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A B C D E F G H

1 LYNX CORPORATION- FINANCIAL PERFORMANCE ANALYSIS


2
3
4
5
6 DATA SECTION
7
8 LYNX CORPORATION- FINANCIAL PERFORMANCE ANALYSIS
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10
11 ASSUMPTIONS
12 Percent
Decision variables
13 Uncontrollable variables: of sales
14 0.05 3% Cost of sales 71%
15 Corp. Tax rate 34% Selling & Administrative 25%
16 Interest 2%
17 Depreciation 2%
18 Other expenses (Income) -1%
19 Cash and Equivalents 11%
20 Shares (in 000's) 13,533 Accounts Receivable 1%
21 Inventories 30%
22 Other Current Assets 2%
23 Net Property Plant and Equipment 13%
24 Other Assets 1%
25 Accounts Payable 12%
26 Other current liabilities 5%
27
28 REPORT SECTION
29 LYNX CORPORATION
30 (Dollars in thousands)
Projected Sales
31 Increase 5%
32 INCOME STATEMENT Projected
2008 2009
33 2010
34
35 Net Sales 408,920 428,848 441,713
36
37 Cost and Expenses
38 Cost of Sales 292,577 313,009 313,617
39 Selling and Admin. 98,819 102,961 110,428
40 Interest 7,790 8,322 8,834
41 Depreciation 7,319 6,234 8,834
42
43 Total operating expenses 406,505 430,526 441,713
44
45 Operating Income 2,415 (1,678) 0
46 Other Expense (Income) (3,052) (2,203) (4,417)
47
48 Income before Taxes 5,467 525 4,417
A B C D E F G H
49 Income Taxes 1,472 182 1,502
50
51 Net Income 3,995 343 2,915
52
53 Projected Sales
54 BALANCE SHEET Increase 5%
2008 2009 Projected
55 2010
56
57 Cash and Equivalents 33,891 24,973 48,588
58 Accounts Receivable 4,869 2,421 4,417
59 Inventories 129,836 138,996 132,514
60 Other current assets 5,175 6,987 8,834
61
62 Total current assets 173,771 173,377 194,354
63
64 Net Prop. Pl. & Eq. 54,299 56,837 57,423
65
66 Other Assets 3,778 4,415 4,417
67
68 Total Assets 231,848 234,629 256,194
69
70
71
72 Accounts payable 48,753 54,709 53,006
73 Other current liabilites 21,330 16,644 22,086
74
75 Total Current Liabilities 70,083 71,353 75,091
76
77 Total long term liabilities 75,799 76,893 91,804
78
79 Common stock 1,367 1,367 1,367
80 Retained earnings 22,279 22,622 25,537
81 Other Equity 62,320 62,394 62,394
82
83 Total Equity 85,966 86,383 89,298
84
85 Total Liabilities and Equity 231,848 234,629 256,194
86
87
88 Ratios for the projected 2010 WHAT-IF data table 1: PROFIT MARGIN
89 Sales Growth Rates
90 PROFIT MARGIN 0.66% 0.66% 5% 8%
91 60% 7.92% 7.92%
Cost of Sales

92 ROE 3.3% 65% 4.62% 4.62%


93 68% 2.64% 2.64%
94 ROA 1.14% 70% 1.32% 1.32%
95 75% -1.98% -1.98%
96 EPS $2.13
97
98
99 WHAT-IF data table 2: ROE
A B C D E F G H
100 Sales Growth Rates
101 3.26% 5% 8%
102 60% 29.22% 29.81%

Cost of Sales
103 65% 19.41% 19.85%
104 68% 12.10% 12.40%
105 70% 6.44% 6.61%
106 75% -11.51% -11.88%
107
108
109
110 Sensitivity of Net Income to Key Variables
111 (Applied to 2008 Income Statement Data)
112 70% 80% 90% 100% 110% 120%
113
114 Sales (118,681) (77,789) (36,897) 3,995 44,887 85,779
115
116 COGS 91,768 62,510 33,253 3,995 (25,263) (54,520)
117
118 Selling and Admin. 33,641 23,759 13,877 3,995 (5,887) (15,769)
119
120
121
I J K L M N O P Q
CE ANALYSIS
1 Requirements:
2 + Go to the Report section: the projecting
part for 2010 has been done for you (LUCKY
3 FOR YOU!!!).
4
5 + Insert formulas in yellow cells in the table
6 "Ratios for the projected 2010"
7 + Generate the two blue tables. What are the
8 possible inference that you can get from these
9 two what-if analyses?
10
+In the table "Sensitivity...” construct formulas
11 for cells C114, C116 and C118 and copy them
12 across. Instruction:
13 C114 =($E$35*C112)-($E$38+$E$39+$E$40+
14 $E$41)-$E$46-$E$49
15 C116 =$E$35-($E$38*C112+$E$39+$E$40+
16 $E$41)-$E$46-$E$49
C118 =$E$35-($E$38+$E$39*C112+$E$40+
17
$E$41)-$E$46-$E$49
18
19 + From the "Sensitivity..." table, produce a
20 Line Graph and conclude from the chart what
21 variable has the most effect on Net Income (it
22 is the variable with the steepest line)
23
24
25
26
27
28
29
30
Projected Sales
315%
Increase
32
33
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35
36
37
38
39
40
41
42
43
44
45
46
47
48
I J K L M N O P Q
49
50
51
52
53 Sales
Projected
Increase
54 5%
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
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84
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88
Sales Growth89Rates
90 10%
91 7.92%
92 4.62%
93 2.64%
94 1.32%
95 -1.98%
96
97
98
99
I J K L M N O P Q
100Rates
Sales Growth
101 10%
102 30.19%
103 20.15%
104 12.60%

Net Income(000's)
105 6.72%
106 -12.12%
107
108
150,000
109
110 100,000
111
112 130% 50,000
113
0
114 126,671 70% 80% 90% 100% 110% 120% 130%
115 (50,000)
116 (83,778)
(100,000)
117
118 (25,651) (150,000) Sa l es Li ne a r (Sa l es )
119 Li nea r (Sa l es ) Li ne a r (Sa l es )
COGS Sel l i ng a nd Admi n.
120
121
R S T
100
101
102
103
104
105
106
107
108
109
110
111
112
113
100% 114
110% 120% 130%
115
116
117
Li nea r118
(Sa l es )
Li nea r119
(Sa l es )
Sel l i ng a nd Admi n.
120
121
G32: Projected Sales Increase 5%

G54: Projected Sales Increase 5%


NPV SENSITIVE ANALYSIS

DATA SECTION
Investment 2,000,000
Project life 15
Annual cashflow 300,000
Discount rate 10%

REPORT SECTION

Project NPV $281,823.85

Data-table $ 281,823.85
7% $ 732,374.20
7.5% $ 648,135.92
8% $ 2,500,000.00
8.5% $ 491,270.97
9% $ 418,206.53
discount rate

9.5% $ 2,500,000.00
10% $ 281,823.85
10.5% $ 218,147.38
11% $ 567,843.61
11.5% $ 99,012.35
12% $ 43,259.35
12.5% $ 348,452.50
13% $ (61,286.35)
13.5% $ (110,322.12)