A 1 2

B

C

D

E

F

3 Chapter 3 Mini Case 4 5 The first part of the case , presented in Chapter 2, discussed Computron Industries’ situation after an expansion 6 program. A large loss occurred in 2010, rather than the expected profit. As a result, its managers, directors, and 7 investors are concerned about the firm’s survival . 8 9 Donna Jamison was brought in as an assistant to Fred Campo, Computron 's chairman, who had the task of 10 getting the company back into a sound financial position . Computron 's 2009 and 2010 balance sheets and 11 income statements, together with projections for 2011, are shown in the following tables . Also, the tables show 12 the 2009 and 2010 financial ratios along with industry average data . The 2011 projected financial statement data 13 represent Jamison's and Campo's best guess for 2011 results, assuming that some new financing is arranged to 14 15 Input Data: 16 2009 2010 2011 17 Year-end common stock price $8.50 $6.00 $12.17 18 Year-end shares outstanding 100,000 100,000 250,000 19 Tax rate 40% 40% 40% 20 Lease payments $40,000 $40,000 $40,000 21 22 Balance Sheets 23 24 25 Assets 2009 2010 2011 26 Cash and equivalents $9,000 $7,282 $14,000 27 Short-term investments $48,600 $20,000 $71,632 28 Accounts receivable $351,200 $632,160 $878,000 29 Inventories $715,200 $1,287,360 $1,716,480 30 Total current assets $1,124,000 $1,946,802 $2,680,112 31 Gross Fixed Assets $491,000 $1,202,950 $1,220,000 32 Less Accumulated Dep. $146,200 $263,160 $383,160 33 Net Fixed Assets $344,800 $939,790 $836,840 34 Total Assets $1,468,800 $2,886,592 $3,516,952 35 36 Liabilities and equity 37 Accounts payable $145,600 $324,000 $359,800 38 Notes payable $200,000 $720,000 $300,000 39 Accruals $136,000 $284,960 $380,000 40 Total current liabilities $481,600 $1,328,960 $1,039,800 41 Long-term bonds $323,432 $1,000,000 $500,000 42 Total