XYZ Company Case Analysis
You have been hired by XYZ Co. to assess their current financial situation and offer suggestions for
potential expansion. XYZ has been in business for 6 years and has grown from a sole proprietor to its
current status. The business is in a growing industry and sells accessories for technology items. Sales
have been steadily growing and this is something that Pat, the owner, is very happy about.
Pat’s area of expertise is marketing and operations and she hired you to get an outsider’s perspective on
the current position of her business and to see if her young employees have been keeping the books
accurately, as well as guiding her appropriately from a financial perspective. She does have long range
plans for the business and part of her plan requires external financing. As part of her plan, she is thinking
about expansion.
In your meeting with her, she starts throwing out names and numbers of accounts and hands you
several documents. She is proud to tell you she has $16,521 cash in hand.  You collect the notes and jot
down all the information she is verbally telling you, so as not to miss any important facts. You know the
first step you will take is to prepare financial statements in order to establish her current situation. But
to give her future oriented advice, you know an analysis of the statements will also be required.
Pat emphasizes that all the information you are about to receive is for the most recent fiscal year which
ended on December 31st. She tells you taxes were 27% of pre-tax profit of which $9,000 is still owed. 
She explains there is $142,000 of common stock and she recently paid a dividend of $8,350. She tells
you she has a mortgage loan with the long-term portion outstanding of $142,800. The current portion
for this period was $14,600.
She provides you with a document that lists beginning of the year inventory at $99,780. The document
also details several expenses that were incurred throughout the year including utilities at $5,440,
depreciation on building and equipment of $18,600, advertising of $14,200, and interest expense of
$3,100. The business currently holds $49,000 in other investments that may be sold or turned into
depreciable assets in the future.
Pat has a smile when she informs you that sales have grown over 12% from the previous year and she
expects similar growth for the following year. Her current year sales are $958,337. Of course, her
purchases are a major expense for her business, and she spent $833,900 to support her encouraging
sales figures. $136,300 is still owed to her suppliers. The owner lets you know that she also has notes
payable of $48,000.
Pat provides you with copies of documents showing that she paid $369,400 for her property which you
see that the land was listed at $109,300, the building and equipment was listed at $232,600 on the
document.
The owner states that she does allow some of her business customers to get items on credit, causing
current, end of year accounts receivables of $54,200.
She lets you know during your meeting that her business had a gross profit of $286,660, salary expense
of $125,970 and other operating expenses of $5,550. At the beginning of the current year, accumulated
depreciation on the building and equipment was $104,100.
Lastly, she shows you the previous retained earnings statement and you see her business has previously
retained $61,000 of past earnings to help fund the business.
With all the information presented, she requests you create independent financial statements so she
can compare them to the information her current employees have provided.  Complete the analysis
instructions in the assignment.
Case Analysis Instructions

1. In an Excel spreadsheet, prepare the financial statements (a template has been provided in the
   lesson). Create an income statement, statement of retained earnings and balance sheet. Be sure
   to use your own formulas whenever there is a calculation. Do your own work. Show each
   financial statement in a separate sheet within the Excel spreadsheet template.

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