Problem:
Better Mouse Trap , INC, Income Statements( in 000’s,except eps)
Net sales $495,990 $570,389 $541,869
Cost of good 310,507 357,083 334,235
Gross profit 185,483 213,306 207,634
Selling & admin expenses 99,233 103.202 107,330
Operating income 86,250 110,104 100,304
Other income ( expenses) 9,191 9,559 9,941
Interest expenses 726 755 785
Income before taxes 76,333 99,790 89,578
Income tax 28,243 36,922 33,144
Net income 48,090 62,868 56,434
Avg number of common shares 57,405 56,585 55,157
EPS 0.84 1.11 1.02
Better Mouse Trap, INC Balance Sheets
2007 2008 2009
Assets
Cash & Equivalents 79,260 98,913 86,871
Accounts recievables 41,211 36,860 34,196
Inventories 63,957 57,402 55,584
Other current Assets 6,489 6,551 11,328
Total current Assets 190,917 199,726 187,979
Long term Investments 61,249 74,393 59,083
Prop. Plant &Equip, Net 202,898 201,401 217,628
Good will 74,194 73,237 73,237
Intangible Assets 189,024 189,024 189,024
Other Assets 73,357 74,944 85,141
Total Assets 791,639 812,725 812,092
Liabilities
Account Payable 62,211 57,972 59,252
Total Current Liabilites 62,211 57,972 59,252
Long term Debt 7500 7500 7,500
Other Liabilities 91,247 109,023 110,570
Total liabilities 160,958 174,495 177,322
Common Stock 37,329 37,706 38,204
Additional Capital 424,119 443,772 453,694
Retained Earnings 169,233 156,752 142,872
Total Equity 630,681 638,230 634,770
Total earnings &Equity 791,639 812,725 812,092
Question1.
a. What is the company's average annual rate of sales growth from 2007 through 2009?
b. How long, on average, was Better Mouse Trap taking to collect on its receivable accounts in 2009? (Assume all of the company’s sales were on credit.)
c. Was Better Mouse Trap more or less profitable in 2009 than it was in 2007? Justify your answer using at least two ratios.
d. Was Better Mouse Trap more or less liquid at the end of 2009 than it was at the end of 2007? Justify your answer using at least two ratios.