CASE STUDY 9 Case Study Acme Paint Company

Advance Your World.

To help you prepare for Chapter 9, there is a case to be reviewed and analyzed prior to attending the class. You should be prepared to share and discuss the following:

• Evaluate the financial health of the company.

• As the officer of the account, you will identify specific issues that are of major concern.

• Note any recognizable problem-loan warning signs.

The case study will address the following issues:

• Case Study Acme Paint Company

– Evaluation of the company

– Identifying problem loans and warning signs

CS 9 – 2

CASE 1: ACME PAINT COMPANY ACME PAINT COMPANY BALANCE SHEET (FROM COMPANY RECORDS, PREPARED WITHOUT AUDIT)

Fiscal Year Assets

6/30/X1 06/30/X2 06/30/X3 06/30/X4 06/30/X5

Cash $30,600 $69,100 $30,000 $21,700 $1,200

Accounts Receivable 209,000 250,100 190,200 213,500 174,700

Inventory 472,800 425,600 388,200 360,000 399,000

Prepaid Expenses 37,000 8,900 500 16,400 8,200 Total Current Assets

749,400

753,700

608,900

611,600

583,100

Land & Buildings (net) 145,100 146,200 282,500 280,100 323,800

Equipment (net) 32,200 33,500 55,000 59,800 96,500 Total Fixed Assets

177,300

179,700

337,500

339,900

420,300

TOTAL ASSETS $926,700 $933,400 $946,400 $951,500 $1,003,400

Liabilities

Notes Payable – Banks $85,000 $77,000 $100,000 $119,500 $132,700

Accounts Payable 230,000 254,400 255,100 257,300 254,500

Other Current Liabilities 31,800 40,400 26,000 27,700 22,900 Total Current Liabilities

346,800

371,800

381,100

404,500

410,100

Mortgage & Contracts Payable 191,400 168,400 164,100 144,200 188,100

TOTAL LIABILITIES $538,200