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.This week you will learn about the influence of the institutional structure on the form and content of financial statements and describe how financial data are assembled and integrated onto an articulated set of financial statements. This knowledge will be applied to the following scenario:

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.

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.

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.

“I’m beginning to notice that some of the investors don’t have a strong finance background, and the last thing we want to do is scare them off with too many financial figures” Mary explains. “I would like for you to complete a presentation. However, I want you to keep it simple and clear. Using all 3 Financial Statements, please provide an analysis on Apix’s assets, liabilities, cash, and profit. As well, choose 2 additional components on each of the sheets, and provide your initial impression on the company financial situation.”

Notes from Instructor on the Week 1 Individual Project assignment:

Please see the APIX Printing Financial Statements in the assignment link and in the Instructor Files. You are given 2 years of financial information. Discuss the trend in the data for the Assets, Liabilities and Income statements: what has changed, how much, increasing or decreasing. You are to take the Apix financial statements and explain the various sections. You are to provide a trend analysis by looking at the difference between the 2 years. This assignment is basically a restatement of what is in those financial statements. Provide the numbers in the main section of the PowerPoint and in the notes area put your explanations.

• Individual Project assignment due Wednesday
• Submit a PowerPoint slide presentation of 10 slides minimum
• A bulleted overview for Slide 1 for example, should reflect the company, industry, and so forth but each slide should have 150 words minimum of accompanying speaker notes with more detail.
• Organize your slides in this way.

Slide 1: Overview of Apix. What is this company? What is its business? What is the industry?

Slide 2: Explanation of company’s assets. What are the main contributions to assets?

Slide 3: Explanation of the company’s liabilities. What are the main liabilities?

Slide 4: Explanation of retained earnings and how retained earnings link the income statement to the balance sheet.

Slide 5: Explanation of the company’s cash flow from operating activities which is derived from net income plus add-back of noncash expenses, as well as short-term notes financing. Discuss how this differs from profit, indicating the distinction between cash and accrual basis reporting.

Slide 6: Explanation of the company’s cash flow from investing and financing activities. What is the primary use of cash for investing? What is the primary use of cash for financing?

Slide 7: What is the company’s profit for each year. Give a 2-year trend analysis of profits, assets and liabilities.

Slide 8: Choose 1 additional component, such as inventory, land or stockholder equity and provide a discussion of them.

Slide 9: Choose 1 additional component, such as inventory, land or stockholder equity and provide a discussion of them.

Slide 10: Summary