Nalyzing the Financial Statements of tow companies

Course: BUSI 4465 Financial Statement Analysis
Financial Statement Assignment

The two companies you will be analyzing are
1-Brick Brewing Co. Limited 2Big Rock Brewery Inc.
You will need the 2011 and 2012 audited financial statements (year-end). You can
download the statements at (Financial statements is attached)
Additional recourses:
Long-term Debt to Long-term Capital
c. Interest Coverage Ratio on reported amounts

8. Calculate and explain the results of the following activity ratios for each
company for each of the (three years):
a. Accounts Receivable turnover
b. Days in receivables
c. Inventory turnover
d. Accounts Payable turnover

9. Prepare a forecast of the income statement and balance sheet for the (five
years) based on some growth assumption. Assume the fifth year is the
terminal year.

10. aDocument and explain the assumptions you used in Part 9.
bJustify why the assumptions are valid.

11. aCalculate the Weighted Average Cost of Capital.
bExplain what the WACC means to the company. Show your work!
cDo you think this WACC makes sense?
dIf you owned the company would you agree to use this WACC as your
discount rate? Explain your reasoning.

12. aCalculate the value of the company using the discounted cash-flow model.
For simplicity, assume net income is equal to operating cash-flow. Use your
forecast and WACC for the basis of this calculation.
bCompare the calculated value to two multiple calculations.
cAre they very different? Which value do you feel more comfortable with?

13. aCalculate the Altman Z-Score.
bExplain what it means.
cDo you have concerns about their debt levels? Are they likely to be
distressed?
dWhich of the two companies do you think is a better investment? Explain
your answer.

*Note:
no sources is needed