254639970 Pacific Grove Spice Company Essay

1635 Words Mar 12th, 2015 7 Pages
Based on Pacific Grove Spice Company’s forecasted financial statements, are its profitable operations sufficient to quickly bring it into compliance with the bank’s requirements?
By looking at Pacific Grove Spice Company’s forecasted financial statements, we can conclude that its profitable operations are not sufficient enough for it to be able to comply with the bank’s requirements by 30th June 2012. By the end of June-2012 Pacific Grover would only be able to lower its Equity Multiplier to 3.3 and its total debt would still be around 61% of its total assets. However, up on further analysis, we can conclude that Pacific Grove Spice would be able to comply with the bank’s requirements by 30th June 2015. As by then it would be able to
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28.288
30.653
Inventories
16.502
18.296
20.134
21.818
Prepaid Expenses
1.343
1.501
1.652
1.790
Total Current Assets
46.230
51.551
56.742
62.070

Net Property & Equipment *
29.855
33.407
36.783
39.875
Other Long-Term Assets
5.035
5.629
6.195
6.713
Goodwil;
3.400
3.400
3.400
3.400
Total Assets
$84
$94
$103
$112

Liabilities + Owners' Equity

Bank Notes Payable
$16.792
$18.266
$19.562
$21.181
Accounts Payable
5.426
6.015
6.620
7.173
Current Portion of Long-Term Debt
1.614
1.751
1.842
1.869
Accrued Expenses
1.857
2.077
2.285
2.477
Total Current Liabilities
25.689
28.110
30.309
32.700

Long-Term Debt
24.204
26.258
27.614
28.028
Total Liabilities
49.893
54.368
57.923
60.728

Common Stock
6.881
6.881
6.881
6.881
New Stock
13.200
13.200
13.200
13.200
Retained Earnings
14.470
19.390
24.890
30.950
Total Shareholder Equity
34.551
39.471
44.971
51.031
Total Liabilities & Net Worth
84
94
103
112

Pacific Grove Spice Company Income Statement after acquiring High Country Seasonings
Income Statement
06/30/12
06/30/13
06/30/14
06/30/15

Net Sales
$111.874
$125.103
$137.669
$149.180
Cost of Goods Sold
66.010
73.185
80.536
87.270
Gross Profit Margin
45.864
51.918
57.132
61.910

R&D Expense
1.677
2.002
2.203
2.387
SG&A Expense
34.977
39.407
43.366
46.992
Earnings Before Interest & Taxes
9.210
10.509
11.564
12.531

Interest Expense
3.317
3.657
3.926
4.129
Earnings Before Income Taxes
5.892
6.852
7.638
8.403

Income Taxes
1.591
1.850
2.062
2.269
Net

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