2. Suppose the bank will not allow you to skip the $4 million principal payment and the bank will also not allow you to seek external financing of any kind (i.e. no debt or equity issuance). You still need to make the $16.0 mm capital expenditure and pay the $3 million dividend. By how many Days would you need to reduce Accounts Receivable Days to get the Balance Sheet to balance? What other balance sheet actions would you consider taking to get the balance sheet to balance in 2006?

3 2002 C 2003 2004 2005 Forecast Assumptions 1,75 73.66 57.60 1,850 77.60 60.12 1,957 82.71 64.26 2,085 89.12 69.35 2,200 Given in Case 95.367% increase 75.59 9% increase 1 2 3 Yards sold in thousands) 4 Average price per yard (in dollars) Average cost per yard (in dollars) 6 7 Income Statement ($1,000) & Revenue 9 Cost of goods sold 10 Gross margin 11 Gereral and administrative 12 13 Earnings before interest and taxes 14 Interest 15 Taxable income 36 Tax 17 78 Net income 19 20 Balance Sheet ($1,000) 21 Cash 22 33 Accounts receivable 128,978 143,560 161.863 185,815 209,788 Average Price Per Yard Yards Sold 100.857 111.203 125.756 144,594 166,300 Average Cost Per Yard Yards Sold 28,121 32,357 36,107 41.221 43,488 12,482 13,685 18,131 17,327 20.842 0.097 0.095 0.112 0.093 0.099 % of Sales 15,639 18,672 17,976 23,894 22,647 4,537 6,150 5.964 5,695 5,693 11.102 12,522 12,012 18,199 16,952 3.882 4,288 4,312 6,210 5,90 0.350 0.342 0.34 0.348 Avg Tax Rate = Tex/Taxable income 7.220 8.234 7.700 11.989 11,052 0.022 2,837 3,330 3,043 4,180 4,536 0.023 0.019 0.022 0.022 %. Of Sales 18,092 19,823 23.104 28,203 30.045 0.140 0.138 0.143 0.152 0.143 % Of Sales 3.349 4,238 4,233 4,615 5,774 0.033 0.038 0.034 0.032 0.035 % Of COGS 24,478 27,391 30,380 36,998 40.335 87,534 91,392 93.369 97,476 105.976 Prior Year PPE - CapX - Depreciation 112,012 118.783 123,949 134.474 146,331 8,891 9,609 11,067 0.088 0.086 0.088 5,313 3,713 6,490 0.042 0.040 0.040 24,204 15,322 17,557 55,000 75,000 71,000 42,808 28,462 35.392 112.012 118.783 123.949 13,334 14,808 0.094 0.089 % of COGS 7.897 8,379 0.042 0.042 % Of Sales 21.431 23,387 67,000 67,000 Total Assets - (Current Liabilities - Owner 46,043 55,032 Prior Year OE - NI - Dividends disloch 134,474 145.419 zs Inventory 25 27. Current 2 sets 28 Plant and equipment 29 Total Assets 30 Accounts payable 22 33 Other accrued expenses 34 35 Current liabilities 26 Long-term debt 37 Owners' equity 38 29 -10 Financial Statement Relations 45 Margins and Returns 42 Gross margin 43 Net margin Retum on book assets 45 Retum on book equity 46 Asser Ratios -47 Days receivables 48 Days inventory 49 Days payables 50 Total asset turnover s! Fixed asset turnover 3 Leverage Ratios 53 Debt to prior year EBITDA 54 Debt to total value (book) SS Interest coverage 56 21.80% 22.54% 22 31% 22 18% 20.73% 5.60% 5.74% 4.76% 6.45% 5 27% 6.45% 6.93% 6.21% 8.92% 7.55% 16.87% 28.93% 21.76% 26.04% 20.08% 51.20 12.84 32 18 50.40 13.91 31.54 121 1.57 52 10 12.29 32 12 55.40 11.65 34.16 1.38 1.92 5227 12.67 32.50 115 131 1.47 1.73 1.98 2.99 49 3.45 3.56 63% 3.04 2.91 57% 3.01 2.80 50% 4.20 222 46% 3.98