FINANCIAL STATEMENT ANALYSIS Using the financial statements provided on the next two pages, please identify 3 items on the balance sheet and 3 items on the trended income statement that would cause you to ask a question or notify your manager of a finding. Comment below and mark the financial statement with the corresponding letter. Example: prepaid insurance decrease in prepaid due to amortization of policy, should review policy expiration date Balance Sheet: A. ______________________________________________________________________________________ ______________________________________________________________________________________ B. ______________________________________________________________________________________ ______________________________________________________________________________________ C. ______________________________________________________________________________________ ______________________________________________________________________________________ Trended Income Statement: D. ______________________________________________________________________________________ ______________________________________________________________________________________ E. ______________________________________________________________________________________ ______________________________________________________________________________________ F. ______________________________________________________________________________________ ______________________________________________________________________________________ SAMPLE BALANCE SHEET June 2018 July 2018 MoM Variance MoM % Change Comment ASSETS CASH & SHORTTERM INVESTMENTS 175,950 224,678 48,728 28% ACCOUNTS RECEIVABLE ACCOUNTS RECEIVABLE 179,355 150,043 (29,312) 16% RESERVE FOR UNCOLLECTIBLE (12,574) 12,57 4 100% ACCOUNTS RECEIVABLE TOTAL 166,782 150,043 (16,739) PREPAID EXPENSES & DEPOSITS PREPAID INSURANCE 10,184 5,184 (5,000) 49% example PREPAID REAL ESTATE TAXES 50 (12,000) (12,050) 24100% PREPAID EXPENSES & DEPOSITS TOTAL 10,234 (6,816) (17,050) LAND & BLDG LAND 43,317,686 43,317,686 0% LAND IMPROVEMENTS 12,028,632 12,028,632 0% BUILDING 5,067,328 5,067,328 0% BUILDING IMPROVEMENTS 3,646,596 3,946,596 300,000 8% TENANT IMPROVEMENTS 186,675 186,675 0% LAND & BLDG TOTAL 64,246,917 64,546,917 300,000 ACCUMULATED DEPRECIATION ACCUM. DEPR BLDG (1,692,436) (1,702,993) (10,557) 1% ACCUM. DEPR BLDG IMPROVEMENT (3,685,941) (3,738,981) (53,040) 1% ACCUM. DEPR TI (185,008) (185,425) (417) 0% ACCUM. DEPR. LAND IMPROVEMEMT (8,843,034) (8,909,869) (66,835) 1% ACCUMULATED DEPRECIATION TOTAL (14,406,420) (14,537,268) (130,848) LAND & BLDG TOTAL 49,840,497 50,009,649 169,152 LEASING COMMISSIONS 2,122,286 2,191,618 69,332 3% OTHER DEFERRED LEASING COSTS 160,321 161,905 1,58 4 1% AMORTIZATION COMMISSIONS (1,350,552) (1,365,021) (14,469) 1% LEASING COMMISSIONS TOTAL 932,055 988,502 56,447 TOTAL ASSETS 51,125,517 51,366,056 240,538 LIABILITIES A/P AND ACCRUED EXPENSES ACCOUNTS PAYABLE (11,301) (2,407) 8,89 4 -79% ACCRUED A/P OTHER (50,678) (33,739) 16,93 8 -33% ACCRUED REAL ESTATE TAXES (101,250) (131,840) (30,590) 30% ACCRUED EXP INSURANCE 10,000 10,000 #DIV/0! A/P AND ACCRUED EXPENSES TOTAL (163,228) (157,987) 5,242 SECURITY DEP & PREPAID RENTS SECURITY DEPOSITS (281,156) (281,156) 0% PREPAID RENT (13,502) (6,335) 7,168 -53% SECURITY DEP & PREPAID RENTS TOTAL (294,659) (287,491) 7,168 OTHER LIABILITIES DEFERRED REVENUE (12,000) (12,000) #DIV/0! ENVIRONMENTAL RESERVES 0% OTHER LIABILITIES TOTAL (12,000) (12,000) TOTAL LIABILITIES (457,887) (457,478) 409 EQUITY TOTAL EQUITY (50,667,630) (50,908,578) 0% 0 0% TOTAL EQUITY (50,667,630) (50,908,578) 0% (240,948) (240,948)SAMPLE INCOME STATEMENT MoM % Change APR MAY JUN JUL YTD VARIANCE MoM Comment BASE RENT 529,104 525,567 534,664 539,129 3,695,035 4,465 1% BASE RENT TOTAL 529,104 525,567 534,664 539,129 3,695,035 4,465 PERCENTAGE RENT 16,398 16,398 (16,398) 100% RECOVERY OF ELECTRIC/UTILITIES 44,389 36,395 47,670 11,968 248,287 (35,702) 75% RECOVERY OF REAL ESTATE TAXES 27,77 28,299 4 28,325 197,577 28,493 169 1% RECOVERY OF COMMON AREA MAINT. 48,563 47,501 48,577 49,029 338,803 452 1% RECOVERY OF INSURANCE 4,590 4,485 4,573 4,606 31,98 4 33 1% MISC REVENUE 8,064 9,641 7,967 6,324 55,458 (1,643) 21% TOTAL RECOVERIES FROM TENANTS 133,905 125,796 137,111 100,419 872,108 (36,692) GROSS RENTAL REVENUES 663,00 9 651,364 688,173 639,548 4,583,542 (48,625) OPERATING EXPENSES: TENANT ELECTRICITY 16,060 39,810 34,363 26,508 227,641 (7,855) 23% TENANT WATER SEWER (3,295) 5,085 6,095 3,628 27,492 (2,467) 40% ELECTRICITY 671 2,416 129 1,111 9,327 983 762% ADDITIONAL LANDSCAPING 900 900 3,550 900 8,950 (2,650) 75% FIXED CONTRACT SNOW REMOVAL 22,229 22,229 0 0 111,145 0 0% PARKING LOT SWEEPING 2,627 2,627 2,627 2,627 18,390 0 0% PARKING LOT REPAIR AND MAINT. 1,399 1,399 7,051 1,399 15,443 (5,652) 80% ROUTINE ELECTRICAL MAINT. 826 826 826 826 7,799 0 0% LIFE SAFETY TELEPHONE 0 227 200 201 1,447 1 1% ROOF REPAIR AND MAINT 0 384 17,050 0 33,298 (17,050) 100% AWNING CANOPY MAINT 30 30 30 30 211 0 0% EXTERIOR PAINTING 0 0 310 0 310 (310) 100% OTHER BUILDING EXPENSE 3,629 2,446 2,446 5,946 21,808 3,500 143% LOCKS KEYS AND DOORS 0 0 1,070 0 1,070 (1,070) 100% TOTAL OPERATING AND MAINTENANCE 45,076 78,379 75,747 43,176 484,330 (32,571) FIXED EXPENSES INSURANCE 5,388 7,127 6,262 6,262 41,20 4 0% REAL ESTATE TAXES 31,190 30,590 30,590 60,590 224,211 30,000 50% TOTAL FIXED EXPENSES 35,979 38,317 36,852 66,852 265,416 30,000 NON RECOVERABLE EXPENSES BAD DEBT EXPENSE (323) (340) 6,500 (85) 10,841 (6,585) 101% ENVIRONMENTAL EXPENSES 172 172 172 172 1,205 0% TOTAL NON RECOVERABLE EXPENSES (151) (168) 6,672 88 12,04 6 (6,585) TOTAL OPERATING EXPENSES 80,90 4 116,528 119,272 110,116 761,791 (9,156) NET OPERATING INCOME 582,106 534,836 568,901 529,432 3,821,751 (39,470) DEPR. LAND IMPROVEMENTS 66,835 66,835 66,835 66,835 467,84 4 0% DEPR. BUILDING 10,557 10,557 10,557 10,557 73,899 (0) 0% DEPR. BLDG IMPROVEMENTS 53,231 55,677 53,293 53,040 369,879 (253) 0% DEPR. TI 417 417 417 417 3,929 0 0% AMORT. LEASING/ REIT 14,013 14,568 14,398 14,469 104,291 71 0% TOTAL DEPRECIATION & AMORTIZATION 148,053 145,053 145,499 145,317 1,019,841 (182) NET INCOME (LOSS) 434,053 389,783 423,402 384,115 2,801,909 (39,287).