Helping Hand Corporation Income Statements for the Years Ended 12/31/16 and 12/31/17 (In Thousands) 2016 2017 Sales $ 21,152.4 $ 23,366.7 Cost of goods sold 14,383.7 15,562.2 Gross profit 6,768.7 7,804.5 Operating expenses 5,986.2 6,846.5 Depreciation 141.2 145.2 EBIT 641.3 812.9 Interest expense 105.7 107.0 Earnings before taxes 535.6 705.9 Taxes 214.2 282.4 Net income $ 321.3 $ 423.5 Helping Hand Corporation Annual Balance Sheet (In Thousands) 12/31/2016 12/31/2017 Assets Cash $ 519.7 $ 461.4 Accounts receivable 387.9 766.0 Inventories 4,875.7 5,518.5 Total current assets 5,783.3 6,745.9 Gross property, plant & equipment 911.0 1,076.1 Less accumulated depreciation (205.1) (350.3) Net property, plant & equipment 705.9 725.8 Total assets $ 6,489.2 $ 7,471.7 Liabilities & Shareholders Equity Accounts payable $ 743.2 $ 652.7 Accrued expenses 767.6 958.0 Short-term notes payable 307.7 380.1 Total current liabilities 1,818.5 1,990.8 Long-term debt 582.2 561.6 Common stock (par value) 543.0 950.3 Retained earnings 3,545.5 3,969.0 Total liabilities & equity $ 6,489.2 $ 7,471.7

Cash Flow Analysis: Case Study Justin Stafford is a second-generation owner of Helping Hand hardware stores. He is a hands-off owner who prefers to leave the day-to-day operations to his management team. Until recently, he had been pleased with the teams performance. Sales had grown each year, and net income had been strong. But Justin cannot understand why he was asked to make an emergency equity infusion when net income was up 32% over prior year. How can a profitable firm be running short on cash? Helping Hand Cash Flow Analysis for 2017 (In $ Thousands) Operating activities: Net income Add: Depreciation (Increase) decrease in operating assets Change in accounts receivable Change in inventories Increase (decrease) in operating liabilities Change in accounts payable Change in accrued expenses Cash provided by operating activities Investing activities: (Increase) decrease in gross fixed assets Cash provided by investing activities Change in cash (before financing activities)