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Cango Week 3 Financial Analysis

In: Business and Management

Submitted By 49rachel
Words 674
Pages 3
Financial Information
Assumptions

Balance Sheet

Income Statement

Assumptions:

At the beginning of 2009, CanGo purchased the online gaming company. This purchase was for cash, paid for through the proceeds of the IPO and results in goodwill. 90% of the online book sales comes from JIT, the other 10% through the inventory which CanGo possesses. 100% of the CD/DVD/MP3 come through CanGo inventory. The result is that 80% of ALL sales is JIT and 20% is inventory. There is one warehouse for shipping of books and one plant for manufacturing. There are three divisions: a CD/DVD/MP3 division, an online gaming division and a books division. All manufacturing takes place in the CD/DVD/MP3 division. The IPO took place at the beginning of 2009. The CD/DVDs were customized beginning in 2008. The MP3 players were built beginning in the start of 2009. The online gaming company was purchased for $30,000,000 and both Elizabeth and Andrew initiated the process. The company began in 2006, has a VC infusion in 2007 and 2008. It showed a profit in 2008 and 2009. Its only profitable division is the online book sales division. It has some type of international operations, hence the need for a "translation gain or loss" in owner's equity. It has an extraordinary loss from fire and a sale of a segment of its business in 2009.
Balance Sheet

ASSETS December 31, 2009
Cash $20,900,000
Marketable Securities $117,000,000
Accounts Receivable $33,000,000
Less: Allowance for Bad Debts $(880,000)
Net Accounts Receivable $32,120,000 Inventory
Raw Materials $2,000,000
Work-in-process $1,000,000
Finished Goods $5,000,000
Inventory Purchased for Resale $24,000,000
Total Inventory $32,000,000 Plant, Property and Equipment $6,700,000
Less: Accumulated Depreciation $(320,000)
Net Plant, Property and...

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