Assignment:
Part 1: El Cap Climbing Company
El Cap Climbing Company (ECCC) is a small startup that manufactures and sells high-quality climbing gear in Fresno, California. The founder of the company, Leah, has been incredibly successful, but hasn't kept the company's financial records as well as she might have. The initial investment for El Cap was provided by her friends and family, and was small. However, current operations can't meet the demand for the product, and Leah has plans to increase both production and the number of storefronts. These plans require a large investment from both equity and debt financing. The new investors and creditors require detailed financial statements. Leah has hired you, a financial analyst, to prepare these statements and give insight into the financial position of the firm. Leah has provided information from her bank statements, bills, and receipts:
| |
2015 |
2016 |
|
Cost of Goods Sold
|
235,942
|
297,915
|
|
Cash
|
36,542
|
51,940
|
|
Depreciation
|
61,056
|
69,011
|
|
Interest Expense
|
13,877
|
15,905
|
|
Selling and Admin Exp
|
40,952
|
58,569
|
|
Accounts Payable
|
32,194
|
33,999
|
|
Net Fixed Assets
|
269,369
|
328,185
|
|
Sales
|
482,155
|
587,715
|
|
Accounts Receivable
|
24,120
|
24,089
|
|
Notes Payable
|
24,866
|
26,972
|
|
Long-Term Debt
|
142,148
|
161,000
|
|
Inventory
|
32,766
|
58,798
|
|
New Equity
|
0
|
16,000
|
She explained to you that taxes are paid at a rate of 30 percent, and dividends are paid at a rate of 40 percent.
Prepare the following:
An income statement for 2015 and a income statement for 2016
A balance sheet for 2015 and a balance sheet for 2016
Operating cash flows for the two years
Cash flows from assets in 2016
Cash flows to creditors for 2016
Cash flows to stockholders for 2016
B. Answer the following:
1. How would you describe the financial position of the firm in 2016? Write a brief overview.
2. What do you think about Leah's plans to expand?