Tran Company Has the Following Financial Statements for the Year $\quad$

question 88

Essay

Tran Company has the following financial statements for the year ended December 31,2016. $\quad$ Tran Compary
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Balance Sheet
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ For 2016
$\begin{array}{|l|r|}\hline \text { Cash } & \$ 1,600,000 \\\hline \text { Accounts Receivable } & 3,000,000 \\\hline \text { Inventory } & \underline{2,500,000} \\\hline \text { Current Assets } & \$ 7,100,000 \\\hline \text { Long-Lived Assets } & \underline{14,500,000 }\\\hline \text { Total Assets } & \$ 21,600,000 \\\hline \text { Current Liabilities } & \$ 1,200,000 \\\hline \text { Long-Term Debt } & 2,400,000 \\\hline \text { Shareholder Equity } & 18,000,000 \\\hline \text { Total Debt and Equity } &\underline{ \$ 21,600,000} \\\hline\end{array}$
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Tran Compary
$\quad$ $\quad$ $\quad$ $\quad$ Income Statement
$\quad$ $\quad$ $\quad$ For $Y$ ear Ended Dec. 31, 2016
$\begin{array}{|c|r|}\hline \text { Sales } & \$ 20,000,000 \\\hline \text { Cost of Sales } & 15,000,000 \\\hline \text { Gross Margin } & \$ 5,000,000 \\\hline \text { Operating Expenses } & 2,500,000 \\\hline \text { Operating Income } & \$ 2,500,000 \\\hline \text { Taxes } & 1,000,000 \\\hline \text { Net Income } & \$ 1,500,000 \\\hline\end{array}$
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Tran Compary
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Cash Flows from Operations
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ For Y ear Ended Dec. 31, 2016
$\begin{array}{|l|r|}\hline \text { Net Income } & \$ 1,500,000 \\\hline \text { Plus Depreciation Expense } & 1,000,000 \\\hline \text { + Decrease (- Inc rease) in Acct. Rec. \& } & \\\begin{array}{l}\text { Inventory }\end{array} & \\\hline \text { + Increase (-Dec rease) in Current Liabilities } & \\\hline \text { Cash Flows from Operations } & \$ 2,500,000 \\\hline\end{array}$ Some additional information about 2016 includes:
Required:
1.Complete a business analysis of Tran Company for 2016.2.Complete a business valuation for Tran Company for 2016.

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