Hi I need help with # 3 and 4 at the very bottom, the written analysis. I am not sure how to go about doing it and what is needed in a written analysis. Thanks

Belton Printing Company of Baltimore has applied for a loan. Its bank has requested a monthly budgeted Income Statement, Statement of Retained Earnings, Cash Flow, and Balance Sheets for the months starting April 1, 2024 through March 31, 2025. The March 31, 2024, balance sheet follows:

Balance Sheet for Belton Printing Company for March 31, 2024.

Assets.

Account	Amount	Total
Category. Current Assets.
Cash	$51,100
Accounts Receivable	13,600
Merchandise Inventory	12,000
Total Current Assets		$76,700
Category. Property, Plant, and Equipment.
Equipment and Fixtures	81,100
Less. Accumulated Depreciation	12,400	68,700
Total Assets		$145,400

Liabilities.

Account	Amount	Total
Category. Current Liabilities.
Accounts Payable		$8,300

Stockholders' Equity.

Account	Amount	Total
Common Stock, no par	$35,000
Retained Earnings	102,100
Total Stockholders' Equity		137,100
Total Liabilities and Stockholders' Equity		$145,400

1. 1. As Belton Printings controller, you have assembled the following additional information:
   2. a. Monthly dividends of $7,000 will be declared and paid.
   3. b. April 1^st equipment purchased for $17,000 budgeted ($7,000 down payment and the rest on a 2 year 7.5% Note Payable paid monthly starting May 1st Must complete a Loan Amortization schedule to be used in the Income Statement and Balance Sheet. Useful life 5 years, Residual Value $5,000 (Must also set up a Depreciation Schedule for this new l/t asset.)
   4. c. April depreciation expense, $800 for current long-term equipment and fixtures. Use Depreciation Schedule to add the monthly depreciation for new Equipment purchased in April.
   5. d. Cost of goods sold, 55% of sales.
   6. e. Desired ending inventory each month starting April is $24,800(base amount) + 10% of next months Cost of Goods Sold..
   7. f. Exempt from Overtime Salaried selling and administrative expenses includes salaries of $29,000, 20% of which will be paid in cash and the remainder paid next month.
   8. g. Additional monthly selling and administrative expenses also include miscellaneous expenses of 10% of sales, all paid in the month incurred.
   9. h. April budgeted sales, $86,000. May Sales inc. 5% of April Sales, June Sales increase by 5% of previous month, July & August 0% increase ( same as June Sales), September decrease of 10% sales from previous month, October decrease of 5% sales from previous month, November 0% inc(dec) (same as October), December increase is 15% from Previous Month, January decrease in sales of 5% from previous month, February sales 0% increase (same as January), and March increase is 5% from previous month. 80% collected in current month and 20% in month following.
   10. i. April cash payments of March 31 liabilities incurred for March purchases of inventory, $8,300.
   11. j. Calculate purchases of inventory based on ending inventory of 20% of next months Cost of Goods Sold and use $25,000 for March 2025 ending inventory.
   12. INCOME TAX RATE = 21% based on the corporate tax rate voted in by Congress in 2017. This rate also appears, already, in your Income Tax Budget Sheet.

Requirements using the Master Merchandising Budget (COGS based as a % of Sales ONLY) located in your Group Budget Comprehensive Problem Canvas Module which you will find directly after the Week 5 Module 5 Folder.

Prepare a Breakeven Analysis for the Year (using 12 month revenue and expense totals. To calculate for the Variable Cost (VC) $ Per, use the High/Low Method. Once you have the VC $ per then you can calculate the Contribution Margin (CM) $ per. To calculate total FC start by taking the high month units and multiply by VC Per to get total VC $ for that month. Once you have calculated the total VC for that high month then calculate the monthly Fixed Costs by taking total costs for the high month and subtract the VC for the same month to get monthly Fixed Costs (FC). Take the monthly FC and multiply by 12 months to get the total annual FC. In Addition, complete a Margin of Safety and Calculate the Operating Leverage for the year. Once you have calculated the Operating Leverage calculate use that to calculate the new Operating Income (OI) if sales were to increase by 15%. SHOW PROOF OF ALL THE ABOVE CALCULATIONS BY SETTING UP A VARIABLE/CONTRIBUTION MARGIN INCOME STATEMENT FOR BREAK EVEN AND FOR THE NEW OPERATING INCOME STEMMING FROM A 15% INCREASE IN SALES (assumption is no revenue or expense value will be changing and you will be staying within the relevant range.)

2. Prepare GAAP Ratios for each month with Industry Averages for comparison (See #3 below).

3. In Word write up a full comparison analysis and conclusion of the company compared with the Industry Average results and state whether you feel the company is on solid ground or not and state your reasons. To help with this Industry research use primary research by talking to a Loan Officer at a local Commercial Bank or Credit Union. He/She should be able to get regional industry ratios for your type of industry with similar sales and/or total assets. A good way to commence your secondary research would be to go to www.finance.yahoo.com and check out the following publically traded printing company:

Discount is a NASDAQ Traded Stock with a Ticker of CMPR was started in Ireland but is now an international co. You will be able to find a profile, analysis, financials, historical data, etc. Read through this to get an idea about the industry. Also, do a brower search to find more information about the industry trends and possibly the % of the total market who use these types of services. A search to start with could be: Trend of the commercial printing industry.

By starting with this you will find yourself directed to other areas. With this information you will be able to come up with a mid-range growth plan and finding out another printing/communication segment you will want to add to the companys menu of items to sell and why from now up to the next 5 years. You will want to show what additional market and demographics to target. You can go to the U.S. Census and check out the area you will want to sell to and how many people live in the area that meet this market and demographics. Once you know this you can calculate the maximum number who would want the services from your previous trends research. In addition, you will want to investigate how many printing companies in the area and online sell your same services. From this you can come up with your best guestimate of the small % you think you will be able to sell to in the next 5years. This will help you state how you see your company growing in the next 5 years.

4. In Word write up a full comparison analysis conclusion of the company compared with the Industry Average results and state whether you feel the company is on solid ground or not to move forward and state your reasons.