Common Size			Common Size			Common Size
XYZ Plumbing - Income Statement
							Assumptions
		2016			2017			2018E
Revenue		$ 10,000,000	100.0%		$ 12,000,000	100.0%	Revenue increases by 20%	$ 14,400,000	100.0%	XYZ Plumbing - Balance Sheet
CGS		4,000,000	40.0%		4,800,000	40.0%		5,616,000	39.0%		2016	2017			2016	2017
Gross Profit		$ 6,000,000	60.0%		$ 7,200,000	60.0%	Gross MARGIN increases by 1%	$ 8,784,000	61.0%	ASSETS				LIABILITIES
										Cash	1,000,000	2,530,000		Accounts Payable	500,000	1,303,000
SG&A		2,000,000	20.0%		2,400,000	20.0%	SG&A improves by 1.0%	2,736,000	19.0%	A/R	1,000,000	1,500,000		Notes Payable	2,500,000	1,000,000
R&D		1,000,000	10.0%		1,000,000	8.3%	R&D increases by 5%	1,050,000	7.3%	Inventory	2,000,000	2,300,000		Current portion of LTD	1,000,000	1,000,000
Deprec & Amort		500,000	5.0%		500,000	4.2%	No change in Deprec & Amort	500,000	3.5%	Pre-paid expenses	500,000	670,000		Accrued Liabilities	500,000	520,000
Total Op. Expense		3,500,000	35.0%		3,900,000	32.5%		4,286,000	29.8%	Total Current Assets	4,500,000	7,000,000		Total Current Liabilities	4,500,000	3,823,000
Operating Profit		$ 2,500,000	25.0%		$ 3,300,000	27.5%		$ 4,498,000	31.2%	Building and Improvements	15,000,000	15,000,000		Long-Term Debt	9,000,000	12,000,000
									0.0%	Equipment	5,000,000	7,000,000
Interest cost		500,000	5.0%		700,000	5.8%	Interest costs are given	980,000	6.8%		20,000,000	22,000,000		Stockholder's Equity
Interest income		30,000	0.3%		120,000	1.0%	Interest income is given	80,000	0.6%					Common Stock at Par	100,000	100,000
										Depreciation	500,000	1,000,000		Paid in Capital	9,900,000	9,900,000
Pre-Tax		$ 2,030,000	20.3%		$ 2,720,000	22.7%		$ 3,598,000	25.0%	Net PP&E	19,500,000	21,000,000		Retained Earnings	500,000	2,268,000
Tax (35% rate through 2017. 21% in 2018)		710,500	35.0%		952,000	35.0%	See D22	755,580	5.2%					Total Stockholder's Equity	10,500,000	12,268,000
Net Income		$ 1,319,500	13.2%		$ 1,768,000	14.7%		$ 2,842,420	19.7%
										Total Assets	24,000,000	28,000,000		Total Liabilities + Equity	24,000,000	28,091,000
EPS - Basic		$ 0.13			$ 0.18			$ 0.28
EPS - Diluted								$ 0.23
																(91,000)
Average Shares Outstanding		10,000,000			10,000,000			10,000,000
Diluted Shares								12,200,000
	Diluted Shares Information
	Officers and Directors Options	2,000,000
	Exercise Price	$ 3.50
	Publice Warrants	4,000,000
	Exercise Price	$ 3.00
	Stock Price used for calculating Diluted Shares	$ 5.00
	Diluted Shares Calculation Table
	Basic Shares	10,000,000
	O&D warrants	2,000,000
	Public	4,000,000
	Total	16,000,000
	Proceeds
	Officers and Directors	$ 7,000,000.00
	Public Shareholders	$ 12,000,000.00
	Total Proceeds	$ 19,000,000.00
	Buyback
	Price	$ 5.00
	Total Shares repurchased	3,800,000
	Diluted Shares	12,200,000

Answer Sheet

Use the following information about XYZ Plumbing (FY=12/31), a public company with the most recent closing stock price of $5.00, to answer the following three problems:
PROBLEM SOLVING	Problem 1							Problem 2
						Analysis			Admin
Statement of Cash Flows	2017		Admin					2017	Key	Pts
			Key	Pts		Current Ratio				1
Net Income				1		Accounts Receivable turnover				1
						Inventory turnover				1
Adjustments						Revenue to Cash				1
Depreciation and amortization				1		Return on Assets				1
Cash Provided by Operating Assets and Liabilities						Return on Equity				1
Accounts Receivable				2
Inventories				2		Problem 3	Projections		Admin
Pre-paid expenses				2				2018E	Key	Pts
Accounts payable				2		Revenue (Increase of 20% from 2017)				1
Accrued liabilities				2		CGS				1
Net Cash provided (used) by operating activities				2		Gross Profit (Gross Margin increases by 1.0% from 2017)				1
Cash Provided from Investing Activities						SG&A (Improves by 1.0% from 2017)				1
Additions to property, plant and equipment				2		R&D (Increases by 10% in total dollars from 2017)				1
Net Cash provided (used) by investing activities				2		Deprec & Amort (increases by $50,000)				1
						Total Op. Expense				1
Cash Provided from Financing Activities
Additions to long term borrowing				2		Operating Profit				1
Addition to short term borrowing				2
Net Cash provided (used) by financing activities				2		Interest cost (given)		$ 980,000
						Interest income (given)		$ 80,000
Net Cash Flow				2
						Pre-Tax				1
						Tax (21% rate)				1
						Net Income				1
			Total	26
						EPS - Basic				1
						EPS - Diluted				6

mulas Data Review View Help Nitro Pro Tell me what you want to do ol Times New Roman A. A-- 9-2p wrap Text Custom ? e-a-. E --?Merge & Center . $ . % , ?| Conditional Format as Cell Formatting Table Font Alignment Number Styles Use the following information about XYZ Plumbing FY-1231), a public company with the most receat clesing stock price of $5.00, to answer the following three problems: Problem 1 PROBLEM SOLVING Statement of Cash Flows Net Income Problem 2 Analysis 2017 Admin 2017 Ke Pts Current Rani Accounes Receivable turnover Inventory tunover Revenue to Cash Return on Assets Return on Equity 1 Depreciation and amortization Cash Provided by Operating Assets and Liabilities Tota Problem 3 Projeotions Accounts payable Ne Cash provided (used) by oper sing activities Cash Provided from Investing Aotivities Revenue lincrease ol 20k rom 20171 CGS Gross Profit Gross Margin inereases by 1ex n total dullars from 201 ReD (lhereases by C Total Op Expense Operaing Prof Addinions to property, plant and equipmers Net Cash provided (used) by inwesting Cash Provided from Financing Activities Addiiona to long term borowing Addition to short term borrowing Net Cash provided (used) by finanoing # .000 s 80,000 Interest cost seenl hterest income Isiven Pre-Tas Tan 1214 rate) Net Income Total 26 EPS-Basio nformation Sheet mulas Data Review View Help Nitro Pro Tell me what you want to do ol Times New Roman A. A-- 9-2p wrap Text Custom ? e-a-. E --?Merge & Center . $ . % , ?| Conditional Format as Cell Formatting Table Font Alignment Number Styles Use the following information about XYZ Plumbing FY-1231), a public company with the most receat clesing stock price of $5.00, to answer the following three problems: Problem 1 PROBLEM SOLVING Statement of Cash Flows Net Income Problem 2 Analysis 2017 Admin 2017 Ke Pts Current Rani Accounes Receivable turnover Inventory tunover Revenue to Cash Return on Assets Return on Equity 1 Depreciation and amortization Cash Provided by Operating Assets and Liabilities Tota Problem 3 Projeotions Accounts payable Ne Cash provided (used) by oper sing activities Cash Provided from Investing Aotivities Revenue lincrease ol 20k rom 20171 CGS Gross Profit Gross Margin inereases by 1ex n total dullars from 201 ReD (lhereases by C Total Op Expense Operaing Prof Addinions to property, plant and equipmers Net Cash provided (used) by inwesting Cash Provided from Financing Activities Addiiona to long term borowing Addition to short term borrowing Net Cash provided (used) by finanoing # .000 s 80,000 Interest cost seenl hterest income Isiven Pre-Tas Tan 1214 rate) Net Income Total 26 EPS-Basio nformation Sheet