Problem1. Refer to the following [20 marks ]
Bacon Signs
2013 Income Statement ( 000 's)
Net Sales (All on Credit)
COGS
Depreciation
EBIT
Interest
EBT
Taxes (35\%)
Net Income
Dividends Paid
Addition to Retained Earnings
\begin{tabular}{c}
2013 \\
\hline K7,418 \\
K5,271 \\
K745 \\
K1,402 \\
K305 \\
K1,097 \\
K384 \\
K713 \\
\\
K250 \\
K463
\end{tabular}
Bacon Signs
2012 and 2013 Balance Sheets ( 000 's)
\begin{tabular}{lcc}
Assets & \( \mathbf{2 0 1 2} \) & \( \mathbf{2 0 1 3} \) \\
\hline Cash & K972 & K500 \\
A/R & 1,680 & 2,670 \\
Inventory & \( \underline{875} \) & \( \underline{738} \) \\
Total Current Assets & 3,527 & \( \mathbf{3 , 9 0 8} \)
\end{tabular}
\begin{tabular}{lcc}
Net Fixed Assets & 12,680 & K14,155 \\
Total Assets & \( \underline{16,207} \) & \( \underline{18,063} \) \\
Liabilities & \( \mathbf{2 0 1 2} \) & \( \mathbf{2 0 1 3} \) \\
\hline A/P & K 725 & K 1765 \\
N/P & 1525 & 1178 \\
Total Current Liabilities & 2250 & 2943 \\
& & \\
Long-Term Debt & 5000 & 5500 \\
Common Stock & 4000 & 4200 \\
Retained Earnings & 4957 & 5420 \\
Total Liabilities and Equity & \( \underline{16207} \) & \( \underline{18063} \)
\end{tabular}
Required:
1. Analyze the performance of Bacon Signs for the year 2013 using:[10marks]
a. Two Liquidity ratio
b. Inventory Holding period and Average collection period
c. Debt to asset and debt to equity
d. Return on Asset, Return on Equity and Net Profit Margin
2. If Bacon Signs is operating at full capacity and projects to increase sales by \( 30 \% \) in 2014, then determine the additional Funding Needed (AFN) show your workings. [10 marks]