Tire City Inc. Case Study

1278 Words Apr 19th, 2015 6 Pages
RATIO | 1993 | 1994 | 1995 | Profitability | Gr. Profit Margin | 41.90% | 41.55% | 42.09% | Pretax Margin | 8.17% | 8.94% | 9.00% | Net Margin | 4.81% | 4.90% | 5.06% | Ret. On Assets | 11.85% | 12,75% | 13.25% | Ret. On Capital | 18.28% | 20.18% | 20.64% | Ret. On Equity | 23.87% | 24.53% | 23.72% | Activity ratio | Total asset turnover | 2.47x | 2.60x | 2.62x | Inventory turnover | 9.96x | 11.07x | 10.73x | Receivable turnover | 6.38x | 6.58x | 6.44x | Days Receivable | 57.24 | 55.50 | 56.71 | Days Inventory | 63.09 | 56.39 | 58.72 | Days Payable | | 39.95 | 37.64 | Purchases | | 12,106 | 13,964 | Liquidity | Current Ratio | 2.03x | 1.92x | 2.03x | Quick Ratio | 1.32x | 1.29x | 1.35x | Leverage | …show more content…
At the same time, since PP&E increased, D,D &A had a same trend. As for Working Capital, As Current assets rose more than Current liabilities. The number increased. Also, Net Free Cash Flow cannot be ignored because it showed negative number in 1995, and NFCF is a crucial component to calculate stock price. | 1993 | 1994 | 1995 | Average | COGS to Sales | 58.10% | 58.45% | 57.91% | 58.16% | SGA to Sales | 32.01% | 31.21% | 31.78% | 31.67% | Income Taxes to Pre Tax Income | 41.18% | 45.19% | 43.74% | 43.37% | PAT paid as Dividends | 19.87% | 20.06% | 20.17% | 20.03% | Cash to Sales | 3.13% | 2.99% | 3.00% | 3.04% | Account to Sales | 15.68% | 15.21% | 15.54% | 15.47% |
These number will be used for predicting future financial statements later in this case study. Auto parts Industry Statistics | Market Capitalization | $21 billion | Price / Earnings | 16.10 | Price / Book | 3.00 | Net Profit Margin (mrq) | 4.30% | Price To Free Cash Flow (mrq) | 22.00 | Return on Equity | 16.00% | Total Debt / Equity | 25.90 | Dividend Yield | 1.60% |
Source; http://biz.yahoo.com/ic/738.html
Tire City’s Net Margin and ROE exceeds the industry average. In Thousands of Dollars | INCOME STATEMENT | 1996 | 1997 | ASSUMPTIONS | | | | | Net Sales | 28,206

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