Appendix A: Financial Statements $$ Balance Sheet

EcoChic Handbags

Statement of financial position

As at December $31$

$202420232022$

ASSETS

Current Assets

Cash $1,8342,5601,983$

Inventories $371389365$

Prepaid expenses $275265259$

Total Current Assets $2,4803,2142,607$

Property, Plant and Equipment net $40,95643,51242,774$

Intangible assets $4,9834,9834,983$

Goodwill $2,2002,2002,200$

TOTAL ASSETS $50,61953,90952,564$

LIABILITIES & S$/$H EQUITY

Current liabilities

Trade payables $1,6921,6421,598$

Accrued Liabilities $2,1602,4302,295$

Income taxes payable $400350325$

Employee bonuses payable $1,2503,9751,850$

Current portion L$/$T debt $1,2751,2751,275$

Current portion redeem Preferred Shares $1,5001,5001,500$

Total current liabilities $8,27711,1728,843$

Long$-$term debt

Term loan bank $15,31116,58617,861$

Redeemable preferred shares $7,5009,00010,500$

Total long$-$term debt $22,81125,58628,361$

Total liabilities $31,08836,75837,204$

Shareholders' Equity

Share capital $4,0004,0004,000$

Retained earnings $---$

Total shareholders' equity $4,0004,0004,000$

TOTAL LIABILITIES & S$/$H EQUITY $35,08840,75841,204$

Appendix A continued: Financial Statements $$ Income Statement

EcoChic Handbags

Income Statement

As at December $31$

$202420232022$

REVENUES

Design revenue $41,05746,51145,117$

Product revenue $23,44524,22422,481$

Total Revenue $64,50270,73567,598$

EXPENSES

Design costs $24,14225,95323,270$

Product costs $5,8875,2615,176$

Advertising and promotion $718703695$

Amortization $4,6914,6404,628$

Employee wages and benefits $11,86813,07513,292$

Employee bonuses $1,2503,9751,850$

Rent $3,9264,0203,978$

Operating costs $7,4528,6599,520$

General and administrative $1,5362,0782,080$

Total Expenses $61,47068,36464,489$

Operating Income $3,0322,3713,109$

Interest income $222315$

Interest expense $(792)(851)(910)$

Foreign Exchange gain $($loss$)(93)(172)(55)$

Income before taxes $2,1691,3712,159$

Income taxes $(25\%)542343540$

Net earnings $1,6271,0281,619$

Appendix $2$ Industry Standard Ratios

Type Ratio Benchmark

Liquidity Current Ratio $0\mathrm{.}67$

Quick Ratio $0\mathrm{.}64$

Cash flow liquidity ratio $1$

Inventory Turnover $17$

Days to Sell Concession $21$

Accounts payable Turnover $10$

Accounts payable Payment Period $32$

Solvency Long term debt to equity $0\mathrm{.}47$

Debt to Equity $1\mathrm{.}2$

Debt to assets ratio $0\mathrm{.}54$

Times interest earned n$/$a

Cash Flow to Total Liabilities $1$

LTD to EBITDA n$/$a

Profitability Operating Margin $9\%$

Net Profit margin $6\%$

Return on sales $4\mathrm{.}70\%$

Return on Equity $4\mathrm{.}70\%$

Return on Assets $10\mathrm{.}40\%$

Design costs to design revenue $52\%$

Advertising as percentage of revenues $2\%$

General and admin as percentage of revenues $6\%$ what is break even point and margin of safety