Chester has a new design for their product Cedar next round that can reduce their material cost of producing units from $8.14 to $7.32. Chester passes on half of all cost savings by cutting the current price to customers. For simplicity: - Use current labor costs of $4.14 - Assume all period costs as reported on Chester's Income Statement (Annual Rpt Pg 2) will remain the same. Determine how many units (000) of product Cedar would need to be sold next round to break even on the product. Select: 1 804 units. 1,005 units. 950 units. 1,306 units. 1,066 units. 1,355 units.

Page 1 Front Page Page 2 Stocks & Bonds Page 3 Financial Summary Page 4 Production Analysis Page 5 Thrift Segment Analysis Page 6 Core Segment Analysis Page 7 Nano Segment Analysis Page 8 Elite Segment Analysis Page 9 Market Share Page 10 Perceptual Map Page 11 HR/TQM Report Annual Report Andrews Annual Report Baldwin Annual Report Chester Annual Report Digby PRINT Top " Round: 3 Student: Ashley Abendschoen Dec. 31, 2015 Andrews Ashley Abendschoen Baldwin Chester Digby Ashley Abendschoen Selected Financial Statistics Andrews Baldwin Chester Digby 7.5% 1.0% -0.5% 12.0% 1.26 0.69 0.73 1.22 9.5% 0.7% -0.3% 14.6% 1.5 2.5 2.4 1.8 14.4% 1.8% -0.8% 25.9% $0 $0 $0 $0 Sales $164,860,228 $148,610,940 $176,860,288 $210,288,315 EBIT $23,469,071 $18,055,212 $15,545,291 $46,947,983 Profits $12,419,598 $1,524,917 ($811,187) $25,238,239 Cumulative Profit $17,452,556 $4,551,265 $7,308,011 $58,650,983 ROS Asset Turnover ROA Leverage (Assets/Equity) ROE Emergency Loan SG&A / Sales 11.6% 9.1% 12.2% 6.4% Contrib. Margin % 33.8% 36.2% 35.8% 37.0% COMP-XM INQUIRER Page 1 Top Round: 3 Stocks & Bonds Ashley Abendschoen December 31 , 2015 Stock Market Summary Shares MarketCap ($M) Book Value Company Close Change EPS Dividend Yield P/E Andrews $61.32 $19.90 2,051,504 $126 $41.97 $6.05 $0.00 0.0% 10.1 Baldwin $25.78 ($0.94) 3,303,330 $85 $25.69 $0.46 $0.00 0.0% 55.7 Chester $34.16 ($5.36) 3,114,879 $106 $32.53 ($0.26) $0.00 0.0% -131.7 Digby $114.78 $25.60 1,848,402 $212 $52.67 $13.65 $0.00 0.0% 8.4 Bond Market Summary Company Series# Face Yield Close$ S&P 11.1S2019 $8,837,000 11.3% 98.47 A 11.9S2020 $7,072,000 11.8% 101.09 A 11.4S2023 $13,834,000 11.5% 98.99 A 11.5S2025 $587,000 11.6% 99.43 A 11.3S2019 $9,416,000 12.4% 91.31 CC 12.5S2020 $13,681,781 13.3% 93.86 CC 12.5S2021 $12,413,327 13.4% 93.06 CC 12.5S2022 $9,112,764 13.5% 92.35 CC 13.4S2023 $15,955,273 14.0% 95.87 CC 13.9S2024 $29,113,430 14.2% 98.04 CC 14.1S2025 $2,651,855 14.2% 98.97 CC 11.2S2019 $8,044,881 12.2% 91.57 CC 12.4S2020 $7,997,731 13.2% 94.18 CC Andrews Baldwin Chester 12.0S2022 $16,568,420 13.2% 91.02 CC 13.0S2023 $15,859,805 13.7% 94.91 CC 13.6S2024 $32,690,583 13.9% 97.54 CC 13.7S2025 $21,397,770 14.0% 97.92 CC 11.2S2021 $3,596,962 11.9% 94.34 BB 11.2S2022 $6,293,079 11.9% 93.73 BB 12.0S2023 $1,598,747 12.4% 97.08 BB 12.0S2024 $15,697,879 12.4% 96.88 BB 12.5S2025 $12,275,526 12.6% 99.45 BB Digby Next Year's Prime Rate 9.00% COMP-XM INQUIRER Page 2 Top Financial Summary Cash Flow Statement Survey Ashley Abendschoen Round: 3 December 31, 2015 Andrews Baldwin Chester Digby $12,420 $1,525 ($811) $25,238 $7,041 $16,120 $17,970 $10,693 $0 $0 $0 $0 Cash flows from operating activities Net Income (Loss) Adjustment for non-cash items: Depreciation Extraordinary gains/losses/writeoffs Changes in current assets and liabilities: Accounts payable $3,308 $1,572 $3,237 $1,751 Inventory ($3,356) ($14,566) ($19,562) ($21,398) Accounts receivable ($2,836) ($42) ($2,360) ($1,845) Net cash from operations $16,576 $4,610 ($1,526) $14,440 ($14,548) ($22,100) ($56,386) ($42,300) Dividends paid $0 $0 $0 $0 Sales of common stock $0 $10,034 $20,513 $0 Purchase of common stock $0 $0 $0 ($2,328) $587 $2,652 $21,398 $12,276 $0 $0 $0 $0 ($10,300) ($41,710) ($32,770) ($30,480) $5,000 $28,643 $28,237 $23,512 $0 $0 $0 $0 Net cash from financing activities ($4,713) ($382) $37,378 $2,979 Net change in cash position ($2,684) ($17,872) ($20,535) ($24,881) Andrews Baldwin Chester Digby Cash $68,310 $36,914 $21,660 $21,134 Accounts Receivable $13,550 $12,215 $14,536 $17,284 $3,356 $14,566 $22,205 $31,072 Cash flows from investing activities Plant improvements (net) Cash flows from financing activities Cash from long term debt issued Early retirement of long term debt Retirement of current debt Cash from current debt borrowing Cash from emergency loan Balance Sheet Survey Inventory Total Current Assets $85,216 $63,694 $58,401 $69,490 Plant and equipment $105,608 $241,800 $269,546 $160,400 Accumulated Depreciation ($60,187) ($90,804) ($85,110) ($57,220) $45,421 $150,996 $184,436 $103,180 $130,637 $214,690 $242,838 $172,670 Accounts Payable $9,212 $8,843 $10,726 $12,333 Current Debt $5,000 $28,643 $28,237 $23,512 Long Term Debt $30,330 $92,344 $102,559 $39,462 Total Liabilities $44,542 $129,830 $141,522 $75,307 Common Stock $11,192 $47,163 $53,019 $7,686 Retained Earnings $74,903 $37,697 $48,297 $89,677 Total Equity $86,094 $84,860 $101,316 $97,363 Total Liabilities & Owners' Equity $130,637 $214,690 $242,838 $172,670 Income Statement Survey Andrews Baldwin Chester Digby Sales $164,860 $148,611 $176,860 $210,288 Variable Costs (Labor, Material, Carry) $109,124 $94,773 $113,601 $132,386 $7,041 $16,120 $17,970 $10,693 $19,197 $13,528 $21,648 $13,362 $6,029 $6,134 $8,096 $6,899 Total Fixed Assets Total Assets Depreciation SGA (R&D, Promo, Sales, Admin) Other (Fees, Writeoffs, TQM, Bonuses) EBIT $23,469 $18,055 $15,545 $46,948 Interest (Short term, Long term) $3,972 $15,661 $16,793 $7,328 Taxes $6,824 $838 ($437) $13,867 $253 $31 $0 $515 $12,420 $1,525 ($811) $25,238 Profit Sharing Net Profit COMP-XM INQUIRER Page 3 Top Production Analysis Ashley Abendschoen Round: 3 December 31, 2015 Production Information Unit Age Primary Units Inven Revision Dec. Pfmn Size ame Segment Sold tory Date 31 MTBF Coord Coord 2nd Shift Auto & mation Capacity Material Labor Contr. Over- Next Next Price Cost Cost Marg. time Round Round ft Core 1,386 0 2/28/201 5 1.8 22000 9.4 10.6 $24.00 $8.88 $7.90 29% 25% 6.0 1,123 ble Nano 1,287 0 5/31/201 5 1.5 24000 12.1 5.3 $35.00 $12.38 $10.30 35% 88% 5.0 693 cre Elite 1,287 0 5/26/201 1.5 26000 14.7 7.9 $40.00 $12.91 $10.33 42% 91% 5.0 683 5 dam Thrift 1,753 228 5/16/201 5 2.0 20000 7.7 12.3 $20.00 $7.11 $7.36 25% 89% 7.0 1,063 aker Thrift 1,890 239 6/9/2016 3.7 17000 7.8 12.2 $16.00 $6.80 $2.93 37% 43% 10.0 1,500 ead Thrift 1,978 250 6/9/2016 3.7 17000 8.0 12.0 $16.00 $6.96 $2.88 36% 36% 10.0 1,650 olt Core 1,711 319 12/16/20 14 2.1 18000 10.9 8.5 $24.00 $9.72 $4.73 37% 95% 8.0 1,150 old Core 1,903 325 12/18/20 14 2.1 20000 11.6 9.0 $24.00 $10.36 $4.65 35% 80% 8.0 1,400 ake Thrift 922 563 12/20/20 15 2.3 14000 8.5 11.5 $17.00 $6.82 $1.97 50% 25% 10.0 1,200 edar Core 1,877 203 12/7/201 3 3.1 16000 9.4 10.6 $19.00 $8.14 $4.14 33% 45% 10.0 1,450 id Nano 1,298 385 12/17/20 15 1.0 18000 12.9 4.4 $30.00 $12.74 $7.44 32% 100% 7.0 1,097 oat Elite 840 374 12/17/20 15 1.0 20000 16.0 6.9 $36.00 $13.59 $6.79 41% 38% 7.0 997 ure Core 1,580 4 12/25/20 15 0.9 16000 10.8 9.1 $21.00 $9.31 $5.61 31% 54% 8.0 1,040 amp Core 1,053 0 2/10/201 5 0.9 16000 10.5 9.5 $22.00 $9.03 $4.47 38% 100% 8.0 1,035 aze Nano 1,683 0 11/5/201 5 1.2 23000 13.5 4.5 $34.00 $13.66 $7.91 39% 100% 7.0 1,100 ell Elite 1,343 258 8/24/201 5 1.9 25000 16.3 6.5 $34.00 $14.56 $6.98 35% 81% 7.0 850 ixie Nano 1,378 577 7/3/2015 1.3 23000 14.0 4.0 $37.00 $14.04 $7.83 38% 90% 7.0 1,300 ot Elite 1,524 573 7/25/201 5 1.3 25000 16.1 6.2 $37.00 $14.57 $7.71 37% 77% 7.0 1,350 COMP-XM INQUIRER Page 4 Top Thrift Market Segment Analysis Ashley Abendschoen Thrift Statistics Total Industry Unit Demand 6,976 Actual Industry Unit Sales Round: 3 December 31, 2015 6,976 Segment % of Total Industry 26.1% Next Year's Segment Growth Rate 11.0% Thrift Customer Buying Criteria Expectations Importanc e 1. Price 2. Reliability 3. Ideal Position 4. Age $14.00 - 26.00 55% MTBF 14000-20000 20% Pfmn 8.0 Size 12.0 15% Ideal Age = 3.0 10% Perceptual Map for Thrift Segment Top Products in Thrift Segment Units Sold Market to Revision Stoc Pfmn Size Name Share Seg Date k Out Coord Coord Age Cust. Cust. Dec. List Dec. Promo Aware- Sales Access- Cust. Price MTBF 31 Budget ness Budget ibility Survey Baker 24% 1,703 6/9/2016 7.8 12.2 $16.00 17000 3.74 $1,250 78% $1,400 75% 54 Bead 24% 1,692 6/9/2016 8.0 12.0 $16.00 17000 3.66 $1,250 79% $1,400 75% 55 Adam 21% 1,473 5/16/201 5 7.7 12.3 $20.00 20000 2.01 $1,000 69% $2,000 83% 48 Cake 13% 896 12/20/20 15 8.5 11.5 $17.00 14000 2.25 $1,140 66% $1,000 72% 31 Cedar 10% 680 12/7/201 3 9.4 10.6 $19.00 16000 3.11 $1,140 67% $1,000 72% 24 Aft 5% 325 2/28/201 YES 5 9.4 10.6 $24.00 22000 1.79 $1,200 83% $2,000 83% 22 Cure 3% 179 12/25/20 15 10.8 9.1 $21.00 16000 0.88 $1,140 58% $900 72% 0 Camp 0% 27 2/10/201 YES 10.5 5 9.5 $22.00 16000 0.89 $1,140 51% $900 72% 3 COMP-XM INQUIRER Page 5 Top Core Market Segment Analysis Ashley Abendschoen Core Statistics Total Industry Unit Demand 8,886 Actual Industry Unit Sales Round: 3 December 31, 2015 8,886 Segment % of Total Industry 33.3% Next Year's Segment Growth Rate 10.0% Core Customer Buying Criteria Expectations Importanc e 1. Price $20.00 - 32.00 46% 2. Age Ideal Age = 2.0 20% MTBF 16000-22000 18% Pfmn 11.0 Size 9.0 16% 3. Reliability 4. Ideal Position Perceptual Map for Core Segment Top Products in Core Segment Units Sold Market to Revision Stoc Pfmn Size Name Share Seg Date k Out Coord Coord Age Cust. Cust. Dec. List Dec. Promo Aware- Sales Access- Cust. Price MTBF 31 Budget ness Budget ibility Survey Bold 20% 1,813 12/18/20 14 11.6 9.0 $24.00 20000 2.10 $1,250 78% $1,100 76% 50 Bolt 18% 1,602 12/16/20 14 10.9 8.5 $24.00 18000 2.10 $1,250 78% $1,100 76% 44 Cure 16% 1,401 12/25/20 15 10.8 9.1 $21.00 16000 0.88 $1,140 58% $900 72% 38 Cedar 13% 1,196 12/7/201 3 9.4 10.6 $19.00 16000 3.11 $1,140 67% $1,000 72% 26 Aft 12% 1,061 2/28/201 YES 5 9.4 10.6 $24.00 22000 1.79 $1,200 83% $2,000 72% 49 Camp 12% 1,026 2/10/201 YES 10.5 5 $22.00 16000 0.89 $1,140 51% $900 72% 31 9.5 Bead 3% 285 6/9/2016 8.0 12.0 $16.00 17000 3.66 $1,250 79% $1,400 76% 2 Adam 3% 279 5/16/201 5 7.7 12.3 $20.00 20000 2.01 $1,000 69% $2,000 72% 0 Baker 2% 187 6/9/2016 7.8 12.2 $16.00 17000 3.74 $1,250 78% $1,400 76% 0 Cake 0% 26 12/20/20 15 8.5 11.5 $17.00 14000 2.25 $1,140 66% $1,000 72% 8 Able 0% 6 5/31/201 YES 12.1 5 5.3 $35.00 24000 1.50 $2,500 100% $2,000 72% 0 Daze 0% 3 11/5/201 YES 13.5 5 4.5 $34.00 23000 1.24 $1,350 87% 11% 0 COMP-XM INQUIRER $1,000 Page 6 Top Nano Market Segment Analysis Ashley Abendschoen Round: 3 December 31, 2015 Nano Statistics Total Industry Unit Demand 5,405 Actual Industry Unit Sales 5,405 Segment % of Total Industry 20.3% Next Year's Segment Growth Rate 14.0% Nano Customer Buying Criteria Expectations Importanc e 1. Ideal Position Pfmn 12.9 Size 4.2 35% 2. Price $28.00 - 40.00 27% 3. Age Ideal Age = 1.0 20% MTBF 18000-24000 18% 4. Reliability Perceptual Map for Nano Segment Top Products in Nano Segment Units Sold Market to Revision Stoc Pfmn Size Name Share Seg Date k Out Coord Coord Dixie 25% 1,324 7/3/2015 Daze Age Cust. Cust. Dec. List Dec. Promo Aware- Sales Access- Cust. Price MTBF 31 Budget ness Budget ibility Survey 14.0 4.0 $37.00 23000 1.34 $1,350 87% $900 83% 48 24% 1,319 11/5/201 YES 13.5 5 4.5 $34.00 23000 1.24 $1,350 87% $1,000 83% 62 Cid 22% 1,172 12/17/20 15 12.9 4.4 $30.00 18000 1.03 $1,140 67% $1,900 70% 46 Able 19% 1,043 5/31/201 YES 12.1 5 5.3 $35.00 24000 1.50 $2,500 100% $2,000 92% 65 Acre 3% 168 5/26/201 YES 14.7 5 7.9 $40.00 26000 1.54 $2,500 100% $2,000 92% 5 Bolt 2% 109 12/16/20 14 10.9 8.5 $24.00 18000 2.10 $1,250 78% $1,100 18% 2 Dot 2% 92 7/25/201 5 16.1 6.2 $37.00 25000 1.34 $1,350 87% $900 83% 0 Bold 2% 90 12/18/20 14 11.6 9.0 $24.00 20000 2.10 $1,250 78% $1,100 18% 1 Coat 1% 69 12/17/20 15 16.0 6.9 $36.00 20000 1.04 $1,140 67% $2,200 70% 0 Dell 0% 19 8/24/201 5 16.3 6.5 $34.00 25000 1.90 $1,350 87% $1,000 83% 0 COMP-XM INQUIRER Page 7 Top Elite Market Segment Analysis Ashley Abendschoen Round: 3 December 31, 2015 Elite Statistics Total Industry Unit Demand 5,426 Actual Industry Unit Sales 5,426 Segment % of Total Industry 20.3% Next Year's Segment Growth Rate 16.0% Elite Customer Buying Criteria Expectations Importanc e 1. Age Ideal Age = 0.0 34% 2. Price $30.00 - 42.00 24% Pfmn 15.8 Size 7.1 22% MTBF 20000-26000 20% 3. Ideal Position 4. Reliability Perceptual Map for Elite Segment Top Products in Elite Segment Units Sold Market to Revision Stoc Pfmn Size Name Share Seg Date k Out Coord Coord Age Cust. Cust. Dec. List Dec. Promo Aware- Sales Access- Cust. Price MTBF 31 Budget ness Budget ibility Survey Dot 26% 1,433 7/25/201 5 16.1 6.2 $37.00 25000 1.34 $1,350 87% $900 87% 48 Dell 24% 1,324 8/24/201 5 16.3 6.5 $34.00 25000 1.90 $1,350 87% $1,000 87% 47 Acre 21% 1,119 5/26/201 YES 14.7 5 7.9 $40.00 26000 1.54 $2,500 100% $2,000 93% 46 Coat 14% 771 12/17/20 15 16.0 6.9 $36.00 20000 1.04 $1,140 67% $2,200 69% 30 Daze 7% 361 11/5/201 YES 13.5 5 4.5 $34.00 23000 1.24 $1,350 87% $1,000 87% 8 Able 4% 238 5/31/201 YES 12.1 5 5.3 $35.00 24000 1.50 $2,500 100% $2,000 93% 7 Cid 2% 126 12/17/20 15 12.9 4.4 $30.00 18000 1.03 $1,140 67% $1,900 69% 1 Dixie 1% 54 7/3/2015 14.0 4.0 $37.00 23000 1.34 $1,350 87% $900 87% 1 COMP-XM INQUIRER Page 8 Top Market Share Report Ashley Abendschoen Actual Market Share in Units Thrift Core Nano Elite Industry Unit Total 6,976 8,886 5,405 5,426 26,693 Round: 3 December 31, 2015 Sales % of Market Aft 26.1% 4.7% 33.3 20.3 20.3% % % 100.0 % 11.9 % 5.2% Able 0.1% 19.3% 4.4% 4.8% Acre 3.1% 20.6 % 4.8% Adam 21.1% 3.1% 6.6% Total 25.8% Baker 24.4% 2.1% 7.1% Bead 24.3% 3.2% 7.4% 15.2 25.0 22.4% % % 21.4% Bolt 18.0 2.0% % 6.4% Bold 20.4 1.7% % 7.1% 43.7 3.7% % 28.0% Total 48.7% Cake 12.8% 0.3% 3.5% 13.5 % 7.0% Cedar 9.8% Cid 21.7% 2.3% Coat 4.9% 14.2 % 3.1% 1.3% Cure 2.6% 15.8 % 5.9% Camp 0.4% 11.6 % 4.0% Total 25.6% 41.1 23.0% 16.5 28.4% % % Daze 0.0% 24.4% 6.7% 6.3% Dell 0.3% 24.4 % 5.0% 24.5% 1.0% 5.2% 1.7% 26.4 % 5.7% 0.0% 50.9% 58.5 % 22.2% Dixie Dot Total Potential Market Share in Units Thrift Core Nano Elite Total Units 6,976 8,886 5,405 5,426 Demanded 26,693 % of Market Aft 26.1% 33.3% 20.3% 20.3% 7.9% 20.4% 100.0% 8.9% Able 0.1% 29.6% 6.6% 7.4% Acre 3.8% 26.1% 6.1% Adam 20.4% 2.8% 6.3% Total 28.3% 23.3% 33.4% 32.7% Baker 23.6% 1.9% 6.8% Bead 23.4% 2.9% 7.1% 28.6% Bolt 15.9% 1.7% 5.6% Bold 18.0% 1.4% 6.3% Total 47.0% 38.7% 3.0% 25.8% Cake 12.4% 0.3% 3.3% Cedar 9.4% 12.0% 6.5% Cid 17.7% 2.1% 4.0% Coat 1.0% 12.7% 2.8% Cure 2.5% 14.6% 5.5% Camp 0.4% 11.0% 3.8% Total 24.7% 38.0% 18.8% 14.7% 25.9% Daze 23.0% 6.4% 6.0% Dell 0.3% 21.8% 4.5% Dixie 20.1% 0.9% 4.2% 1.4% 23.6% 5.1% 0.0% 44.8% 52.6% 19.8% Dot Total COMP-XM INQUIRER Page 9 Top Perceptual Map Ashley Abendschoen Round: 3 December 31, 2015 Perceptual Map for All Segments Andrews Name Pfmn Size Chester Revised Name Pfmn Size Digby Revised Name Pfmn Size Revised Aft 9.4 10.6 2/28/2015 Cake 8.5 11.5 12/20/2015 Daze 13.5 4.5 11/5/2015 Able 12.1 5.3 5/31/2015 Cedar 9.4 10.6 12/7/2013 Dell 16.3 6.5 8/24/2015 Acre 14.7 7.9 5/26/2015 Cid 12.9 4.4 12/17/2015 Dixie 14.0 4.0 7/3/2015 Adam 7.7 12.3 5/16/2015 Coat 16.0 6.9 12/17/2015 Dot 16.1 6.2 7/25/2015 Cure 10.8 9.1 12/25/2015 Name Pfmn Size Revised Camp 10.5 9.5 2/10/2015 Baker 7.8 12.2 6/9/2016 Bead 8.0 12.0 6/9/2016 Bolt 10.9 8.5 12/16/2014 Baldwin Bold 11.6 9.0 12/18/2014 COMP-XM INQUIRER Page 10 Top HR/TQM Report Round: 3 December 31, 2015 Ashley Abendschoen HUMAN RESOURCES SUMMARY Andrews Baldwin Chester Digby Needed Complement 741 458 650 709 Complement 740 458 650 709 1st Shift Complement 437 279 408 380 2nd Shift Complement 303 179 242 330 Overtime% 0.1% 0.0% 0.0% 0.0% Turnover Rate 6.9% 8.0% 6.2% 10.0% 283 83 188 95 0 0 0 0 New Employees Separated Employees Recruiting Spend $2,500 $2,500 $5,000 $0 80 40 80 0 108.5% 115.1% 124.2% 100.0% Recruiting Cost $991 $290 $1,125 $95 Separation Cost $0 $0 $0 $0 Training Cost $1,184 $366 $1,040 $0 Total HR Admin Cost $2,175 $657 $2,165 $95 $29.56 $29.56 $29.56 $29.56 Benefits 2,500 2,500 2,500 2,500 Profit Sharing 2.0% 2.0% 2.0% 2.0% Annual Raise 5.0% 5.0% 5.0% 5.0% Training Hours Productivity Index Labor Contract Next Year Wages Starting Negotiation Position Wages Benefits Profit Sharing Annual Raise Ceiling Negotiation Position Wages Benefits Profit Sharing Annual Raise Adjusted Labor Demands Wages Benefits Profit Sharing Annual Raise Strike Days TQM SUMMARY Andrews Baldwin Chester Digby CPI Systems $0 $1,250 $1,500 $0 Vendor/JIT $0 $1,250 $1,500 $0 Quality Initiative Training $1,000 $0 $0 $1,250 Channel Support Systems $1,000 $1,500 $0 $1,250 Concurrent Engineering $1,000 $0 $0 $1,250 UNEP Green Programs $0 $0 $1,500 $0 $0 $0 $1,500 $0 $1,000 $0 $0 $0 Process Mgt Budgets Last Year TQM Budgets Last Year Benchmarking Quality Function Deployment Effort CCE/6 Sigma Training $1,000 $750 $0 $1,250 GEMI TQEM Sustainability Initiatives $1,000 $750 $0 $1,250 Total Expenditures $6,000 $5,500 $6,000 $6,250 Material Cost Reduction 11.73% 6.03% 1.41% 6.43% Labor Cost Reduction 14.00% 1.78% 0.05% 13.93% Reduction R&D Cycle Time 40.01% 0.00% 0.00% 39.79% Reduction Admin Costs 60.02% 16.23% 43.11% 0.00% Demand Increase 14.40% 5.47% 0.45% 9.37% Cumulative Impacts COMP-XM INQUIRER Page 11 PRINT Annual Report Top Annual Report Andrews C53395 Balance Sheet DEFINITIONS: Common Size: The common size column simply represents each item as a percentage of total assets for that year. Cash: Your end-of-year cash position. Accounts Receivable: Reflects the lag between delivery and payment of your products. Inventories: The current value of your inventory across all products. A zero indicates your company stocked out. Unmet demand would, of Round: 3 Dec. 31, 2015 course, fall to your competitors. Plant & Equipment: The current value of your plant. Accum Deprec: The total accumulated depreciation from your plant. Accts Payable: What the company currently owes suppliers for materials and services. Current Debt: The debt the company is obligated to pay during the next year of operations. It includes emergency loans used to keep your company solvent should you run out of cash during the year. Long Term Debt: The company's long term debt is in the form of bonds, and this represents the total value of your bonds. Common Stock: The amount of capital invested by shareholders in the company. Retained Earnings: The profits that the company chose to keep instead of paying to shareholders as dividends. ASSETS 2015 2014 Common Size Cash $68,310 52.3% $70,994 Accounts Receivable $13,550 10.4% $10,714 $3,356 2.6% $0 65.2% $81,708 Inventory Total Current Assets $85,216 Plant & Equipment $105,608 80.8% $91,060 Accumulated Depreciation ($60,187) -46.1% ($53,147) $45,421 34.8% $37,913 $130,637 100.0% $119,622 Total Fixed Assets Total Assets LIABILITIES & OWNERS' EQUITY Accounts Payable $9,212 7.1% $5,904 Current Debt $5,000 3.8% $10,300 $30,330 23.2% $29,743 34.1% $45,947 Long Term Debt Total Liabilities $44,542 Common Stock $11,192 8.6% $11,192 Retained Earnings $74,903 57.3% $62,483 $86,095 65.9% $73,675 $130,637 100.0% $119,622 Total Equity Total Liab. & O. Equity Cash Flow Statement The Cash Flow Statement examines what happened in the Cash Account during the year. Cash injections appear as positive numbers and cash withdrawals as negative numbers. The Cash Flow Statement is an excellent tool for diagnosing emergency loans. When negative cash flows exceed positives, you are forced to seek emergency funding. For example, if sales are bad and you find yourself carrying an abundance of excess inventory, the report would show the increase in inventory as a huge negative cash flow. Too much unexpected inventory could outstrip your inflows, exhaust your starting cash and force you to beg for money to keep your company afloat. Cash Flows from Operating Activities: Net Income (Loss) Depreciation Extraordinary gains/losses/writeoffs Accounts Payable 2015 2014 $12,420 $1,219 $7,041 $6,071 $0 $0 $3,308 ($375) Inventory ($3,356) $12,312 Accounts Receivable ($2,836) Net cash from operations $16,576 $20,125 $899 Cash Flows from Investing Activities: Plant Improvements ($14,548) $0 $0 $0 Cash Flows from Financing Activities: Dividends Paid Sales of Common Stock $0 $0 Purchase of Common Stock $0 $0 $587 $0 $0 ($10,300 ) Change in current debt (net) ($5,300) $5,300 Net cash from financing activities ($4,713) ($5,000) Net change in cash position ($2,684) $15,125 Closing cash position $68,310 $70,994 Cash from long term debt Retirement of long term debt Annual Report Page 1 Top Annual Report Andrews Round: 3 Dec. 31, 2015 C53395 2015 Income Statement (Product Name:) Able Acre 2015 Common Total Size Adam Na Na Na Na $33,269 $45,052 $51,488 $35,050 $0 $0 $0 $0 $164,860 100.0% Direct Labor $10,950 $13,258 $13,298 $12,897 $0 $0 $0 $0 $50,403 30.6% Direct Material $0 $0 $0 $0 $58,318 35.4% Sales Aft Variable Costs: $12,651 $15,991 $16,754 $12,922 Inventory Carry $403 $0 $0 $0 $0 $403 0.2% $23,601 $29,249 $30,052 $26,222 $0 $0 $0 $0 $109,124 66.2% $9,668 $15,803 $21,436 $8,828 $0 $0 $0 $0 $55,736 33.8% $2,246 $1,201 $1,184 $2,409 $0 $0 $0 $0 $7,041 4.3% $376 $0 $0 $0 $0 $1,360 0.8% Promotions $1,200 $2,500 $2,500 $1,000 $0 $0 $0 $0 $7,200 4.4% Sales $0 $0 $0 $0 $8,000 4.9% $561 $0 $0 $0 $0 $2,636 1.6% Total Period $6,140 $6,840 $6,911 $6,346 $0 $0 $0 $0 $26,237 15.9% Net Margin $3,528 $8,963 $14,525 $2,483 $0 $0 $0 $0 $29,498 17.9% Total Variable Contribution Margin $0 $0 $0 Period Costs: Depreciation SG&A: R&D Admin $162 $419 $404 $2,000 $2,000 $2,000 $2,000 $532 $720 $823 Definitions: Sales: Unit sales times list price. Direct Labor: Labor costs incurred to produce the product that was sold. Inventory Carry Cost: the cost to carry unsold goods in inventory. Depreciation: Calculated on straight-line 15-year depreciation of plant value. R&D Costs: R&D department expenditures for each product. Admin: Administration overhead is estimated at 1.5% of sales. Promotions: The promotion budget for each product. Sales: The sales force budget for each product. Other: Charges not included in other categories such as Fees, Write Offs, and TQM. The fees include money paid to investment bankers and brokerage firms to issue new stocks or bonds plus consulting fees your instructor might assess. Write-offs include the loss you might experience when you sell capacity or liquidate inventory as the result of eliminating a production line. If the amount appears as a negative amount, then you actually made money on the liquidation of capacity or inventory. EBIT: Earnings Before Interest and Taxes. Short Term Interest: Interest expense based on last year's current debt, including short term debt, long term notes that have become due, and emergency loans. Long Term Interest: Interest paid on outstanding bonds. Taxes: Income tax based upon a 35% tax rate. Profit Sharing: Profits shared with employees under the labor contract. Net Profit: EBIT minus interest, taxes, and profit sharing. Other $6,029 3.7% EBIT $23,469 14.2% Short Term Interest $505 0.3% LongTerm Interest $3,467 2.1% Taxes $6,824 4.1% Profit Sharing Net Profit $253 0.2% $12,420 7.5% Annual Report Page 2 PRINT Annual Report Top Annual Report Baldwin C53395 Balance Sheet DEFINITIONS: Common Size: The common size column simply represents each item as a percentage of total assets for that year. Cash: Your end-of-year cash position. Accounts Receivable: Reflects the lag between delivery and payment of your products. Inventories: The current value of your inventory across all products. A zero indicates your company stocked out. Unmet demand would, of course, fall to your competitors. Plant & Equipment: The current value of your plant. Accum Deprec: The total accumulated depreciation from your plant. Accts Payable: What the company currently owes suppliers for materials and services. Current Debt: The debt the company is obligated to pay during the next year of operations. It includes emergency loans used to keep your company solvent should you run out of cash during the year. Long Term Debt: The company's long term debt is in the form of bonds, and this represents the total value of your bonds. Common Stock: The amount of capital invested by shareholders in the company. Retained Earnings: The profits that the company chose to keep instead of paying to shareholders as dividends. ASSETS 2015 2014 Common Size Cash $36,914 17.2% $54,786 Round: 3 Dec. 31, 2015 Accounts Receivable $12,215 5.7% $12,173 Inventory $14,566 6.8% $0 29.7% $66,959 Total Current Assets $63,695 Plant & Equipment $241,800 112.6% $219,700 Accumulated Depreciation ($90,804) -42.3% ($74,684) Total Fixed Assets $150,996 70.3% $145,016 Total Assets $214,690 100.0% $211,974 $8,843 4.1% $7,271 Current Debt $28,643 13.3% $41,710 Long Term Debt $92,344 43.0% $89,693 60.5% $138,674 LIABILITIES & OWNERS' EQUITY Accounts Payable Total Liabilities $129,830 Common Stock $47,163 22.0% $37,129 Retained Earnings $37,697 17.6% $36,172 $84,860 39.5% $73,301 $214,690 100.0% $211,974 Total Equity Total Liab. & O. Equity Cash Flow Statement The Cash Flow Statement examines what happened in the Cash Account during the year. Cash injections appear as positive numbers and cash withdrawals as negative numbers. The Cash Flow Statement is an excellent tool for diagnosing emergency loans. When negative cash flows exceed positives, you are forced to seek emergency funding. For example, if sales are bad and you find yourself carrying an abundance of excess inventory, the report would show the increase in inventory as a huge negative cash flow. Too much unexpected inventory could outstrip your inflows, exhaust your starting cash and force you to beg for money to keep your company afloat. Cash Flows from Operating Activities: 2015 Net Income (Loss) $1,525 ($1,888) Depreciation Extraordinary gains/losses/writeoffs Accounts Payable Inventory Accounts Receivable Net cash from operations 2014 $16,120 $14,647 $0 $0 $1,572 ($1,915) ($14,566) $9,803 ($42) $784 $4,610 $21,431 Cash Flows from Investing Activities: Plant Improvements ($22,100) ($40,140) Cash Flows from Financing Activities: Dividends Paid $0 $10,034 Purchase of Common Stock Cash from long term debt $8,475 $0 Sales of Common Stock $0 $0 $2,652 $29,113 Retirement of long term debt Change in current debt (net) $0 ($10,300) ($13,067) $16,043 Net cash from financing activities ($382) $43,331 Net change in cash position ($17,872) $24,622 Closing cash position $36,914 $54,786 Annual Report Page 1 Top Annual Report Baldwin Round: 3 Dec. 31, 2015 C53395 2015 Income Statement (Product Name:) Sales Variable Baker Bead Bolt 2015 Common Total Size Bold Na Na Na Na $30,235 $31,643 $41,058 $45,675 $0 $0 $0 $0 $148,611 100.0% Costs: Direct Labor $5,528 $5,700 $8,090 $8,848 $0 $0 $0 $0 $28,166 19.0% $13,281 $14,212 $17,110 $20,256 $0 $0 $0 $0 $64,859 43.6% $596 $0 $0 $0 $0 $1,748 1.2% $19,095 $20,214 $25,764 $29,701 $0 $0 $0 $0 $94,773 63.8% Contribution $11,140 $11,429 $15,295 $15,974 Margin $0 $0 $0 $0 $53,838 36.2% 10.8% Direct Material Inventory Carry Total Variable $286 $302 $564 Period Costs: Depreciation $4,600 $5,060 $2,913 $3,547 $0 $0 $0 $0 $16,120 SG&A: R&D $1,000 $1,000 $0 $0 $0 $0 $0 $2,000 1.3% Promotions $1,250 $1,250 $1,250 $1,250 $0 $0 $0 $0 $5,000 3.4% Sales $0 $0 $0 $0 $5,000 3.4% $470 $0 $0 $0 $0 $1,528 1.0% Total Period $8,561 $9,035 $5,686 $6,366 $0 $0 $0 $0 $29,648 20.0% Net Margin $2,579 $2,394 $9,609 $9,608 $0 $0 $0 $0 $24,189 16.3% Admin $0 $1,400 $1,400 $1,100 $1,100 $311 $325 $422 Definitions: Sales: Unit sales times list price. Direct Labor: Labor costs incurred to produce the product that was sold. Inventory Carry Cost: the cost to carry unsold goods in inventory. Depreciation: Calculated on straight-line 15-year depreciation of plant value. R&D Costs: R&D department expenditures for each product. Admin: Administration overhead is estimated at 1.5% of sales. Promotions: The promotion budget for each product. Sales: The sales force budget for each product. Other: Charges not included in other categories such as Fees, Write Offs, and TQM. The fees include money paid to investment bankers and brokerage firms to issue new stocks or bonds plus consulting fees your instructor might assess. Write-offs include the loss you might experience when you sell capacity or liquidate inventory as the result of eliminating a production line. If the amount appears as a negative amount, then you actually made money on the liquidation of capacity or inventory. EBIT: Earnings Before Interest and Taxes. Short Term Interest: Interest expense based on last year's current debt, including short term debt, long term notes that have become due, and emergency loans. Long Term Interest: Interest paid on outstanding bonds. Taxes: Income tax based upon a 35% tax rate. Profit Sharing: Profits shared with employees under the labor contract. Net Profit: EBIT minus interest, taxes, and profit sharing. Other $6,134 4.1% EBIT $18,055 12.1% Short Term Interest $3,638 2.4% LongTerm Interest $12,024 8.1% Taxes Profit Sharing Net Profit Annual Report $838 0.6% $31 0.0% $1,525 1.0% Page 2 PRINT Annual Report Top Annual Report Chester C53395 Balance Sheet DEFINITIONS: Common Size: The common size column simply represents each item as a percentage of total assets for that year. Cash: Your end-of-year cash position. Accounts Receivable: Reflects the lag between delivery and payment of your products. Inventories: The current value of your inventory across all products. A zero indicates your company stocked out. Unmet demand would, of course, fall to your competitors. Plant & Equipment: The current value of your plant. Accum Deprec: The total accumulated depreciation from your plant. Accts Payable: What the company currently owes suppliers for materials and services. Current Debt: The debt the company is obligated to pay during the next year of operations. It includes emergency loans used to keep your company solvent should you run out of cash during the year. Long Term Debt: The company's long term debt is in the form of bonds, and this represents the total value of your bonds. Common Stock: The amount of capital invested by shareholders in the company. Retained Earnings: The profits that the company chose to keep instead of paying to shareholders as dividends. Round: 3 Dec. 31, 2015 ASSETS 2015 2014 Common Size Cash $21,660 8.9% $42,195 Accounts Receivable $14,536 6.0% $12,177 Inventory $22,205 9.1% $2,643 24.0% $57,015 Total Current Assets $58,401 Plant & Equipment $269,546 111.0% $213,160 Accumulated Depreciation ($85,110) -35.0% ($67,140) Total Fixed Assets $184,436 76.0% $146,020 Total Assets $242,838 100.0% $203,035 LIABILITIES & OWNERS' EQUITY Accounts Payable $10,726 4.4% $7,489 Current Debt $28,237 11.6% $32,770 $102,559 42.2% $81,161 58.3% $121,420 Long Term Debt Total Liabilities $141,522 Common Stock $53,019 21.8% $32,506 Retained Earnings $48,297 19.9% $49,108 41.7% $81,614 Total Equity $101,316 Total Liab. & O. Equity $242,838 100.0% $203,035 Cash Flow Statement The Cash Flow Statement examines what happened in the Cash Account during the year. Cash injections appear as positive numbers and cash withdrawals as negative numbers. The Cash Flow Statement is an excellent tool for diagnosing emergency loans. When negative cash flows exceed positives, you are forced to seek emergency funding. For example, if sales are bad and you find yourself carrying an abundance of excess inventory, the report would show the increase in inventory as a huge negative cash flow. Too much unexpected inventory could outstrip your inflows, exhaust your starting cash and force you to beg for money to keep your company afloat. Cash Flows from Operating Activities: 2015 2014 Net Income (Loss) ($811) $3,130 Depreciation Extraordinary gains/losses/writeoffs Accounts Payable Inventory $17,970 $12,851 $0 $0 $3,237 $1,202 ($19,562) $4,866 Accounts Receivable ($2,360) ($2,326) Net cash from operations ($1,526) $19,722 Cash Flows from Investing Activities: Plant Improvements ($56,386) ($51,660 ) $0 $0 Cash Flows from Financing Activities: Dividends Paid Sales of Common Stock Purchase of Common Stock Cash from long term debt Retirement of long term debt $20,513 $16,010 $0 $0 $21,398 $32,691 $0 ($10,300 ) Change in current debt (net) ($4,533) $11,332 Net cash from financing activities $37,378 $49,732 Net change in cash position Closing cash position ($20,535) $17,794 $21,660 $42,195 Annual Report Page 1 Top Annual Report Chester C53395 Round: 3 Dec. 31, 2015 2015 Income Statement (Product 2015 Common Sales $15,677 $35,657 $38,944 $30,227 $33,188 $23,167 $0 $0 $176,860 100.0% Direct Labor $1,820 $7,764 $9,662 $5,774 $8,865 $4,703 $0 $0 $38,588 21.8% Direct Material $5,464 $15,772 $16,049 $11,124 $14,158 $9,782 $0 $0 $72,349 40.9% $0 $0 $0 $2,665 1.5% Total Variable $7,818 $23,841 $26,626 $17,802 $23,030 $14,484 $0 $0 $113,601 64.2% Contribution Margin $7,859 $11,816 $12,317 $12,425 $10,158 $8,683 $0 $0 $63,259 35.8% $3,680 $4,447 $2,487 $2,260 $2,635 $2,462 $0 $0 $17,970 10.2% $114 $0 $0 $4,039 2.3% Promotions $1,140 $1,140 $1,140 $1,140 $1,140 $1,140 $0 $0 $6,840 3.9% Sales Variable Costs: Inventory Carry $534 $305 $915 $904 $7 Period Costs: Depreciation SG&A: R&D Admin Total Period Net Margin $983 $0 $973 $973 $1,000 $1,000 $1,900 $2,200 $995 $900 $900 $0 $0 $7,900 4.5% $539 $376 $0 $0 $2,870 1.6% $7,057 $7,165 $7,132 $7,064 $6,209 $4,992 $0 $0 $39,618 22.4% $801 $4,651 $5,186 $5,362 $3,950 $3,691 $0 $0 $23,641 13.4% $254 $579 $632 $490 Definitions: Sales: Unit sales times list price. Direct Labor: Labor costs incurred to produce the product that was sold. Inventory Carry Cost: the cost to carry unsold goods in inventory. Depreciation: Calculated on straight-line 15-year depreciation of plant value. R&D Costs: R&D department expenditures for each product. Admin: Administration overhead is estimated at 1.5% of sales. Promotions: The promotion budget for each product. Sales: The sales force budget for each product. Other: Charges not included in other categories such as Fees, Write Offs, and TQM. The fees include money paid to investment bankers and brokerage firms to issue new stocks or bonds plus consulting fees your instructor might assess. Write-offs include the loss you might experience when you sell capacity or liquidate inventory as the result of eliminating a production line. If the amount appears as a negative amount, then you actually made money on the liquidation of capacity or inventory. EBIT: Earnings Before Interest and Taxes. Short Term Interest: Interest expense based on last year's current debt, including short term debt, long term notes that have become due, and emergency loans. Long Term Interest: Interest paid on outstanding bonds. Taxes: Income tax based upon a 35% tax rate. Profit Sharing: Profits shared with employees under the labor contract. Net Profit: EBIT minus interest, taxes, and profit sharing. Other $8,096 4.6% EBIT $15,545 8.8% Short Term Interest $3,473 2.0% LongTerm Interest $13,320 7.5% Taxes Profit Sharing Net Profit ($437) -0.2% $0 0.0% ($811) -0.5% Annual Report Page 2 PRINT Annual Report Top Annual Report Digby C53395 Balance Sheet DEFINITIONS: Common Size: The common size column simply represents each item as a percentage of total assets for that year. Cash: Your end-of-year cash position. Accounts Receivable: Reflects the lag between delivery and payment of your products. Inventories: The current value of your inventory across all products. A zero indicates your company stocked out. Unmet demand would, of course, fall to your competitors. Plant & Equipment: The current value of your plant. Accum Deprec: The total accumulated depreciation from your plant. Accts Payable: What the company currently owes suppliers for materials and services. Current Debt: The debt the company is obligated to pay during the next year of operations. It includes emergency loans used to keep your company solvent should you run out of cash during the year. Long Term Debt: The company's long term debt is in the form of bonds, and this represents the total value of your bonds. Common Stock: The amount of capital invested by shareholders in the company. Round: 3 Dec. 31, 2015 Retained Earnings: The profits that the company chose to keep instead of paying to shareholders as dividends. ASSETS 2015 2014 Common Size Cash $21,134 12.2% $46,015 Accounts Receivable $17,284 10.0% $15,439 Inventory $31,072 18.0% $9,674 40.2% $71,128 Total Current Assets $69,490 Plant & Equipment $160,400 92.9% $118,100 Accumulated Depreciation ($57,220) -33.1% ($46,527) Total Fixed Assets $103,180 59.8% $71,573 Total Assets $172,670 100.0% $142,701 LIABILITIES & OWNERS' EQUITY Accounts Payable $12,333 7.1% $10,582 Current Debt $23,512 13.6% $30,480 Long Term Debt $39,462 22.9% $27,187 43.6% $68,249 4.5% $7,934 Total Liabilities Common Stock $75,307 $7,686 Retained Earnings $89,677 56.4% $74,453 $172,670 Total Liab. & O. Equity $66,519 $97,363 Total Equity 51.9% 100.0% $142,701 Cash Flow Statement The Cash Flow Statement examines what happened in the Cash Account during the year. Cash injections appear as positive numbers and cash withdrawals as negative numbers. The Cash Flow Statement is an excellent tool for diagnosing emergency loans. When negative cash flows exceed positives, you are forced to seek emergency funding. For example, if sales are bad and you find yourself carrying an abundance of excess inventory, the report would show the increase in inventory as a huge negative cash flow. Too much unexpected inventory could outstrip your inflows, exhaust your starting cash and force you to beg for money to keep your company afloat. Cash Flows from Operating Activities: 2015 2014 Net Income (Loss) $25,238 $19,820 Depreciation $10,693 $7,873 Extraordinary gains/losses/writeoffs Accounts Payable Inventory $0 $0 $1,751 $3,370 ($21,398) ($6,964) Accounts Receivable ($1,845) ($3,039) Net cash from operations $14,440 $21,061 Cash Flows from Investing Activities: ($42,300) ($24,700 ) Dividends Paid $0 $0 Sales of Common Stock $0 $0 Plant Improvements Cash Flows from Financing Activities: Purchase of Common Stock ($2,328) ($1,055) Cash from long term debt $12,276 $15,698 Retirement of long term debt Change in current debt (net) Net cash from financing activities Net change in cash position Closing cash position $0 ($10,300 ) ($6,969) $16,462 $2,979 $20,805 ($24,881) $17,166 $21,134 $46,015 Annual Report Page 1 Top Annual Report Digby C53395 Round: 3 Dec. 31, 2015 2015 Income Statement (Product Name:) Dell Dixie 2015 Common Total Size Dot Na Na Na Na $57,231 $45,656 $51,003 $56,398 $0 $0 $0 $0 $210,288 100.0% Direct Labor $13,312 $9,625 $10,817 $11,804 $0 $0 $0 $0 $45,558 21.7% Direct Material $0 $0 $0 $0 $83,100 39.5% $674 $1,518 $1,537 $0 $0 $0 $0 $3,729 1.8% $35,216 $29,842 $31,737 $35,591 $0 $0 $0 $0 $132,386 63.0% Contribution $22,015 $15,814 $19,266 $20,807 Margin $0 $0 $0 $0 $77,902 37.0% $0 $0 $0 $0 $10,693 5.1% $571 $0 $0 $0 $0 $2,595 1.2% Promotions $1,350 $1,350 $1,350 $1,350 $0 $0 $0 $0 $5,400 2.6% Sales Sales Daze Variable Costs: Inventory Carry Total Variable $21,905 $19,543 $19,402 $22,251 $0 Period Costs: Depreciation SG&A: R&D $2,760 $1,927 $2,947 $3,060 $858 $655 $900 $900 $0 $0 $0 $0 $3,800 1.8% $380 $420 $0 $0 $0 $0 $1,567 0.7% Total Period $6,395 $5,272 $6,087 $6,301 $0 $0 $0 $0 $24,055 11.4% Net Margin $15,620 $10,541 $13,179 $14,506 $0 $0 $0 $0 $53,847 25.6% Admin $1,000 $1,000 $510 $427 $340 Definitions: Sales: Unit sales times list price. Direct Labor: Labor costs incurred to produce the product that was sold. Inventory Carry Cost: the cost to carry unsold goods in inventory. Depreciation: Calculated on straight-line 15-year depreciation of plant value. R&D Costs: R&D department expenditures for each product. Admin: Administration overhead is estimated at 1.5% of sales. Promotions: The promotion budget for each product. Sales: The sales force budget for each product. Other: Charges not included in other categories such as Fees, Write Offs, and TQM. The fees include money paid to investment bankers and brokerage firms to issue new stocks or bonds plus consulting fees your instructor might assess. Write-offs include the loss you might experience when you sell capacity or liquidate inventory as the result of eliminating a production line. If the amount appears as a negative amount, then you actually made money on the liquidation of capacity or inventory. EBIT: Earnings Before Interest and Taxes. Short Term Interest: Interest expense based on last year's current debt, including short term debt, long term notes that have become due, and emergency loans. Long Term Interest: Interest paid on outstanding bonds. Taxes: Income tax based upon a 35% tax rate. Profit Sharing: Profits shared with employees under the labor contract. Net Profit: EBIT minus interest, taxes, and profit sharing. Other $6,899 3.3% EBIT $46,948 22.3% Short Term Interest $2,610 1.2% LongTerm Interest $4,718 2.2% Taxes Profit Sharing Net Profit $13,867 6.6% $515 0.2% $25,238 12.0% Annual Report Page 2