Ginyard Company Has the Following Financial Statements for the Year $\text { Balance Sheet, 12/31/2019 }$

question 18

Essay

Ginyard Company has the following financial statements for the year ended December 31, 2019. $\text { Balance Sheet, 12/31/2019 }$
$\begin{array}{lr}\text { Cash } & \$ 1,600,000 \\\text { Accounts Receivable } & 3,000,000 \\\text { Inventory } & 2,500,000 \\\hline\text { Current Assets } & \$ 7,100,000 \\\text { Long-lived Assets } & 14,500,000\\\hline\text { Total Assets }&\$21,600,000\\\hline \text { Current Liabilities } & \$ 1,200,000 \\\text { Long-term Debt } & \$ 2,400,000 \\\text { Shareholder Equity } & 18,000,000\\\hline \text { Total Debt and Equity }&\$21,600,000\end{array}$
$\text { Income Statement }$
$\text { For the year ended December } 31,2019$
$\begin{array}{lr}\text { Sales } & \$ 20,000,000 \\\text { Cost of Sales } & 15,000,000 \\\text { Gross Margin } & 5,000,000 \\\text { Operating Expenses } & 2,500,000 \\\text { Operating Income } & 2,500,000 \\\text { Taxes } & 1,000,000 \\\text { Net Income } & \$ 1,500,000 \\\hline\end{array}$

$\text { Cash Flow From Operations }$
$\text { For the year ended December } 31,2019$
$\begin{array}{lr}\text { Net Income } & \$ 1,500,000 \\\text { Plus Depreciation Expense } & 1,000,000\\+ \text { Decrease (-inc) in AccRec and Inv. }&-\\\text { +Increase (-dec) in Cur. Liabl. }&-\\\text { Cash Flow from Operations }&\$2,500,000\end{array}$
$\text { Some additional information about } 2019 \text { includes: }$
$\begin{array}{lrr} & \text { Ginyard } &\text { Industry Data }\\\text { Year End Stock Price } & \$ 23.00 \\\text { Number of Outstanding Shares } & 1,800,000\\\text { Sales Multiplier } && 2.10 \\\text { Free Cash Flow Multiplier } && 22.00 \\\text { Earnings Multiplier } && 18.00\\\text { Cost of Capital }&5.0\%\\\text { Accounts Receivable Turnover } && 6.60 \\\text { Inventory Turnover } && 5.80 \\\text { Current Ratio } && 2.20 \\\text { Quick Ratio } && 1.50 \\\text { Cash Flow from Operations Ratio } && 1.50 \\\text { Free Cash Flow Ratio } && 1.00\\\text { Gross Margin Percentage } && 30.0 \% \\\text { Return on Assets (Net Book Value) } && 18.0 \% \\\text { Return on Equity } && 22.0 \%\\\text { Training Expense } & 500,000 \\\text { Income Tax Rate } & 40 \% \\\text { Depreciation Expense } & 1,000,000 \\\text { Dividends } & -\end{array}$ Required:
1. Complete a business analysis of Ginyard Company for 2019.
2. Complete a business valuation for Ginyard Company for 2019.

---

Definitions:

Cognitive Limitations

Restrictions in cognitive functioning that can affect learning, memory, problem-solving, and other mental activities.

Scaffolding

An educational approach involving supportive structures and techniques provided by an educator to help students progress toward stronger understanding and greater independence in the learning process.

Cognitive Skills

Mental abilities that enable understanding, analyzing, and processing information.

Social Skills

Abilities essential for effective interpersonal interactions, including communication, empathy, and conflict resolution.