Aurora.xls This spreadsheet supports STUDENT STUDENT analysis analysis of the case, "Aurora Textile Textile Company" (Case 2!
Copyright (C) 2007, by the University of Virginia Daren !"hool #ounation.
Consoliate !tate$ent of %perations for the #is"al &ears 'ning De"e$ber, ***+2002 ( thousans)
Pounds shipped (000's) Average selling pri"e - lb Conversion Cost - lb Average a/ aterial Cost - lb Net Sales
a/ aterial Cost Cost of Conversion Total costs 1ross argin !1A 'xpenses Depre"iation A$orti3ation $peratin% &rofit
4nterest 'xpense %ther 4n"o$e ('xpense) Asset 4$pair$ents5 'arnings 6efore 4n"o$e ax 8rovision 4n"o$e ax 8rovision (6enefit) 9 :; tax rate Net Earnin%s
5 Costs asso"iate /ith the shut o/n of plants
2###
2##
2##2
187,673 1.3103 0.4447 0.7077
190,473 1.2064 0.4421 0.6429
151,893 1.2045 0.4465 0.6487
144,116 1.0235 0.4296 0.4509
$245,908 132,812 83,454 216,267 29,641 14,603 15,241
$229,787 $182,955 $147,503 122,461 98,536 64,982 84,212 67,822 61,912 206,673 166,358 126,894 23,114 16,597 20,609 14,218 11,635 10,305 13,005 11,196 9,859
(203)
(4,109)
(6,234)
445
6,777
6,773 1,143
(6,980) (2,513)
(9,739) (3,506)
5,130 (1,232) 4,758 (17,354) (6,247)
3,440 (409) 7,564 (10,968) (3,949)
(',)*!
('),2++!
(',#)!
('*,#2#!
Consoliate 6alan"e !heets for the #is"al &ears 'ning De"e$ber, ***+2002 ( thousans)
2###
2##
2##2
,== 7,22 =,77? 2,77= >:,0?
>,>0? ,:: ,>> ,*22 >2,2=7
2,*2 20,*0 , 72 >=,:0?
,*7 2:,0:? ,27? 2,7? :,:*7
8roperty an '
2,:>= 2,72* 20,7>* 2::,=2 (=7,?*) ?,2>0 ,?0 ,>: '*,)-
2,>*= ,?>* 220,:> 2>>,0:? (=7,0=) 07,*:= ,?0 ,=** '),#
2,>: 0,0? *7,??* 20,7 (=:,02) ?=,= ,?0 2,?2= '+,#2+
2,>0> 0,=27 *0,=0 22,=2 (>=,:>?) :?,:?= ,?0 2,=0 '+-,
.ia/ilities A""ounts payable A""rue "o$pensation an benefits A""rue interest %ther a""rue expenses Current portion of long+ter$ ebt otal Current @iabilities @ong+ter$ ebt %ther long+ter$ liabilities Total .ia/ilities
2,2: =,=? ,?0 =,0? ,00* 2,0: ::,** :,>:: 0:,?:
7,:* ,72 ,0*0 ,*= ,70 ?,* ::,** =,0? **,2
*,::7 =,7: *: ,?? 0 ?,:?> >?,000 ,77: ??,=:
0,?> =,70 *2* ,:>7 0 20,> >?,000 0,2*7 ??,==?
Shareholder0s e1uity Co$$on sto"B, par 0.0 Capital surplus etaine earnings otal !hareholers '
50 15,868 56,184 72,02 '*,)-
50 15,678 =*,*> :>,:7* '),#
50 15,668 ?,?=> >=,>: '+,#2+
50 15,668 ,?2> =7,>= '+-,
Assets Cash an "ash e
(>*>,*>>)
8lant 8rou"tion Capability &lant unter o$e 6arton 6utler
Technolo%y ing otor otor otor
&roduct ix 00; Cotton 00; Cotton eather an 8oly-Cotton 6lens 00; Cotton
Count 3an%e Capacity 600,000 >- to 22- 1,200,000 >- to 22- 800,000 ?- to 0- 1,000,000 >- to 0-
Cost of Custo$er eturns
8ri"e of &arn !ol ei$burse$ent "ost @iability $ultiplier eturns as ; of Volu$e eturns as ; of evenue eturns as "ost-lb
'xisting $a"hine >.0 2>.0 >.0 .>0; 7.>0; 0.077
Einser 8ri"e of &arn !ol 0.0 ei$burse$ent "ost 7>.0 @iability $ultiplier 7.> eturns as ; of Volu$e .00; eturns as ; of evenue 7.>0; eturns as "ost-lb 0.0?=
Cal"ulation
(2>->) (> x .>;) (7.>; x .02>-lb) Cal"ulation
(7>-0) (7.> x .0;) (7.>; x .02>-lb x 0;)
onthly !pot 8ri"e ("ontra"t si3e >0,000lbs) 2 - *7 7=.0> *0 - *7 7.27 > - *7 70.0 ?0 : - *7 7.>? 7 - *7 7.? 70 * - *7 72.0> 0 - *7 :?.7> Spot &rice (Dollars! :0 2 - *7 :7.= 2 - *? :.*0 >0 - *? :>.:= = - *? :.:7 =0 > - *? :.00 : - *? ?.:0 0 7 - *? ?.* * - *? 7.>2 20 0 - *? 72.2 - *? :.00 0 2 - *? :0.7= 2 - ** :.* 0 - ** :=.7* = - ** >*.=2 2 - *7 ? - *7 > - ** >?.72 : - ** =*.*0 7 - ** =?.20 * - ** >.? 0 - ** =*.== - ** =*.?0 2 - ** =?.> 2 - 00 >7.* - 00 >*. = - 00 >:.0 > - 00 >:.:= : - 00 >.:0 7 - 00 >0.=> * - 00 :2.=> 0 - 00 :.:0 - 00 :=.72 2 - 00 :=.2 - 0 >*.0 2 - 0 >2.? - 0 >.>= = - 0 =.? > - 0 ==. : - 0 =2.:> 7 - 0 =0.: * - 0 =.00 0 - 0 2.* - 0 :.2 2 - 0 =.*= 2 - 02 =.:> - 02 =.> = - 02 .?0
2 - *? ? - *? 2 - ** ? - ** 2 - 00 onth
> - 02 : - 02 7 - 02 ? - 02 * - 02 0 - 02 - 02 2 - 02
2.0= =.77 =>.2 =>.0 =2.0 =.7* =7.>0 =>.*?
- 00 2 - 0 ? - 0 2 - 02 ? - 02
4nterest 3ate 5ields6 7anuary 2##+ U8S8 9o:ernment (; yield!
reasury bill (+year) reasury note (0+year) reasury bon (0+year)
.2=; .*?; =.?;
4ndustrials (; yield!
8ri$e rate AAA (0+year) AA (0+year) A (0+year) 66 (0+year) 666 (0+year)
1
=.2>; =.:0; =.::; =.?7; >.:0; :.*0;
The prime rate as the short!term interest rate "har#ed $% &ar#e .. $ans *or "orporate "&ients ith stron# "redit ratin#s.
Days sale in inventory
+a%s sa&es in re"ei-a$&es or "o&&e"tion period Asset turnover 8rofit argin '64 argin %A %'
existing $a"hine booB value if sol, pri"e
2,000,000 >00,000
Status 1uo
2002 0 .02 0.=> 0.= >00,000.00
Average selling pri"e - lb Average a/ aterial Cost - lb Conversion Cost - lb FeeBly "apa"ity Annual sales volu$e Annual evenues aterial "ost (Cost of goo sol) Conversion "ost 9ross ar%in
!1A "ost Depre"iation an a$orti3ation E<4T Tax (+);! A Depre"iation $C= ForBing "apital Chan%e in net >or?in% capital %pportunity "ost of ol e
*** 2000 >?.:*:>?:2= >?.>>*72=2 2>.70*:=0:> ?.>2>>=2?2? .7=0>==:7 .*>7?*> (0.0?) (0.027) +0.000?2>22? +0.07??22=? (0.02>) (0.0?) (0.0:2) (0.0*>)
200 .0 0.=: 0.= >0,000.00
2:,000,000.00 2:,:,000.00
2:,>20,000.00 27,==,:>2.20
,72,=00.00 ,?0,000.00 +,*#*,)##8## ,?:2,770.00
2,077,==:.:? ,>7,::.00 +,,-)8-2 ,**,02>.:> >00,000.00 ,##,-+8* -#,-8* >00,000.00 ,+),+8#*
,,+#8## )),+8# ,#,)82#
*:,>:7.2 ()+,-)*82! +,0=0,000 (2,00,>:7.2) :,7=:,0.:0 0;
**2,:::.?> (2,#8*+! ,:7,2=?.>
@inser
Average selling pri"e - lb Conversion Cost - lb Average a/ aterial Cost - lb FeeBly "apa"ity Annual sales volu$e Annual evenues aterial "ost (Cost of goo sol) Conversion "ost 9ross ar%in
!1A "ost Depre"iation an a$orti3ation E<4T Tax (+);! A Depre"iation $C= ForBing "apital Chan%e in net >or?in% capital %pportunity "ost of ol e
2002 0 . 0.= 0.=>0* =7>,000.00
200 .= 0.= 0.=: =?=,>00.00
2=,700,000.00 27,?0?,=*>.00
2>,*=,000.00 2?,:=?,.>>
,7,20.00 0,0>2,*00.00 ),),+)-8## ,*=:,>*=.:>
,=7,>7=.> 0,>:,=*7.>? ),,2+8)2 2,00>,?.? >00,000.00 ,+2,-*8 ,--2,)28 >00,000.00 +,2)#,228##
,)*,**#8+,),+*8++ 2,,++8#2
*>,??.77 (-,+8**! +>00,000 (,=>,??.77) 20,?=,>::.* 0;
*=,0.> (2*,)8*! ,22,>?=.2:
200 2002 :?.702:=2>: *>.720=?=? =0.:7?>>>?7> :=.>0:0:2077? .27*202=:: .0?=:>22=2 (0.0:) (0.0=?) +0.0=072027? 0.000=002 (0.07?) (0.0>2) (0.20=) (0.=?)
200= 2 .0= 0.=: 0.== >20,200.00
200> .0> 0.=: 0.== >0,:0=.00
200: = .07 0.=7 0.=> >=,2:.0?
2007 > .0? 0.=7 0.=> >>2,0=0.=0
200? : .0* 0.=? 0.=: >:,0?.2
200* 7 .0 0.=? 0.=: >7=,=2.?
27,0>0,=00.00 2?,2=2,>7=.70
27,>*,=0?.00 2*,0*>,>00.=>
2?,=,2:.: 2*,*7=,?=.>7
2?,70:,00.?? 0,?7*,=0=.*=
2*,2?0,222.*0 ,?,*:2.*7
2*,?:>,?27.: 2,772,:?=.2>
2,==2,?>.>7 ,?:>,=:?.: +,+,2#8-2 ,*7:,*?0.2 >00,000.00 ,-*,#82 -2,-8-# >00,000.00 ,++,#8*
2,?7,**.>7 2,22,?0>.7: ,#-+,*--82 2,0:,:?>.0 >00,000.00 ,-*,#*#8# -),-82+ >00,000.00 ,*#,28)
,20>,0=.> 2,>*2,*:=.:* ,*),*8-2 2,0*?,*2.*2 >00,000.00 ,-**,-8)# -),#*82 >00,000.00 ,-#,#8*
,:0,?.:0 2,*7,272.2 ,+#2,282 2,:,>>?.>
=,0=,::*.7 ,:>,0:>.0> ,+2,228-2,22:,?7.=
=,=7,*2.* ,7:?,:*0.0 ,-)),#82,2*=,0?7.*0
2,#,*#8** **#,)))8)
2,2#-,+8 *+,#8
2,2*,+8*,*82
,+*#,#*8#
,,-#8++
,-,#*)8+
,022,:=>.* (2,*8-!
,0>,>2*.2? (+#,+8!
,0?>,=>.?: (+,)8-!
,?,2. (+2,***8-!
,>,?*0.: (++,*)*8+2!
,?:,:77.7 (+,**8#!
,=0,0.2>
,==0,0=0.*7
,=7?,0*=.20
,7,2*:.:>
,77,:?.0
,=*,2?*.0
200= 2 .> 0.=2 0.=: =*=,*0.00
200> .: 0.=2 0.=: >0=,07.?0
200: = .7 0.=2 0.=7 >=,>>.2?
2007 > .? 0.= 0.=7 >2=,=?.?
200? : .20 0.= 0.=? >=,*27.>
200* 7 .2 0.== 0.=? >=>,:2>.:*
2>,:*7,??0.00 2*,>,=*0.>:
2:,2,?7.:0 0,=0=,7*7.*7
2:,7:,07=.> ,2,022.?7
27,270,7*>.?= 2,2:?,*7?.:
27,?:,2.7: ,2=,>0.0
2?,72,>>.** =,2=7,=>>.0=
,?20,07:.2* 0,::*,2:.? *,#2,-#8) 2,0:>,*==.= >00,000.00 ,-,2#)82 ,)#,-82# >00,000.00 +,+-+,2-82
2,77,0=2.:0 0,**,=7>.>7 *,2+),2*8# 2,2?,>.?: >00,000.00 ,)#*,+8,)-,-82 >00,000.00 +,,#8+
2,>==,7?*.2? ,2,=?.= *,-,-82,*2,:.:0 >00,000.00 ,*)2,2#+8,*,++8+ >00,000.00 +,-*,#8*
2,*2,:=.*2 ,::>,?>.: *,)*,-#8 2,2>?,?2?.=7
,,*>.*0 2,07,:?0.00 *,,-8# 2,27,0=>.0*
,7:,0:.77 2,?0,:.*= ,-#,28+ 2,*7,2.?>
-,2,228 ,-,)#8#*
-,-,#8+ 2,##,-28-
-,*-+,-#28 2,#*,2)#8
+,),-8+
+,-*,2*8#
+,)2,28-
*7,>.2 (2,*8)!
,000,?>2.?2 (2,++8*#!
,0,07?.>7 (+#,22-8*)!
,0:2,27.= (+,+8-*!
,0*=,2*:.0 (+2,#*8)!
,27,=.?= (++,#*8*!
,2=,772.
,=*,7==.=
,>7,>?=.7
,=?,7*.77
,>=2,2?.?=
,:=*,*.?>
200 ? . 0.=* 0.=7 >?>,?2*.:*
20 * .2 0.=* 0.=7 >*7,>=:.2?
202 0 . 0.>0 0.=7 :0*,=*7.2
0,=:,=.* ,7:2,=*.2
,072,=0:.7? =,7?2,0==.?
,:*,?>=.*2 >,?2,=:2.2
=,?7,*7.= =,?=,>0=.=> ,*#+,**8-2 2,:,:*.>
>,2,0.2> =,:2,?7:.=* ,),#+*8) 2,==,7=.
>,7?>,???.7? >,0>=,?>.: ,2,+*8 2,>0?,272.>
2,+#,)#8* 2,)8
2,,28- ),#))8#+
2,,-8)+ ,28)+
,*,82+
,-+,228-#
,-,+8##
,222,>>.=0 (+-,+*8)*!
,2>*,=>.: (+),8*!
,2*7,=70. (+,#+8-!
,=:2,>.>:
,>0:,0?.>=
,>>,7**.0:
4nflation ;
200 ? .22 0.== 0.=* >>:,>?.2
20 * .2 0.=> 0.=* >:7,::?.*7
202 0 .2= 0.=> 0.>0 >7*,022.>
2?,**,*?:.7 >,2?,72?.?
2*,>?,7?:.== :,=7,2:.?
0,0*,:2.7 7,===,*22.*
=,0,2=0.=7 2,7>=,>0?.=? ,+),*82+ 2,=:*,720.*7
=,>>:,*7.7= ,*,:*=.: ,)-#,-)8## 2,>==,0:.>>
=,**:,>*=.= ,>:,>.= ,,-8) 2,:2,==.:0
-,2*,2-82) 2,++,28*
),#),2)8) 2,,2-82
),2#,)*#8-2,2),)8#
+,*+,-82
+,#,##*8++
,#2),#28-
,:,?*.: (+,#-8*!
,*:,=:.>* (+-,#*+8*!
,22,>*:.?0 (+),++82#!
,7>*,**.>0
,?72,*.7
,*?*,?*>.*>
4nflation ;
