Look at the financial statements excerpted from the Foundation FastTrack and answer the following questions, explaining the reasons and justification for your answers. 1) Look at the income statement survey. Notice that both Baldwin and Ferris have sales revenue worth $46.8 million. However, Baldwin is making losses of $1.3 million while Ferris is making profits over $3 million. a. Why is Baldwin selling well but making losses? (4 points) b. What could Baldwin have done differently to avoid making negative profits? (4 points) 2) Look at the income statement survey. a. Calculate the contribution margin and the net profit margin (return on sales) for Baldwin and Ferris. Compare the two companies and analyze the differences in their financial management based on your calculations. (12 points) b. Calculate SGA as a percentage of sales revenue for both Baldwin and Ferris and analyze the differences in their financial management. (6 points) 3) Why does Digby have the highest sales in the industry but not the highest profits? (4 points) 4) Calculate the ROS for the six companies. Which company is the most profitable? (8 points) 5) Calculate the contribution margins of the 6 companies. Which company has the best contribution margin? Is this good enough? Why or why not? (10 points) 6) Look at the production page of the FastTrack below and explain why the company with the highest contribution margin in question 5 was able to achieve this. (6 points) 7) Calculate the Net Margins for the 6 companies. Which company has the highest Net margin? Is this good enough? Why or why not? (10 points)

Income Statement Survey S34,824 $27,298 $1,320 $6,852 $46,801 $42,517 $1.140 $4,287 34,611 $24,518 $1,128 $7,227 $48,623 $36,813 $1,173 $6,431 347 $3,858 Erie $41,554 31,405 $1.173 S6,225 $46,730 $35,425 Variable Costs(Labor,Material,Carry) SGA(R&D,Promo,Sales Admin) Other(Fees,Writeofs,TQM,Bonuses) Interest Short term,Long term) Taxes Profnt Sharing Net Profit ($646) $641 (S450) $1,366) $641 ($703) $1,687 $641 $2,750 $641 5,604 S641 $1.737 ($836) $1,754 $1,344 FOUNDATIOND FAST TRACK Page 3 Production Analysis Unit Primary Unts Inven & mation Capacity Pfmn Size Material Labor Contr OverNext Next Plant 1,088 4.1 20000 6.4 13.6 $32.00 S14 43 $9.85 22% 26% 900 125% 1,671 9% 950 198% 235 0% 100% 2.3 19000 5.8 14.2 S28.00 $12.83 $11.10 50.00 $0.00 /12/2017 0 0.0 0.0 S0.00 1,018 2.4 17000 29% 0% 24% 24% 17% 0% 75% 50% 940 116% 200 0% 200 0% 6.1 13.8 $34.00 S12.99 $9.61 Casper 810/2017 228/2017 0.0 $0.00 0 0.0 0.0 $0.00 5.8 14.2 $33.00 5.8 142 $33 00 50.00 $0.00 $0.00 $0.00 SI 1 63$10.79 $12 83$10 54 1,473 2.2 15000 800 173% 2.3 19000 800 147% 370 0% 1,259 525/2017 0 0.0 0.0 $0.00 $0.00 $0.00 0% 0% Fast 1,374 2.1 18000 800 161% 300 0% 5.3 14.7 $34.00 24% 63% SI 1 45$1060 0.00 $0.00 5/18/2017 0 0.0 0.0 $0.00 0% 0%