QuestionBnB Caribbean Inc. (BnB) is a leading construction company founded in 2001 and is based in Jamaica. The company has within recent years been experiencing increases in revenues from its construction related services such as design, build, expansion and remodeling, and emergency services. It’s main line of business is from the construction of roads and commercial buildings within Jamaica and to a lesser extent a few other Caribbean countries. Since the growth of the tourism sector in the Caribbean, BnB Caribbean has become concerned about the number of other construction companies which have entered the market to provide similar services around the Caribbean region. Business overseas contributes to 40% of the company’s revenues, while the other 60% comes mainly from works done in the domestic market. The COVID-19 pandemic has caused a slowdown in overall operations leading to prolonged delays in delivery of raw materials from abroad. The CEO of the company is optimistic that there will be a turnaround in operations in 2021, and is therefore considering contracting a loan of $500.0 Million from its local bank to help rebuild its lead position in the market and to expand its line of business to include the sales of heavy equipment. The company has over the years relied mainly on issuing long-term bonds to finance its capital projects. As of today, the firm has 50.0 million shares of common stock outstanding. You are hired as the Chief Financial Controller of the company to advise the CEO and board of the company of the current financial health of the company and to assist them in determining whether they would be successful with the new loan. You began by gathering the following financial statements and other data about the firm. (image attached) Analysis of Financial Data (Table with ratios)Ratio Analysis2021 Est. 2020 2019 Industry AverageLiquidity RatiosCurrent Ratio (times) 4.2Quick Ratio (times) 2.1 Asset Management Ratios Average sales/day 9Inventory Turnover Ratio (times) 9Days Sales Outstanding (days) 36Fixed Assets Turnover Ratio (times) 3Total Asset Turnover Ratio 1.8 Debt Management RatiosTotal Debt to Total Assets (%) 40Times Interest Earned (times) 6Debt to Equity Ratio (%) 1 Profitability RatiosProfit Margin on Sales (%) 8Earning Power (%) 17.2Return on Total Assets (%) 12Return on Common Equity (%) 25 Market Value Ratios Price/Earnings RatioPrice/Earnings Ratio (times) 12.5Price/Cash Flow Ratio (times) 6.8Market /Book Value Ratio (times) 1.7 Required:Comments on Financial Performance and Financial Positiona. Liquidityb. Profitabilityc. Leveraged. Asset Managemente. Market Value4. Chance of Success of Application of the Loan Case Analysis_S2_20 20 xfinancial management X-financial management x M Gmail - Email from Goo xFinancial Ratio Analysis x b Answered: nB Caribbea x +O FileC:/Users/User/OneDrive/UWI/Year%202/SEMESTER%202/LECTURES/MGMT2023/Case%20Analysis_S2_20_2021%20(1)%20-%20DUE%2014th%20February%.Case Analysis_S2_20 2021 (1) - DUE 14th February 2021.pdf+ | 8 O2 16 |98%1BnB Construction Inc.Balance Sheet (Millions of Dollars)20212021Assets2020 2019Liabilities20202019EstEstCash and Cash151015Accounts payable1156030EquivalentsShort-Term1065Overdrafts11511060investmentsAccounts Receivable420375315Accruals260140130Inventories700615415Total Current Liabilities490310220Long-Term Bonds andTotal Current Assets1,145 1,0008101300754580New LoanNet Plant and18841,190870Total Debt17901,064.00800EquipmentPreferred Stock404040Common Stock130130130Retained Earnings1069956710Total Common Equity11991086840$$Total Liabilities and$$$Total Assets33,029 2,190 1,680Equity3,0292,1901,680Est. Estimate8:24 PMP Type here to search2/12/2021 -pdf2 / 698%BnB Construction Inc.Income Statement (Millions of Dollars)2021 Est.20202019Net Sales4,0003,0002,850Operating Costs3,1002,3002,100ЕBITD900.00700750Depreciation11010090AmortizatonDepreciation and Amortization11010090EBITD790600660Interest1008860Earnings Before TaxesТахes (40%)Net Income Before preferred Dividends690512600276204.8240414307.2360Preferred Dividends444Net Income$410.0$303.2 $356.0Common Dividends57.557.553Addition to retained Earnings$352.50 $245.70 $303.0Per Share Date202120202019Common Stock Price28.0 $23.00 $26.00%24

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QuestionBnB Caribbean Inc. (BnB) is a leading construction company founded in 2001 and is based in Jamaica.  The company has within recent years been experiencing increases in revenues from its construction related services such as design, build, expansion and remodeling, and emergency services.  It’s main line of business is from the construction of roads and commercial buildings within Jamaica and to a lesser extent a few other Caribbean countries.  Since the growth of the tourism sector in the Caribbean, BnB Caribbean has become concerned about the number of other construction companies which have entered the market to provide similar services around the Caribbean region.  Business overseas contributes to 40% of the company’s revenues, while the other 60% comes mainly from works done in the domestic market.   The COVID-19 pandemic has caused a slowdown in overall operations leading to prolonged delays in delivery of raw materials from abroad.  The CEO of the company is optimistic that there will be a turnaround in operations in 2021, and is therefore considering contracting a loan of $500.0 Million from its local bank to help rebuild its lead position in the market and to expand its line of business to include the sales of heavy equipment.  The company has over the years relied mainly on issuing long-term bonds to finance its capital projects.  As of today, the firm has 50.0 million shares of common stock outstanding.  You are hired as the Chief Financial Controller of the company to advise the CEO and board of the company of the current financial health of the company and to assist them in determining whether they would be successful with the new loan.    You began by gathering the following financial statements and other data about the firm. (image attached) Analysis of Financial Data (Table with ratios)Ratio Analysis2021                                                                        Est. 2020    2019     Industry                                                                                                       AverageLiquidity RatiosCurrent Ratio (times)                                                                          4.2Quick Ratio (times)                                                                             2.1 Asset Management Ratios Average sales/day                                                                                9Inventory Turnover Ratio (times)                                                         9Days Sales Outstanding (days)                                                           36Fixed Assets Turnover Ratio (times)                                                     3Total Asset Turnover Ratio                                                                 1.8 Debt Management RatiosTotal Debt to Total Assets (%)                                                             40Times Interest Earned (times)                                                              6Debt to Equity Ratio (%)                                                                      1 Profitability RatiosProfit Margin on Sales (%)                                                                  8Earning Power (%)                                                                           17.2Return on Total Assets (%)                                                                 12Return on Common Equity (%)                                                          25 Market Value Ratios Price/Earnings RatioPrice/Earnings Ratio (times)                                                             12.5Price/Cash Flow Ratio (times)                                                            6.8Market /Book Value Ratio (times)                                                      1.7 Required:Comments on Financial Performance and Financial Positiona. Liquidityb. Profitabilityc. Leveraged. Asset Managemente. Market Value4. Chance of Success of Application of the Loan Case Analysis_S2_20 20 xfinancial management X-financial management x M Gmail - Email from Goo xFinancial Ratio Analysis x b Answered: nB Caribbea x +O FileC:/Users/User/OneDrive/UWI/Year%202/SEMESTER%202/LECTURES/MGMT2023/Case%20Analysis_S2_20_2021%20(1)%20-%20DUE%2014th%20February%.Case Analysis_S2_20 2021 (1) - DUE 14th February 2021.pdf+ | 8 O2 16 |98%1BnB Construction Inc.Balance Sheet (Millions of Dollars)20212021Assets2020 2019Liabilities20202019EstEstCash and Cash151015Accounts payable1156030EquivalentsShort-Term1065Overdrafts11511060investmentsAccounts Receivable420375315Accruals260140130Inventories700615415Total Current Liabilities490310220Long-Term Bonds andTotal Current Assets1,145 1,0008101300754580New LoanNet Plant and18841,190870Total Debt17901,064.00800EquipmentPreferred Stock404040Common Stock130130130Retained Earnings1069956710Total Common Equity11991086840$$Total Liabilities and$$$Total Assets33,029 2,190 1,680Equity3,0292,1901,680Est. Estimate8:24 PMP Type here to search2/12/2021 -pdf2 / 698%BnB Construction Inc.Income Statement (Millions of Dollars)2021 Est.20202019Net Sales4,0003,0002,850Operating Costs3,1002,3002,100ЕBITD900.00700750Depreciation11010090AmortizatonDepreciation and Amortization11010090EBITD790600660Interest1008860Earnings Before TaxesТахes (40%)Net Income Before preferred Dividends690512600276204.8240414307.2360Preferred Dividends444Net Income$410.0$303.2 $356.0Common Dividends57.557.553Addition to retained Earnings$352.50 $245.70 $303.0Per Share Date202120202019Common Stock Price28.0 $23.00 $26.00%24

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