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Dynatronics Case Summary

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Dynatronics, Inc. Dynatronics, Inc. is a company which was formed in Burlington, Massachusetts in 1979 by three electrical engineers. The company produce digital systems with several lines of proprietary items sold as components and had considerable success since its founding. According to the tendency of increasing of customer demand they expanded it’s business to variety of special purpose systems that applied digital techniques to computing, control tasks, information handling, and data processing. The company faced to serious financial problems during the discussion before the introduction of new product line. Dynatronics’s financing opportunities were restricted by its current financial position, the external financial possibilities …show more content…

Analysis According the information above , we think there are several steps need to be taken to solve the corporate problems of Dynatronics, Inc.. 1. Analysis of current financial statements 2. Analysis and comparison of financial projection based on assumptions 3. Analysis of capital structure Analysis of current financial statements To identify financial strength and weaknesses of Dynatronics, Inc. it's necessary to determine financial performance of the company. Best way to analyze that is observation of net sales growth and return on equity for last 3 years. a. ROE (return on equity) ROE is an important variable to determine earning growth and dividend growth that reaveals how much profit a company earned in comparison to the total amount of shareholders equity. From balance sheet we can calculate ROE for 1986 - 0.67%; 1987- 13.0%; 1988- 24.0% and see that It increased annually Comparing to ROE of selected companies AMP Inc. 1986 - 14.5%; 1987- 18.5%; 1988- 19.5% Dynatech Corp. 1986 - 18.8%; 1987- 16.1%; 1988- 15.0% Analog Devices Inc. 1986 - 8.7%; 1987- 6.5%; 1988-

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