61.8 63.7 73.4 60%
A/P Days 158.0 210.8 55.5 40%
Inventory Days 114.6 112.7 101.5 20%
Cash Cycle 18.4 (34.4) 119.4 0%
E A M O o ns es er ys ys ys le o o ed in
Debt- Asset Ratio 47% 61.3% 55.2% RO RO NP TAT rati Tur Sal nov Da Da Da Cyc Rati Rati arn arg ials
nt y o ur R /P ry h t y E M r
Debt-Equity Ratio 87% 158.4% 123.0% rre tor C t t T A/ A nto Cas sse quit est ofit ate
Times Interest Earned 49.86 3.50 3.82 Cu ven W sse ve A
t- t-E te P
r r M
In A In eb Deb s In ross
d D
Gross Profit Margin 35% 37.9% 41.1% xe e
m G
Fi Ti
Materials % 28% 27.1% 32.2%
Labor % 31% 30.6% 29.2% As Is Ahmed Sidra
EPS 8.04 9.29 8.16
Earnings / Price 1.61 1.86 1.63
Market Value/ Book V 0.11 0.10 0.11
Current ratio
4.00

3.50
As Is Ahmed Sidra
Current ratio 2.60 2.41 3.39 3.00

2.50

2.00

1.50

1.00

0.50

0.00
As Is Ahmed
 Ratios Gross Profit Margin
42%

40%

38%

36%
s s s e o o d n S e V
ay Day Day ycl ati ati rne rgi ls % or % EP Pric ok 34%
P y C tR R a a ria b / Bo
r h y E M a
A/ nto Cas sse uit est fit ate L ngs ue/
q o i
ve - A -E er Pr M rn al 32%
In bt bt Int ss E a et V
De De es ro k
m G ar
Ti M 30%
1As Is 2 3
Ahmed Sidra
Ahmed Sidra
Gross Profit Margin

urrent ratio

Ahmed Sidra
3
Sidra