PLEASE FILL IN ANSWERS IN ALL YELLOW BOXES. TOP INFORMATION IS USED TO ANSWER PROBLEM'S 1,2 & 3.

Common Common Size Size XYZ Plumbing Income Statement 2021E $ Assumptions 2020 - 2021 100.0% Revenue increases by 20% ($ basis) 44.5% $ 2019 10,000,000 4,500,000 5,500,000 Revenue CGS 2020 13,000,000 5,785,000 7,215,000 100.0% 45.0% Gross Profit $ 55.0% $ 55.5% Gross MARGIN increases by 0.5% SG&A R&D Deprec & Amort Total Op. Expense 2,000,000 1,000,000 500,000 3,500,000 20.0% 10.0% 5.0% 2,470,000 1,000,000 500,000 3,970,000 19.0% SG&A improves by 1.5% (% basis) 7.7% R&D increases by 15% ($ basis) 3.8% No change in Deprec & Amort cost 30.5% 35.0% Operating Profit $ 2,000,000 20.0% $ 3,245,000 25.0% Interest cost 805,000 45,000 8.1% 0.5% 875,000 60,000 6.7% Interest costs are given 0.5% Interest income is given 875,000 65,000 Interest income $ 12.4% $ 18.7% Pre-Tax Tax (21%) 1,240,000 260,400 979,600 21.0% 2,430,000 510,300 1,919,700 21.0% See D21 Net Income $ 9.8% $ 14.8% $ 0.10 $ 0.19 EPS - Basic EPS - Diluted Average Shares Outstanding 10,000,000 10,000,000 10,000,000 Diluted Shares XYZ Plumbing Balance Sheet 2019 2020 2019 2020 ASSETS Cash A/R Inventory Pre-paid expenses Total Current Assets 1,500,000 1,000,000 2,000,000 500,000 5,000,000 5,039,700 1,500,000 2,300,000 600,000 9,439,700 LIABILITIES Accounts Payable Notes Payable Current portion of LTD Accrued Liabilities 1,800,000 1,500,000 1,000,000 700,000 2,000,000 1,500,000 1,000,000 1,520,000 6,020,000 Total Current Liabilities 5,000,000 DE 182 Long-Term Debt 9,000,000 10,000,000 Building and Improvements Equipment 15,000,000 5,000,000 20,000,000 15,000,000 5,000,000 20,000,000 Depreciation Net PP&E 500,000 19,500,000 1,000,000 19,000,000 Stockholder's Equity Common Stock at Par Paid in Capital Retained Earnings Total Stockholder's Equity 100,000 9,900,000 500,000 10,500,000 100,000 9,900,000 2,419,700 12,419,700 Total Assets 24,500,000 28,439,700 Total Liabilities + Equity 24,500,000 28,439,700 Diluted Shares Diluted Shares Information Officers and Directors Options Exercise Price 3,000,000 $ 1.00 Publice Warrants Exercise Price 3,000,000 $ 2.50 Stock Price used for calculating Diluted Shares $ 6.00 10,000,000 Diluted Shares Calculation Table Basic Shares O&D warrants Public Total 10,000,000 Proceeds Officers and Directors Public Shareholders Total Proceeds Buyback Price Total Shares repurchased $ 6.00 Diluted Shares PROBLEM SOLVING Problem 1 Do not type in the Blue or Brown boxes problem Do not type in the Blue or Brown boxes below Problem 2 Analysis Statement of Cash Flows Admin Key 2020 2020 Pts Admin Key Pts 1 Net Income 1 1 Current Ratio Quick Ratio Gross Margin Operating Margin Accounts Receivable tumover Inventory turnover Total asset tumover Debt to Equity Retum on Equity 1 2 Adjustments Depreciation and amortization Cash Provided by Operating Assets and Liabilities Accounts Receivable Inventories Pre-paid expenses Accounts payable Accrued liabilities Net Cash provided (used) by operating activities 2 2 2 2 Problem 3 Projections Admin Key 2021E Pts Cash Provided from Investing Activities Additions to property, plant and equipment Net Cash provided (used) by investing activities Revenue (Increase of 20% from 2020) CGS Gross Profit (Gross Margin increases by 0.5% from 2020) 1 1 1 1 Cash Provided from Financing Activities Additions to long term borrowing Addition to short term borrowing Net Cash provided (used) by financing activities SG&A (Improves by 1.5% from 2020) R&D (Increases by 15% in total dollars from 2020) Deprec & Amort (no change from 2020) Total Op. Expense 1 1 1 1 2 2 Operating Profit 1 Net Cash Flow Interest cost (given Interest income (given) $ $ 875,000 65,000 875,000 65,000 Total 20 1 Pre-Tax Tax (21% rate) Net Income 1 1 he YELLOW shaded boxes. EPS - Basic EPS - Diluted (See Information show for Equity Structure) 4 me is written in the first YELLOW shaded box in the "2" row