FINC 615 Colorado Technical Apix Printing Financial Figures and Concepts Paper Scenario: Apix Printing, Inc. Apix Printing, Inc. is a private, domestic U

FINC 615 Colorado Technical Apix Printing Financial Figures and Concepts Paper Scenario:

Apix Printing, Inc.

Apix Printing, Inc. is a private, domestic United States printer of periodicals, newspaper inserts, and advertising materials that accompany distributions of Sunday and weekday circulations of large metropolitan newspapers. The company, headed by chief executive officer (CEO) John Matthews, generates $450 million in revenues from three product lines (periodicals, inserts, and advertising) and has long-term contracts with several large U.S. retailers to produce weekly sales flyer inserts as well as metropolitan newspapers to produce Sunday magazine inserts and coupons. Its printing presses are characterized by offset print technology and are capable of high-capacity output; in addition, the company recently migrated to water-soluble inks, which considerably reduces manufacturing emissions.

The company’s executive team, employees, and above all, its vice president (VP) of Production, Luke Stewart, are committed to environmentally-sustainable manufacturing practices. Presently, the only substrate Apix uses is paper, specifically newsprint of various weights. Trim and waste are recycled in accordance with the company’s sustainability commitment. Manufacturing divisions are geographically aligned with customers’ locations to minimize logistics costs and response time to customer requirements; however, a centralized corporate entity administers functions such as human resources, information technology, and financial reporting. The VP of sales and administration, James Simeon, oversees administration and quality compliance among the various divisions. There are presently five manufacturing divisions: Northwest, Southwest, Northeast, Southeast, and Midwest.

Currently, Apix is only marginally profitable, and as such, the chief financial officer (CFO), Mary Francis, has indicated that external financing will be required to support a company expansion into a new segment of the printing sector: food packaging. This endeavor will require new investments in equipment as well as substrate inventory; promotional costs will also increase. In addition, Timothy Russell, the new Audit Committee Chair, has pointed out that the company’s compliance with the requirements of the Sarbanes-Oxley Act (SOX) will also cause administrative costs to increase. Following the requirements is paramount to successfully file a registration statement and to issue equity to shareholders in an initial public offering (IPO).

As the newly hired VP of finance, you report to the CFO. In this capacity, your responsibilities include preparation of financial statements, comparative analysis and benchmarking to sector performance, and the assessment of new business investment opportunities to grow Apix’s expansion endeavors in a challenging market.

ASSIGNMENT:

Respond to the following scenario with your thoughts, ideas, and comments. Be substantive and clear, and use research to reinforce your ideas.

In anticipation of Mary’s request for comparative analysis, it will be useful at this time to do some research. You know that you can obtain the financials of companies within the same sector or Standard Industry Code as Apix Printing (e.g., commercial printing), and that the North American Industry Classification System (NAICS) Standard Industry 2012 code for Apix Printing is presently 323111. Research two other companies in the same industry as Apix Printing.

When you get to work the next day, you see the following e-mail from Mary:

Here is the list of financial ratios you asked for. I need you to explain the computation of each and compute these for Apix’s results for the financial statements you are using for the PowerPoint presentation. Also, compare Apix’s 2-year trend results to that of two other firms in the sector. Indicate how each of Apix’s ratios differ, and indicate whether the two other companies’ ratios or Apix’s ratios are indicative of better performance.

Explain the computation for each of the following, and compute each for Apix and two other companies in the same industry as Apix Printing:

Current ratio
(Long-term) debt to equity ratio
Gross margin percentage
Net profit margin percentage
Return on equity percentage

Present your findings of the above data in a table. Add a paragraph that summarizes your results, indicating whether investors would find the financial analysis results of Apix competitive as compared to rivals in the sector. Be sure to include both positive and negative trends in your analysis. Apex Printing
Balance Sheets
As of December 31, 2013 and 2012
Assets
Cash
Accounts Receivable
Inventory
Total Current Assets
Land
Building & Equipment
Less: Accumulated Depreciation – Building & Equipment
Total Long Term Assets
Total Assets
000$
000$
2013
6,000
2,350
12,100
20,450
2012
5,700
2,300
6,500
14,500
25,000
20,000
300,000
300,000
(187,850) (160,000)
137,150
160,000
157,600
174,500
Liabilities and Stockholders’ Equity
Accounts Payable
Salaries Payable
Interest Payable
Short Term Notes Payable
Taxes Payable
Total Current Liabilities
4,600
0
1,500
12,000
0
18,100
3,500
2,100
0
0
5,600
11,200
Mortgate Payable
Total Long Term Liabilities
54,950
54,950
100,000
100,000
60,000
24,550
84,550
157,600
60,000
3,300
63,300
174,500
Common Stock
Retained Earnings
Total Stockholders’ Equity
Total Liabilities and Stockholders’ Equity
Apex Printing
Income Statements
For the Periods Ended December 31, 2013 and 2012
Revenue:
Less: Cost of Goods Sold
Less: Depreciation Expense
Gross Margin
Selling, General & Administrative Expenses
Income Before Interest & Taxes
Interest Expense
Income Before Taxes
Income Taxes
Net Income
000$
000$
2013
2012
450,000
475,000
(324,300) (374,500)
(27,850) (26,000)
97,850
74,500
(29,100) (32,000)
68,750
42,500
(7,500)
(6,000)
61,250
36,500
(35,000) (30,000)
26,250
6,500
Apex Printing
Statement of Cash Flows
For the Period Ended December 31, 2013
000$
Cash Flows from Operating Activities:
Net Income
Adjustments to reconcile net income to net cash provided by
operating activities
Depreciation Expense
Increase in accounts receivable
Increase in inventory
Decrease in salaries payable
Increase in interest payable
Decrease in taxes payable
Increase in Short Term notes Payable
Increase in accounts payable
Net Cash Flow from Operating Activities
Cash Flows from Investing Activities:
Cash paid to purchase land
Net Cash Flow from Investing Activities
26,250
27,850
(50)
(5,600)
(2,100)
1,500
(5,600)
12,000
1,100
55,350
(5,000)
(5,000)
Cash Flows From Financing Activities:
Cash paid for mortgage
Cash paid for dividends
Net Cash Flow from Financing Activities
Net Increase in Cash
Plus: Cash Balance at December 31, 2012
Cash Balance at December 31, 2013
(45,050)
(5,000)
(50,050)
300
5,700
6,000
Apix Printing, Inc.
Financial Analysis
By Carla Dempsey
Colorado Technical University
Applied Managerial Finance
7/14/2020
Apix Printing, Inc
THIS PRESENTATION
FOCUSES ON PROVIDING THE
FINANCIAL ANALYSIS OF A
PRIVATE COMPANY KNOWN
AS APIX PRINTING, INC.
ITS PRODUCT LINES
INCLUDE: ADVERTISING,
INSERTS, AND
PERIODICALS.
ITS CEO (CHIEF
EXECUTIVE OFFICER) IS
CALLED JOHN
MATTHEWS.
The company hopes to expand in the food
packaging sector.
Expansion of
the Company
For expansion purposes, Apix Printing Inc
will need to make new investments
external finances from new shareholders.
The company will also have to make new
investments in substrate inventory,
promotional costs, and company
equipment.
Company Analysis
Three sectors of the company will be analyzed in
the subsequent slides which include:
 Assets

Profit
 Cash liabilities
ASSETS (Part 1 of the Balance sheet)
Liabilities (Part 2 of the Balance Sheet)
INCOME STATEMENT (Profit Analysis)
❖
➢
Calculations
Calculating the Net Income
Net income = total Revenue –total
expenses
➢

$6,500=2012

$26,250=2013
Hence, there was a weighty
increase throughout the time of the
year. Thus indicating room for
expansion and growth.
Cash Flow
Statements:
Cash Flow
from
Operating
Activities
Cash Flow Statements Continued….
Cash Flows from the company’s
investing Activities
Cash Flows from the company’s
Financing Activities
References
➢
Brunnermeier, M. K., & Sannikov, Y. (2014).
Monetary analysis: price and financial stability. In
Proceedings ECB Forum on Central Banking, Sintra
(pp. 61-80).
➢
CTU Online Course Overview, FINC615. 2015.
https://classroom.ctuonline.edu/app/classResourceRe
direct.html
References
➢
Hail, L. (2013). Financial reporting and firm
valuation: relevance lost or relevance regained?.
Accounting and Business Research, 43(4), 329-358.
➢
Wahlen, J. M., Baginski, S. P., & Bradshaw, M.
(2014). Financial reporting, financial statement
analysis and valuation. Nelson Education.

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