Please be as detailed as posible. X-Energy Services: Financial Statements for X-

Question

Please be as detailed as posible.

X-Energy Services: Financial Statements for X-Energy Services for 2017 and 2016. X-Energy Services is an oil and gas equipment services company operating in Texas with 1,772 employees. The company is a leading U.S. onshore completion and production services provider. The company delivers a full range of services that maximize production and prolong the product life of wells and provides completion solutions with strong customer relationships.

QUESTION(s):

a. Detail the strengths and weaknesses revealed from your analysis.

b. What suggestions do you have for management based on your analysis.

c. Would you invest in this firm? Why or why not?

Income Statement (000) 2017 2016 Total Revenue 543,660 282,354 Cost of Revenue 448,467 246,109 Gross Profit 95,193 36,245 Selling & Admin Exp. 41,515 37,652 Depreciaiton Expense 66,221 64,343 Total Operating Expense 107,736 101,995 Operating Income or Loss (12,543) (65,750) Interest & other expenses 60,126 31,447 Earnings before Tax (72,669) (97,197) Tax (4,987) (26,286) Net Income (67,682) (70,911) Dividends Paid 0 2,438 Addition to Ret. Earnings (67,682) (73,349)

Explanation / Answer

Strengths:

1)Revenue of the company increased by huge 92.54%

2)Gross profit margin, GPM = Gross Profit/ Revenue

For 2017, GPM = 18%, for 2016, GPM= 13%. GPM is increased for the company.

3) Debt to Equity ratio, D/E = (Short term Debt + Long term Debt)/ Total Equity

For 2017, D/E = (241,509+5,081)/287.358 = 0.86 <1 , means company's Equity is more than Debt , Since the company is in losses, it reduces the debt burden for company.

4) Company is maintaning good cash reserves.

Weakness:

b. Suggestions:

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