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This spreadsheet supports STUDENT analysis of the case Alliance Concrete UVA-F-1527).
was prepared by Associate Professor Marc Lipson. Copyright 2007 by the University of Virginia Darden School Foundation,
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Exhibit 1
ALLIANCE CONCRETE
Income Statements
2002
Income Statement (in thousands of dollars)
Revenue
Cost of goods sold
Gross margin
General and administrative
Earnings before interest and taxes
Interest
Tax
Net income
Additional Data
Yards sold (in thousands)
Average price per yard (in dollars)
Average cost per yard (in dollars)
Depreciation (in thosands of dollars)
Source: Created by case writer.
2003
2004
1,751
73.66
57.60
5,436
1,850
77.60
60.11
5,762
1,957
82.71
64.26
5,983
2005
185,815
144,594
41,221
17,327
23,894
5,695
18,199
6,210
11,989
2,085
89.12
69.35
6,439
Exhibit 2
ALLIANCE CONCRETE
Balance Sheets
2002
2003
2004
2005
2,837
18,092
3,549
24,478
87,534
112,012
3,330
19,823
4,238
27,391
91,392
118,783
3,043
23,104
4,233
30,380
93,569
123,949
4,180
28,203
4,615
36,998
97,476
134,474
8,891
5,313
14,204
55,000
42,808
112,012
9,609
5,713
15,322
75,000
28,461
118,783
11,067
6,490
17,557
71,000
35,392
123,949
13,534
7,897
21,431
67,000
46,043
134,474
21.80%
5.60%
6.45%
16.87%
22.54%
5.74%
6.93%
28.93%
22.31%
4.76%
6.21%
21.76%
22.18%
6.45%
8.92%
26.04%
51.20
12.84
32.18
1.15
1.47
50.40
13.91
31.54
1.21
1.57
52.10
12.29
32.12
1.31
1.73
55.40
11.65
34.16
1.38
1.91
2.98
49.10%
3.45
3.56
63.14%
3.04
2.91
57.28%
3.01
2.80
49.82%
4.20
2005
Forecast
2,085
89.12
69.35
2,200
94.02
76.28
16,000
7,500
185,815
144,594
41,221
17,327 9.32%
23,894
5,695
18,199
6,210 34.81%
11,989
206,847
167,826
39,021
19,288
19,733
6,179
13,554
4,718
8,836
3,000
5,836
4,180 2.25%
28,203 15.18%
4,615 2.48%
36,998
97,476
134,474
4,653
31,395
5,137
41,186
97,476
138,662
Accounts payable
Other accrued expenses
Current liabilities
Long-term debt
Owners' equity
Total Liabilites & Owner's Equity
13,534
7,897
21,431
67,000
46,043
134,474
15,066
8,791
23,857
63,000
51,879
138,736
7.28%
4.25%
22.18%
6.45%
8.92%
26.04%
18.86%
4.27%
6.37%
17.03%
55.40
11.65
34.16
1.38
1.91
55.40
11.17
32.77
1.49
2.12
2.80
50%
4.20
2.31
45%
3.19
Assumptions
It is given that expected sales are to increase by 2.2 million cubic yards.
Used the average of worst case scenario price increase(4%) and the best case scenario price increase(7%), which is 5
Used the 10% increase in cost to give company more room incase of unexpected cost increase.
Planned expenditure given in the case.
The depreciation expected is also given in the case.
Forcasted revenue is calculated by the yards expected to sell by the expected price.
Multiply the expected revenue to the percentage of 2005's COGS/Revenue.
Difference from Revenue and COGS.
Multiply the expected revenue to the percentage of 2005's G&A/Revenue.
Difference from Gross Margin - G&A.
EBIT multiply by 8.5%, interest is given in the case.
Difference from EBIT - Interest.
To be conservative, I used the average percentage from the previous years instead of only last year's because last yea
Difference from Taxable Income and Tax.
The new owners (National) want to increase the dividend payout for 2006 to 3 million dollars.
Difference from Net Income and Dividend Payout
Expected cash will be 2.25% of expected revenue. The 2.25% comes from 2005's Cash/Revenue.
Expected Accounts Receivable will be 15.18% of expected revenue. The 15.18% comes from 2005's AR/Revenue.
The forecasted Inventory will be 2.48% of sales. 2.48% is from 2005's Inventory/Revenue.
The forecasted Plant and Equipment will stay the same.
m 2005's AR/Revenue.
2005
No Dividends
2,085
89.12
69.35
2,200
94.02
76.28
16,000
7,500
185,815
144,594
41,221
17,327 9.32%
23,894
5,695
18,199
6,210 34.81%
11,989
206,847
167,826
39,021
19,288
19,733
6,179
13,554
4,718
8,836
0
8,836
4,180 2.25%
28,203 15.18%
4,615 2.48%
36,998
97,476
134,474
4,653
31,395
5,137
41,186
105,976
147,162
Accounts payable
Other accrued expenses
Current liabilities
Long-term debt
Owners' equity
Total Liabilites & Owner's Equity
13,534
7,897
21,431
67,000
46,043
134,474
15,066
8,791
23,857
63,000
54,879
141,736
7.28%
4.25%
22.18%
6.45%
8.92%
26.04%
18.86%
4.27%
6.00%
16.10%
55.40
11.65
34.16
1.38
1.91
55.40
11.17
32.77
1.41
1.95
2.80
50%
4.20
2.31
44%
3.19
Assumptions
It is given that expected sales are to increase by 2.2 million cubic yards.
Used the average of worst case scenario price increase(4%) and the best case scenario price increase(7%), which is 5
Used the 10% increase in cost to give company more room incase of unexpected cost increase.
Planned expenditure given in the case.
The depreciation expected is also given in the case.
Forcasted revenue is calculated by the yards expected to sell by the expected price.
Multiply the expected revenue to the percentage of 2005's COGS/Revenue.
Difference from Revenue and COGS.
Multiply the expected revenue to the percentage of 2005's G&A/Revenue.
Difference from Gross Margin - G&A.
EBIT multiply by 8.5%, interest is given in the case.
Difference from EBIT - Interest.
To be conservative, I used the average percentage from the previous years instead of only last year's because last yea
Difference from Taxable Income and Tax.
Executed the option to not payout dividends
Difference from Net Income and Dividend Payout
Expected cash will be 2.25% of expected revenue. The 2.25% comes from 2005's Cash/Revenue.
Expected Accounts Receivable will be 15.18% of expected revenue. The 15.18% comes from 2005's AR/Revenue.
The forecasted Inventory will be 2.48% of sales. 2.48% is from 2005's Inventory/Revenue.
The forecasted Plant and Equipment includes the capital expenditure.
m 2005's AR/Revenue.