management Discussion and Analysis for Rainbow Paint Company Essay

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Management Discussion & Analysis
The Management’s Discussion and Analysis of Rainbow Paint Company make available the examination of the company’s financial results for the period ended December 31, 2012. The following facts should be studied in combination with the audited financial statements and notes to accounts for the period ended December 31, 2012 which is made according to appropriate principles and procedures. All amounts are stated in dollars unless otherwise noted.
The discussion contains few statements that may be believed “forward-looking statements”. All reports in the discussion, other than statements of historical facts, are called as the forward looking statements since we have used what we know and expect today to make a …show more content…

It is projected that cash reserve for the business will rise in future due to growth in sales and therefore the cash dividend is likely to rise in future. The new equipment has been fitted and with this new equipment, a new streak of paint products are anticipated to be announced. This shall be the new line of paint specially made for the newlyweds. This will be announced as environment friendly, easily removable paints which can be used by the newlyweds to decorate their room in different themes. This is anticipated to raise the revenue of the business by 0.3 times.

Rainbow Paint Co.
Comparative Balance Sheet
December 31, 2011 and 2012

Assets 2011 2012
Current assets: Cash $ 175,000 $ 125,000 Marketable securities 150,000 50,000 Accounts receivable (net) 425,000 325,000 Inventories 720,000 480,000 Prepaid expenses 30,000 20,000 Total current assets $ 1,500,000 $ 1,000,000
Long-term investments 250,000 225,000
Property, plant, and equipment (net) 2,093,000 1,948,000
Total assets $ 3,843,000 $ 3,173,000 Liabilities
Current liabilities $ 750,000 $ 650,000
Long-term liabilities: Mortgage note payable, 10%, due 2009 $ 410,000 - Bonds payable, 8%, due 2012 800,000 $ 800,000 Total long-term liabilities $ 1,210,000 $ 800,000
Total liabilities $ 1,960,000 $ 1,450,000
Stockholders' Equity

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