BnB Construction Inc. Income Statement (Millions of Dollars) BoB Construction Inc. Balance Sheet (Millions of Dollars) 2021 Est. 2020 2019 Net Sales 4,000 3,000 2,850 2021 2021 Assets 2020 2019 Liabilities 2020 2019 Operating Costs EBITD Est Est 3,100 2,300 2,100 900.00 700 750 Cash and Cash 15 10 15 Accounts payable 115 60 30 Depreciation Equivalents 110 100 90 Amertizaton. Depreciation and Amortization EBITD Short-Term 10 65 Overdrafts 115 110 60 110 100 90 investments 790 600 660 Accounts Receivable 420 375 315 Аccruals 260 140 130 Interest 100 88 60 Inventories 700 615 415 Total Current Liabilities 490 310 220 Earnings Before Taxes 690 512 600 Long-Term Bonds and Taxes (40%) Total Current Assets 1,145 1,000 810 1300 754 580 276 204.8 240 New Loan Net Income Before preferred Dividends Preferred Dividends 414 307.2 360 Net Plant and 4 1884 1,190 870 Total Debt 1790 1,064.00 800 4 4 Equipment Net Income 410.0 S 303.2 356.0 Preferred Stock 40 40 40 Common Dividends 57.5 57.5 53 Common Stock 130 130 130 Addition to retained Earnings 352.50 S 245.70 S 303.0 Retained Earnings 1069 956 710 Total Common Equity 1199 1086 840 Total Liabilities and Total Assets Per Share Date 2021 2020 2019 3,029 2,190 1,680 Equity 3,029 2,190 1,680 Common Stock Price 28.0 23.00 26.00 Earnings Per Share (EPS) Dividend Per Share (DPS) Book Value Per Share (BVPS) ??? 6.06 S 7.12 Est. Estimate ???? 1.15 S 1.06 ???? 21.72 16.80 Cash Flow Per Share ???? 8.06 $ 8.92
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)
Required:
Comments on Financial Performance and Financial Position for-
a. Liquidity
b. Profitability
c. Leverage
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