Submitted by: Submitted by roberthardy
Views: 283
Words: 3696
Pages: 15
Category: Business and Industry
Date Submitted: 02/22/2013 01:56 PM
Contents
Section I: Introduction 1
Section II: Financial Analysis 2
Internal Analysis and Consequences of Expansion 2
External Analysis and Investor’s Perspective 3
Section III: Ratio Analysis, Comparison, Interpretation, and Recommendations 5
The Importance of Ratios 5
Liquidity Ratios 5
Asset Management Ratios 5
Solvency Ratios 7
Profitability Ratios 7
Market Value Ratios 8
Section IV: DuPont Analysis’s of 2008 and 2009: A comparison 8
DuPont Analysis 2008 8
DuPont Analysis 2009 9
Section V: Recommendations on Policies 9
Collection Policies 9
Production Policies 10
Accounting and Finance Policies 10
Section VI: Conclusion 11
Appendix – Balance Sheet 12
Appendix – Classified Balance Sheet 13
Appendix – Balance Sheet / Trend Analysis / Common Size 14
Appendix – Income Statement 15
Appendix – Income Statement / Trend Analysis / Common Size 16
Appendix – Statement of Stockholder’s Equity 17
Appendix – Statement of Cash Flows 18
Appendix – Ratio Analysis 19
Appendix – Free Cash Flows 20
Appendix – Net Working Capital 21
Appendix - DuPont 22
Bibliography 23
Section I: Introduction
D’Leon is a small, snack food manufacturer based in North Florida that specializes in high-quality pecan and other nut-based products sold in the snack foods market. In 2007, D’Leon’s president, Al Watkins, made the decision to expand into the national market and compete with brands such as Frito-Lay, Eagle, and other major snack-food companies. Watkins believes the superior quality of his snack food products allow D’Leon to charge a premium price for its products. Watkins also believes the expansion will greatly increase sales, profits, and stock price.
In the expansion, D’Leon doubles plant capacity, opens new sales offices, and launches an expensive advertising campaign. Post-expansion performance is unsatisfactory. Sales are not up to the forecasted level and costs are higher than projected. As a result of these...