1. I need you to perform preliminary analytical procedures on the financial statements. a. Calculate common-size financial statements and dollar amount and percent changes. I suggest you simply make a copy of your spreadsheet from your pro-forma financial statements that I asked you to prepare yesterday and remove the adjustment columns. Have there been any significant changes that we need to examine closer? b. Calculate financial ratios. Assume the market value of the common stock is $24 million in both the current and prior years. Does anything jump out at you? c. If you have time, compare Apollo?s numbers with those of its closest competitors, Nike and Reebok. You can get those companies? numbers from EDGAR (www.sec.gov). I am not sure if industry averages are available, but that too would be helpful. 2. Write a brief memo (GA-4) highlighting what you believe are potential problem areas. Include printouts of your calculations as support (GA-4-1, GA-4-2, etc.)

Adjustments Acct # Account Title 10100 Cash on Hand 10200 Regular Checking Account 10300 Payroll Checking Account 10400 Savings Account 11000 Accounts Receivable 11400 Other Receivables 11500 Allowance for Doubtful Accounts 12000 Inventory 12300 Reserve for Inventory Obsolescence 14100 Prepaid Insurance 14200 Prepaid Rent 14300 Office Supplies 14400 Notes Receivable-Current 14700 Other Current Assets Total Current Assets W/P Ref Last Year's (Audited) $1,987.28 $198,116.52 $0.00 $3,044,958.13 $16,410,902.71 $1,262,819.88 $18,825,205.24 $3,012,000.00 $743,314.38 $200,000.00 $7,406.82 Current Year (Unaudited) $2,275.23 $532,125.92 $3,670,599.15 $49,780,259.98 $1,000,000.00 $1,254,009.75 $67,424,527.50 $867,000.00 $3,374,213.78 $8,540.00 $3,306,851.84 $123,671,531.81 15000 Land 15100 Buildings and Land Improvements 15200 Machinery, Equipment, Office Furniture 17000 Accum. Depreciation 19000 Investments 19900 Other Noncurrent Assets Total Assets $117,000.00 $623,905.92 $433,217.10 $164,000.00 $612,691.08 $13,840.59 $4,943,506.53 $117,000.00 $674,313.92 $2,929,097.13 $610,000.00 $2,038,780.39 $13,840.59 $128,834,563.84 20000 Accounts Payable 23100 Sales Tax Payable 23200 Wages Payable 23300 FICA Employee Withholding 23350 Medicare Withholding 23400 Federal Payroll Taxes Payable 23500 FUTA Tax Payable 23600 State Payroll Taxes Payable 23700 SUTA Tax Payable 23800 FICA Employer Withholding 23900 Medicare Employer Withholding 24100 Line of Credit 24200 Current Portion Long-Term Debt 24700 Other Current Liabilities 27000 Notes Payable-Noncurrent Total Liabilities $4,633,118.09 $0.00 $29,470.32 $1,318.69 $583.99 $6,033.01 $1,922,095.91 $2,815.47 $55,106.86 $1,318.69 $583.99 $10,000,000.00 $8,439.65 $11,414.99 $44,053,000.00 $14,675,242.25 $10,000,000.00 $56,187,998.17 $8,105,000.00 $7,743,000.00 $300,604,656.22 $331,127,898.47 $8,105,000.00 $7,743,000.00 $86,315,264.39 $158,351,262.56 39003 Common Stock 39004 Paid-in Capital 39005 Retained Earnings Total Liabilities and Owner's Equity $8,439.65 $11,414.99 $118,086.12 Dr. Cr. Current Year (Audited) Adjustments Acct # Account Title 40000 Sales - Spotlight 41000 Sales Returns 42000 Warranty Expense 45000 Income from Investments 46000 Interest Income 47000 Miscellaneous Income Total Revenue 50010 Cost of Goods Sold 57500 Freight 60000 Advertising Expense 61000 Auto Expenses 62000 Research and Development 64000 Depreciation Expense 64500 Warehouse Salaries 65000 Property Tax Expense 66000 Legal and Professional Expense 67000 Bad Debt Expense 68000 Insurance Expense 70000 Maintenance Expense 70100 Utilities 70110 Phone 70120 Postal 71000 Miscellaneous Office Expense 72000 Payroll Tax Exp 73000 Pension/Profit-Sharing Plan Ex 74000 Rent or Lease Expense 77500 Administrative Wages Expense 78000 Interest Expense 78500 Income Tax Expense - Federal 78510 Income Tax Expense - State Total Expense Net Income W/P Ref Last Year's (Audited) $246,172,918.44 $4,497,583.20 $1,100,281.48 $0.00 $204,302.81 $141,569,221.61 $393,544,307.54 Current Year (Unaudited) $245,213,452.88 $13,600,220.89 $1,158,128.47 $1,426,089.31 $131,881.46 $2,145,000.00 $263,674,773.01 $4,302,951.46 $897,140.01 $208,974.39 $31,212,334.17 $133,000.00 $4,633,383.82 $80,495.32 $3,605,133.96 $1,622,425.99 $853,942.65 $61,136.04 $135,642.99 $76,373.78 $128,033.21 $17,023.27 $1,550,989.06 $3,000,000.00 $2,603,485.87 $16,875,305.98 $875,000.00 $2,365,000.00 $429,000.00 $19,172,000.00 $94,838,771.97 $298,705,535.57 $130,246,645.26 $4,236,263.09 $986,854.01 $214,502.80 $543,870.44 $446,000.00 $4,720,715.56 $84,332.45 $4,902,224.45 $36,106.92 $49,502.87 $137,332.18 $52,599.02 $77,803.61 $24,891.82 $1,577,811.85 $3,300,000.00 $1,203,574.00 $16,197,225.43 $2,591,736.50 $10,000,000.00 $2,000,000.00 $183,629,992.26 $80,044,780.75 Dr. Cr. Current Year (Audited)