Essay About Total Business And Tire City

Tire City Case Study
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Perspectives on Management Assignment 2Read: “How To Read a Financial Report” .  Please focus on pages 1-36.
*repay in 4 equal annual installments~1st payment→ one year after construction done (1998)~interest rate→ 10%projection→ 20% increase in sales each year (1996 and 1997)*1993→ $16,230,000*1994→ $20,355,000*1995→ $23,505,000*1996→ $28,206,000*1997→ $33,847,000Cash*1993→ $508,000*1994→ $609,000*1995→ $706,000ROA = NI/total assets*1993→ 11.85%*1994→ 12.75%*1995→ 13.25%ROE = NI/SE*1993→ 23.87%*1994→ 24.53%*1995→ 23.73%        Dividend payout ratio→ dividend/NI*1993→ 20%*1994→ 20%*1995→ 20.2%Gross profit→ revenue – COGS*1993→ $6,800,000*1994→ $8,457,000*1995→ $9,893,000NI→ revenues – all business costs (depreciation, interest, taxes, etc.)*1993→ $780,000*1994→ $997,000*1995→ $1,190,000The increasing proportionate difference between GP and NI is alarminggross P&E*1993→ $3,232,000*1994→ $3,795,000*1995→ $4,163,000net P&E (gross P&E – depreciation)*1993→ $1,897,000*1994→ $2,280,000*1995→ $2,435,000profit margin (NI/Net Sales)*1993→ 4.8% *1994→ 4.9%*1995→ 5.1%These profit margins are low.current ratio (CA/CL)*1993→ 2.03