Problem Reed’s Company case (excel Answer)
1. Calculate a few ratios and compare Reed’s results with industry averages. (Some industry averages are shown in Exhibit 16.4.) What do these ratios indicate?
4. Assuming that Reed’s can improve its operations to be in line with the industry averages, construct a 1995 pro forma income statement. Assume that net sales will be reduced 5 percent to $1,938,000 but that depreciation and amortization will not change but remain at $32,000.