Faye Nguyen
MGA 306
Project part #2
Dear Dan Liebel, as the financial analyst for Amphenol Corporation here are the summarizing of
our 10k financial report. For the year ending in 2013 and 2012 there is a decrease in working capital as
you can see on the report. Just because there is a decrease from 1,818,401 to 1,547,689 that doesn’t
mean the company is doing badly. That just mean the company’s efficiency and its short-term financial
health is still stable since we just can’t only use one formula to determine it all. The current ratio also
decrease since is a ratio of the working capital from 3.05 to 1.96. The corporation is still in great shape
as in their ability to pay short-term obligations. We can see from this report is that from 2012 to 2013
there is an increase in days sales in receivables, days sales in inventory, and days in accounts payable.
For days sales receivable there is an increase in days to collect its account receivable. In 2013 it looks like
it will take the corporation more time to collect than 2012. Which this is not necessary a good thing but
we can’t use this to determine Amphenol overall health. Also the day’s sales in inventory are higher than
2012, which indicated it took them a longer time to convert their inventory to sales. Days in accounts
payable for 2013 is always higher than 2012, meaning it took them a longer time to pay its suppliers.
From the look of all of this 2012 is a better year for Amphenol than 2013. Cash conversion cycle from
2013 to 2012 also increase from 106.81 to 107.18 meaning Amphenol in 2013 took longer to convert
resource inputs into cash flows. Times interest earned also increase, even though is a higher number in
2013, but our company still be able to pay its debt obligations. At last the Altman Z-score measure the
possibility that the company will go into bankruptcy. In 2013 the z-score turn out to be 2.57 which are
close to 3, but still lower than previous year. Overall if you compare Amphenol corporation from 2013 to
2012 it looks like we are not doing better. That may be due to many things but overall the company is
still doing good elsewise.
1) Working capital: CA-CL
Current assets- current liabilities
2013
3,157,567-1,609,878= 1,547,689
2012
2,706,915-888,514= 1,818,401
2)Current ratio: current assets/ current liabilities
2013
3, 157,567/1, 609,878= 1.96
2012
2, 706,915/888,514= 3.05
3)Day sales in receivables : account receivable/net sales/365
2013
1,001,012/(4,614,669/365)= 79.18
2012
910,711/(4,292,065/365)= 77.45
4)Day sale in inventory: ending inventory/COGS/365
2013
792,644/(3,163,835/365)= 91.44
2012
733,718/(2,948,853/365)= 90.82
5)Days in account payable: ending account payable/COGS/365
2013
549,942/(3,163,835/365)= 63.44
2012
496,525/(2,948,853/365)= 61.46
6)Cash conversion cycle: DIO+DSO-DPO
2013
91.44+79.18-63.44= 107.18
2012
90.82+77.45+61.46= 106.81
7)Times interest earned: EBIT/interest charges
2013
(896,813/63,553)= 14.11
2012
(828,345/59,613)= 13.90
8) Altman Z-score
1.2(working capital/total assets)
2013
(1,547,689/6,168,028)*1.2= .30
2012
(1,818,401/5,215,463)*1.2= .42
1.4(retained earnings/total assets)
2013
(2,424,372/6,168,028)*1.4= .55
2012
(2,210,120/5,215,463)*1.4= .59
3.3(EBIT/total assets)
2013
(846,645/6,168,028)*3.3= .45
2012
(778,841/5,215,463)*3.3= .49
.6(Shareholders’ equity/total liabilities)
2013
(2,880,072/3,287,956)*.6= .53
2012
(2,442,182/2,773,281)*.6= .53
.99(sales/total assets)
2013
(4,614,669/6,168,028)*.99= .74
2012
(4,292,065/5,215,463)*.99= .81
Zscore=
2013=.3+.55+45+.53+.74= 2.57
2012=.42+.59+.49+.53+.81= 2.84