IPG Photonics Corporation CONSOLIDATED BALANCE SHEETS amounts in thousands, except share and per share data "December 31, 2017" "December 31, 2016" Increase (Decrease) ASSETS Amount Percent Amount Percent Amount Percent Current Assets: Cash and cash equivalents $909,900 $623,855 34.9% Short-term investments 206,257 206,779 11.6% Accounts receivable, net 237,278 155,901 8.7% Inventories 307,712 239,010 13.4% Prepaid income taxes 44,944 34,128 1.9% Prepaid expenses and other current assets 47,919 41,289 2.3% Total Current Assets 1,754,010 74.1% 1,300,962 72.7% 453,048 34.8% Long-Term Assets: Deferred income taxes, net 26,976 1.1% 42,442 2.4% (15,466) (36.4%) Goodwill 55,831 2.4% 19,828 1.1% 36,003 181.6% Intangible assets, net 51,223 2.2% 28,789 1.6% 22,434 77.9% Property, plant and equipment, net 460,206 19.4% 379,375 21.2% 80,831 21.3% Other assets 19,009 0.8% 18,603 1.0% 406 2.2% TOTAL ASSETS $2,367,255 100.0% $1,789,999 100.0% $577,256 32.2% LIABILITIES AND STOCKHOLDERS EQUITY Current Liabilities Current portion of long-term debt 3,604 0.2% 3,188 0.2% 416 13.0% Accounts payable 35,109 1.5% 28,048 1.6% 7,061 25.2% Accrued expenses and other liabilities 144,417 6.1% 102,485 5.7% 41,932 40.9% Income taxes payable 15,773 0.7% 24,554 1.4% (8,781) (35.8%) Total Current Liabilities 198,903 8.4% 158,275 8.8% 40,628 25.7% "Deferred income taxes and other Long-Term Liabilities" 100,652 4.3% 36,365 2.0% 64,287 176.8% Long-Term Debt, net of current portion 45,378 1.9% 37,635 2.1% 7,743 20.6% Total Liabilities 344,933 14.6% 232,275 13.0% 112,658 48.5% STOCKHOLDERS EQUITY Common stock, $0.0001 par value; 175,000,000 shares authorized; 54,007,708 shares issued and 53,629,439 shares outstanding at December 31, 2017; 53,354,579 shares issued and 53,251,805 shares outstanding at December 31, 2016 5 0.0% 5 0.0% - 0.0% Additional paid-in capital 704,727 29.8% 650,974 36.4% 53,753 8.3% Retained earnings 1,443,867 61.0% 1,094,108 61.1% 349,759 32.0% Treasury stock, at cost (378,269 shares at 12/31/17 and 102,774 shares at 12/31/2016) (48,933) (2.1%) (8,946) (0.5%) (39,987) 447.0% Accumulated other comprehensive loss (77,344) (3.3%) (178,583) (10.0%) 101,239 (56.7%) Noncontrolling interests - 0.0% 166 0.0% (166) N/A Total Stockholders Equity 2,022,322 85.4% 1,557,724 87.0% 464,598 29.8% TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $2,367,255 100.0% $1,789,999 100.0% $577,256 32.2%

IPG Photonics Corporation
CONSOLIDATED STATEMENTS OF INCOME
amounts in thousands, except per share data
	For the Year Ended					Increase (Decrease)
	December 31, 2017		December 31, 2016
	Amount	Percent	Amount	Percent		Amount	Percent
NET SALES	$1,408,889	100.0%	$ 1,006,173	100.0%		$ 402,716	40.0%
Cost of Sales	611,978	43.4%	453,933	45.1%		158,045	34.8%
GROSS PROFIT	796,911		552,240	54.9%		244,671	44.3%
Operating Expenses:
Sales and marketing	49,801	3.5%	38,393	3.8%		11,408	29.7%
Research and development	100,870	7.2%	78,552	7.8%		22,318	28.4%
General and administrative	80,668	5.7%	66,486	6.6%		14,182	21.3%
Loss (gain) on foreign exchange	14,460	1.0%	4,496	0.4%		9,964	221.6%
Total Operating Expenses	245,799	17.4%	187,927	18.7%		57,872	30.8%
OPERATING INCOME	551,112		364,313	36.2%		186,799	51.3%
OTHER INCOME (EXPENSE), Net:
Interest income (expense), net	737	0.1%	1,304	0.1%		(567)	(43.5%)
Other income (expense), net	22	0.0%	948	0.1%		(926)	(97.7%)
Total Other Income (Expense)	759	0.1%	2,252	0.2%		(1,493)	(66.3%)
INCOME BEFORE PROVISION FOR INCOME TAXES	551,871	39.2%	366,565	36.4%		185,306	50.6%
Provision for Income Taxes	204,283	14.5%	105,849	10.5%		98,434	93.0%
NET INCOME	$ 347,588	24.7%	$ 260,716	25.9%		$ 86,872	33.3%
Weighted Average Common Shares Outstanding	53,495		53,068
BASIC EARNINGS PER SHARE	$6.50		$4.91

SEE THE INSTRUCTIONS IN THE CANVAS MODULE BEFORE BEGINNING THIS ASSIGNMENT.

Use the information you calculated in the yellow cells of the "IPG Photonics Horizontal and Vertical Analysis" file (available in the Canvas module). Remember, there are two sheets (the Balance Sheet and the Income Statement) in that file. Enter the answers below and Check your Work. After getting all correct answers, make any necessary corrections in the Excel file, then use that file to help you complete the Analysis Questions in the Canvas module.

For the vertical analysis answers, write your answers with one decimal place, and do not type the % sign.

For IPG Photonics year ended December 31, 2017:

Cash and cash equivalents as a percent of Total Assets %

Short-term investments as a percent of Total Assets %

Accounts receivable, net as a percent of Total Assets %

Inventories as a percent of Total Assets %

Prepaid income taxes as a percent of Total Assets %

Prepaid expenses and other current assets as a percent of Total Assets %

Gross Profit as a percent of Net Sales %

Operating Income as a percent of Net Sales %

For the horizontal analysis answers, write the dollar amounts with no decimal places.

Include all the zeros in the answers. Remember, the amounts in the financial statements are all in thousands, so the amount of increase or decrease is also in thousands of dollars. Do not type commas in the numbers.

Write the percents with one decimal place. Do not type the percent sign.

For both the dollars and percents, use a minus sign before the number if there is a decrease.

Amount of increase (decrease) in Cash and cash equivalents from Dec. 31, 2016 to Dec. 31, 2017 $

Percent of increase (decrease) in Cash and cash equivalents from Dec. 31, 2016 to Dec. 31, 2017 %

Amount of increase (decrease) in Short-term investment from Dec. 31, 2016 to Dec. 31, 2017 $

Percent of increase (decrease) in Short-term investments from Dec. 31, 2016 to Dec. 31, 2017 %

Amount of increase (decrease) in Accounts receivable, net from Dec. 31, 2016 to Dec. 31, 2017 $

Percent of increase (decrease) in Accounts receivable, net from Dec. 31, 2016 to Dec. 31, 2017 %

Amount of increase (decrease) in Inventories from Dec. 31, 2016 to Dec. 31, 2017 $

Percent of increase (decrease) in Inventories from Dec. 31, 2016 to Dec. 31, 2017 %

Amount of increase (decrease) in Prepaid income taxes from Dec. 31, 2016 to Dec. 31, 2017 $

Percent of increase (decrease) in Prepaid income taxes from Dec. 31, 2016 to Dec. 31, 2017 %

Amount of increase (decrease) in Prepaid expenses and other current assets from Dec. 31, 2016 to Dec. 31, 2017 $

Percent of increase (decrease) in Prepaid expenses and other current assets from Dec. 31, 2016 to Dec. 31, 2017 %