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Complete Questions 1, 2 & 3 on p. 144 (Ch.4). Post a 400- to 500-word response that analyzes the cash flow, evaluates the creditworthiness and discusses what information would be useful to creditors.
PetMed Express, Inc. and subsidiaries, d/b/a 1-800-PetMeds, is a leading nationwide pet pharmacy.The company markets prescription and nonprescription pet medications and health and nutritional supplements for dogs and cats direct to the consumer.The company offers consumers an attractive alternative for obtaining pet medications in terms of convenience, price, and speed of delivery. The company markets its products through national television, online, and direct mail advertising campaigns, which aim to increase the recognition of the 1-800-PetMeds brand name, increase traffic on its Web site, acquire new customers, and maximize repeat purchases.*
RequiredUsing the Consolidated Statements of Cash Flows on page 145, prepare a summary analysis for the yearsended March 31, 2004, 2003, and 2002. Analyze the cash flows for PetMed Express, Inc. for all three years.
What information from the balance sheet would be useful to a creditor in determining whether to loan PetMed Express, Inc. money? Evaluate the creditworthiness ofPetMed Express, Inc. based on only the cash flow statements.
To which NJcrazycat said: 1. Using the Consolidated Statements of Cash Flows on page 145, prepare a summary analysis for the years ended March 31, 2004, 2003, and 2002. Analyze the cash flows for PetMed Express, Inc. for all three years. 2. Evaluate the creditworthiness of PetMed Express, Inc. based on only the cash flow statements. 3. What information from the balance sheet would be useful to a creditor in determining whether to loan PetMed Express, Inc. money. PETMED EXPRESS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended March 31, 2004 2003 2002 Cash flows from operating activities: Net income $ 5,813,604 $ 3,257,565 $ 825,413 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 550,392 367,673 376,763 Tax benefit related to stock options exercised 588,872 171,587 (Gain) loss on disposal of property and equipment (15,000) 314,332 Deferred income taxes (581,356) Amortization of deferred membership fee revenue (140,048) Bad debt expense 7,432 15,027 6,862 (Increase) decrease in operating assets and liabilities: Accounts receivable (488,850) (375,397) (135,907) Inventories (6,911,712) (1,961,526) (1,675,226) Prepaid expenses and other current assets 245,890 (329,500) (126,494) Other assets 178,333 (150,000) (42,500) Accounts payable 702,603 696,535 1,508,542 Income taxes payable 251,693 170,752 Accrued expenses and other current liabilities 167,338 (296,059) (435,713) Net cash provided by operating activities 1,105,595 970,301 476,024 Cash flows from investing activities: Purchases of property and equipment (741,740) (744,596) (555,645) Purchases of intangible asset (365,000) Net proceeds from the sale of property and equipment 15,000 2,016,921 Net cash (used in) provided by investing activities (741,740) (1,094,596) 1,461,276 Cash flows from financing activities: Proceeds from the exercise of stock options and warrants 1,999,345 580,836 Payments on the line of credit (141,214) (Payments) borrowings on loan obligation (68,443) (68,442) 205,327 Payments on capital lease obligation (247,209) Payments on mortgage payable (1,566,833) Net cash provided by (used in) financing activities 1,930,902 371,180 (1,608,715) Net increase in cash and cash equivalents 2,294,757 246,885 328,585 Cash and cash equivalents, at beginning of year 984,169 737,284 408,699 Cash and cash equivalents, at end of year $ 3,278,926 $ 984,169 $ 737,284 Supplemental disclosure of cash flow information: Cash paid for interest $ 14,302 $ 30,675 $ 29,150 Cash paid for income taxes $ 2,513,214 $ 508,000 $ See accompanying notes to consolidated financial statements.
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