Analyzing Financial Statements Of Mandrake Motorcycle

1018 Words5 Pages
Analyzing Financial Statements of Mandrake Motorcycle
Scott Giles, Dayne Dickson, & Dale Bierman
Bellevue University

Analyzing Financial Statements of Mandrake Motorcycle
When companies have an interest in partnering, it is prudent for each to conduct a financial analysis–ensuring that both parties are making a sound investment. The purpose of the financial analysis is to scrutinize the profitability and financial stability of a company, while addressing any concerns (Jiambalvo, 2014, p. 535). In the case study, Bob Sherman founder of Mandrake Motorcycle manufacturing made a proposal to Marty “Monk” Fisher, a motorcycle dealer. Fisher proposed that Monk be the sole dealer for his motorcycles in the state of Ohio. Before investing, Mr. Sherman must do a financial analysis on Mandrake Motorcycle to insure that there are no financial concerns. This paper will analyze Mandrakes Motorcycle 's balance sheet, and income statement–calculating the ratios for 2015 and 2014. The calculated ratios will include, return on assets, gross margin percentage, receivables turnover, days’ sales in receivables, inventory turnover, days’ sales in inventory, debt to equity, and times interest earned. In addition, the paper will highlight areas of concern, and discuss what is the best decision for Monk based on the analysis. Finally, the paper will ascertain whether the financial analysis was indicative of future financial issues for Mandrake Motorcycles.
Calculating the Ratios
Return on

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