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Your Competitive Intelligence team reports that a wave of product liability lawsuits is likely to cause Chester to pull the product Cake entirely off the market this year. Assume Chester scraps all capacity and inventory this round, completely writing off those assets and escrowing the proceeds to a settlement fund, and assume these lawsuits will have no effect on any other products of Chester or other companies. Without Chester's product Cake how much can the industry currently produce in the Core segment? Consider only products primarily in the Core segment last year. Ignore current inventories. Figures in thousands (000). Select: 1 8,652 4,530 9,060 8,725 3,980 9,702 7,675 In the month of March the Chester Corporation received and delivered orders of 176,000 units at a price of $15.00 for revenue of $2.640mil for their product Coat. Chester uses the accrual method of accounting and offers 30 day credit terms. By the end of May Chester had collected payments of $2.640mil for the March deliveries. How much of the collected $2.640mil should Chester show on the March 31st income statement and how much on the May 31st income statement? Select: 1 $2.640mil in March; $0 in May $1.320mil in March; $1.320mil in May $0.871mil in March; $1.769mil in May $0 in March; $2.640mil in May Chester Corp. is downsizing the size of their workforce by 10% (to the nearest person) next year from various strategic initiatives. How much will the company pay in separation costs if each worker receives $5,000 when separated? Select: 1 $636,000 $1,590,000 $70,000 $175,000 Currently Baldwin is paying a dividend of $14.91 (per share). If this dividend stayed the same, but the stock price rose by 10% what would be the dividend yield?Select: 1 13.13% 7.62% 9.90% 6.09% Assume Baldwin is producing 1,080 units of Buddy next year. What would Buddy's plant utilization be? Select: 1 137.70% 132.30% 135.00% 198.03% Chester's balance sheet has $85,945,000 in equity. Further, the company is expecting net income of 4,000,000 next year, and also expecting to pay $5,000,000 in dividends. If there is no new stock issued what will be Chester's book value? Select: 1 $84,945,000 $36,092,000 $94,945,000 $46,092,000 Top " Round: 4 Dec. 31, 2018 Andrews Jiashi Xu Student: Jiashi Xu Baldwin Chester Digby Selected Financial Statistics ROS Asset Turnover ROA Leverage (Assets/Equity) ROE Emergency Loan Sales EBIT Profits Cumulative Profit SG&A / Sales Contrib. Margin % COMP-XM INQUIRER Top Andrews 5.9% 0.77 4.5% 1.7 7.8% $0 $159,022,338 $22,800,653 $9,367,473 $32,740,585 14.7% 34.5% Baldwin 17.8% 1.46 26.0% 1.6 42.8% $0 $260,651,225 $79,542,535 $46,450,115 $101,762,569 5.6% 42.5% Chester 7.9% 0.82 6.5% 2.4 15.3% $0 $166,857,851 $34,786,037 $13,177,038 $16,842,969 9.3% 42.7% Digby 6.1% 0.82 4.9% 2.2 10.8% $0 $200,121,052 $34,802,506 $12,127,290 $17,350,588 10.9% 39.9% Page 1 Round: 4 Stocks & Bonds December 31 , 2018 Stock Market Summary Company Andrews Baldwin Chester Digby Close Change Shares $80.36 $177.92 $42.94 $46.73 $7.48 $65.99 $19.12 $15.04 2,235,089 1,848,595 3,348,940 3,248,452 MarketCap Book Value ($M) $180 $53.47 $329 $58.66 $144 $25.66 $152 $34.58 EPS Dividend Yield P/E $4.19 $25.13 $3.93 $3.73 $0.00 $14.91 $2.90 $0.00 0.0% 8.4% 6.8% 0.0% 19.2 7.1 10.9 12.5 Bond Market Summary Company Series# Face Yield Close$ S&P 11.2S2021 11.9S2022 10.2S2026 $8,837,000 $7,072,000 $20,859,000 11.5% 12.1% 11.4% 97.14 98.49 89.22 BB BB BB 11.2S2024 11.5S2025 11.8S2026 12.4S2027 $4,039,063 $1,278,536 $16,887,096 $10,396,805 11.6% 11.8% 12.0% 12.2% 96.31 97.27 98.52 101.59 BBB BBB BBB BBB 12.5S2022 12.5S2023 12.5S2024 12.9S2025 13.4S2026 14.2S2027 $12,747,297 $7,987,653 $9,474,381 $14,417,355 $34,603,544 $1,622,567 13.1% 13.2% 13.3% 13.6% 13.8% 14.1% 95.35 94.52 93.80 94.87 96.76 100.49 CC CC CC CC CC CC 11.9S2024 12.5S2025 13.1S2026 13.8S2027 $14,265,480 $17,785,485 $34,499,445 $23,090,379 12.8% 13.2% 13.5% 13.7% 92.94 94.81 97.19 100.50 CCC CCC CCC CCC Andrews Baldwin Chester Digby Next Year's Prime Rate 9.00% COMP-XM INQUIRER Page 2 Top Financial Summary Cash Flow Statement Survey Round: 4 December 31, 2018 Andrews Baldwin Chester Digby $9,367 $46,450 $13,177 $12,127 $6,455 $0 $10,391 ($154) $16,253 ($848) $17,889 ($1,001) ($626) ($29,641) $718 ($13,727) ($621) $7,238 ($4,057) $59,248 $17 ($156) ($929) $27,514 ($69) $1,486 ($1,595) $28,838 $0 $0 $0 $0 $0 $0 $0 ($27,553) $0 ($4,725) ($9,710) $0 $0 $0 $3,108 $0 Cash flows from operating activities Net Income (Loss) Adjustment for non-cash items: Depreciation Extraordinary gains/losses/writeoffs Changes in current assets and liabilities: Accounts payable Inventory Accounts receivable Net cash from operations Cash flows from investing activities Plant improvements (net) Cash flows from financing activities Dividends paid Sales of common stock Purchase of common stock Cash from long term debt issued Early retirement of long term debt Retirement of current debt Cash from current debt borrowing Cash from emergency loan $0 $0 ($42,738) $37,946 $0 $0 ($4,019) ($23,256) $25,860 $0 $0 ($11,488) ($25,947) $29,005 $0 $0 ($14,788) ($24,891) $33,640 $0 Net cash from financing activities ($4,792) ($33,694) ($18,139) ($2,932) Net change in cash position ($18,519) $25,554 $9,375 $25,906 Balance Sheet Survey Cash Accounts Receivable Inventory Total Current Assets Andrews $74,920 $21,784 $82,799 $179,503 Baldwin $51,034 $21,423 $19,987 $92,444 Chester $50,799 $13,714 $6,250 $70,763 Digby $52,900 $16,448 $13,673 $83,022 Plant and equipment Accumulated Depreciation Total Fixed Assets $96,824 ($70,229) $26,595 $155,860 ($69,879) $85,981 $243,800 ($110,956) $132,844 $268,340 ($106,105) $162,235 Total Assets $206,098 $178,426 $203,608 $245,257 Accounts Payable Current Debt Long Term Debt Total Liabilities $11,878 $37,946 $36,768 $86,592 $11,518 $25,860 $32,602 $69,979 $7,805 $29,005 $80,853 $117,663 $9,632 $33,640 $89,641 $132,913 Common Stock Retained Earnings Total Equity $27,834 $91,672 $119,506 $10,144 $98,302 $108,446 $48,854 $37,092 $85,945 $56,079 $56,265 $112,344 Total Liabilities & Owners' Equity $206,098 $178,426 $203,608 $245,257 Income Statement Survey Sales Variable Costs (Labor, Material, Carry) Depreciation SGA (R&D, Promo, Sales, Admin) Other (Fees, Writeoffs, TQM, Bonuses) EBIT Interest (Short term, Long term) Taxes Profit Sharing Net Profit Andrews $159,022 $104,167 $6,455 $23,400 $2,200 $22,801 $8,095 $5,147 $191 $9,367 Baldwin $260,651 $149,774 $10,391 $14,716 $6,228 $79,543 $6,622 $25,522 $948 $46,450 Chester $166,858 $95,550 $16,253 $15,445 $4,824 $34,786 $14,100 $7,240 $269 $13,177 Digby $200,121 $120,317 $17,889 $21,735 $5,377 $34,803 $15,764 $6,663 $247 $12,127 COMP-XM INQUIRER Page 3 Top Production Analysis Round: 4 December 31, 2018 Production Information Name Primary Segme nt Unit Inven Revisio Age tory n Date Dec.31 Units Sold Abby Nano 1,165 Alan Elite 1,227 Aft Thrift 707 Agape Core 1,673 Bold Nano 2,150 Buddy Elite 1,842 Bat Nano 1,594 Beetle Elite 1,782 Coat Thrift 2,113 Cure Thrift 2,137 Cake Core 2,182 Cent Core 2,116 Dot Thrift 1,438 152 Dune Thrift 1,645 265 Dart Nano 1,552 210 Deft Elite 1,129 261 Dim Core 1,653 117 Don Core 1,868 14 6/21/20 18 6/21/20 151 18 6/2/201 4,804 8 7/7/201 0 8 427 9/13/20 18 8/21/20 46 18 8/13/20 387 18 8/21/20 440 18 127 6/10/20 18 6/10/20 164 18 12/14/2 11 018 12/14/2 241 018 162 12/20/2 017 12/7/20 15 12/21/2 018 12/21/2 018 12/14/2 018 12/14/2 018 Size Coord MTBF Pfmn Coord 1.5 24000 12.1 5.0 $42.00 $12.25 $10.81 43% 97% 4.0 728 194% 1.5 26000 15.0 7.9 $42.00 $12.78 $10.80 43% 96% 4.0 714 193% 2.2 20000 7.2 12.8 $26.00 $6.85 $7.70 -1% 95% 6.0 1,130 192% 1.6 20000 10.2 9.8 $24.00 $8.86 $8.56 30% 42% 5.0 1,200 139% 1.3 23000 13.5 4.0 $34.00 $13.04 $6.63 42% 100% 7.0 1,150 198% 1.6 25000 16.6 6.5 $34.00 $13.82 $6.63 39% 100% 7.0 800 198% 1.4 23000 13.9 3.7 $37.00 $13.28 $5.99 45% 33% 7.0 1,200 132% 1.3 25000 16.4 6.2 $37.00 $13.83 $5.95 43% 31% 7.0 1,300 129% 2.6 17000 8.0 12.0 $15.00 $6.69 $1.44 45% 34% 10.0 1,600 133% 2.6 17000 8.2 11.8 $15.00 $6.82 $1.38 44% 19% 10.0 1,800 118% 1.6 18000 10.7 8.6 $23.00 $9.03 $4.76 41% 100% 8.0 1,050 198% 1.6 20000 11.4 9.1 $25.00 $9.64 $4.68 43% 84% 8.0 1,250 182% 3.2 14000 7.7 12.3 $15.00 $5.93 $1.30 49% 12% 10.0 1,250 111% 4.1 16000 8.6 11.4 $17.00 $7.14 $1.32 46% 16% 10.0 1,550 115% 1.0 18000 12.8 4.2 $28.00 $11.83 $5.82 36% 58% 7.0 950 156% 1.0 20000 16.2 7.0 $34.00 $12.62 $5.38 45% 22% 7.0 900 121% 1.0 16000 10.6 9.2 $19.00 $8.63 $4.44 31% 68% 8.0 1,040 167% 1.0 16000 10.3 9.6 $20.00 $8.38 $4.52 36% 83% 8.0 1,040 181% Price Material Cost Labor Cost 2nd Auto Shift & mation Capacit Contr. OverNext y Next Marg. time Round Round Plant Utiliz. COMP-XM INQUIRER Page 4 Top Thrift Market Segment Analysis Round: 4 December 31, 2018 Thrift Statistics Total Industry Unit Demand Actual Industry Unit Sales Segment % of Total Industry 7,743 7,743 25.8% Next Year's Segment Growth Rate 11.0% Thrift Customer Buying Criteria Expectations 1. 2. 3. 4. Price Reliability Ideal Position Age $14.00 - 26.00 MTBF 14000-20000 Pfmn 7.7 Size 12.3 Ideal Age = 3.0 Importanc e 55% 20% 15% 10% Perceptual Map for Thrift Segment Top Products in Thrift Segment Market Name Share Coat 26% Cure 26% Dot 18% Dune 14% Aft 9% Don 3% Agape 2% Dim 1% Cake 0% Units Sold to Seg 2,035 2,016 1,393 1,072 707 244 161 112 4 COMP-XM INQUIRER Revision Stock Date Out 6/10/2018 6/10/2018 12/20/2017 12/7/2015 6/2/2018 12/14/2018 7/7/2018 YES 12/14/2018 12/14/2018 Pfmn Coord 8.0 8.2 7.7 8.6 7.2 10.3 10.2 10.6 10.7 Size Coord 12.0 11.8 12.3 11.4 12.8 9.6 9.8 9.2 8.6 List Price $15.00 $15.00 $15.00 $17.00 $26.00 $20.00 $24.00 $19.00 $23.00 MTBF 17000 17000 14000 16000 20000 16000 20000 16000 18000 Age Dec.31 2.65 2.60 3.25 4.11 2.21 0.96 1.57 0.96 1.56 Promo Budget $1,300 $1,300 $1,200 $1,200 $2,000 $1,200 $2,500 $1,200 $1,300 Cust. Awareness 83% 83% 72% 72% 100% 62% 100% 67% 83% Cust. Sales AccessBudget ibility $1,600 83% $1,600 83% $1,000 78% $1,000 78% $3,500 96% $900 78% $3,500 96% $900 78% $1,400 83% Dec. Cust. Survey 69 67 46 36 29 2 7 0 0 Page 5 Top Core Market Segment Analysis Round: 4 December 31, 2018 Core Statistics Total Industry Unit Demand Actual Industry Unit Sales Segment % of Total Industry 9,775 9,775 32.6% Next Year's Segment Growth Rate 10.0% Core Customer Buying Criteria Expectations 1. 2. 3. 4. Price Age Reliability Ideal Position Importanc e 46% 20% 18% 16% $20.00 - 32.00 Ideal Age = 2.0 MTBF 16000-22000 Pfmn 11.0 Size 9.0 Perceptual Map for Core Segment Top Products in Core Segment Market Name Share Cake 22% Cent 22% Don 17% Dim 16% Agape 15% Dune 6% Cure 1% Coat 1% Dot 0% Units Sold to Seg 2,173 2,107 1,624 1,541 1,513 573 121 78 45 COMP-XM INQUIRER Top Revision Stock Date Out 12/14/2018 12/14/2018 12/14/2018 12/14/2018 7/7/2018 YES 12/7/2015 6/10/2018 6/10/2018 12/20/2017 Pfmn Coord 10.7 11.4 10.3 10.6 10.2 8.6 8.2 8.0 7.7 Size Coord 8.6 9.1 9.6 9.2 9.8 11.4 11.8 12.0 12.3 List Price $23.00 $25.00 $20.00 $19.00 $24.00 $17.00 $15.00 $15.00 $15.00 MTBF 18000 20000 16000 16000 20000 16000 17000 17000 14000 Age Dec.31 1.56 1.57 0.96 0.96 1.57 4.11 2.60 2.65 3.25 Promo Budget $1,300 $1,300 $1,200 $1,200 $2,500 $1,200 $1,300 $1,300 $1,200 Cust. Awareness 83% 83% 62% 67% 100% 72% 83% 83% 72% Cust. Sales AccessBudget ibility $1,400 81% $1,400 81% $900 73% $900 73% $3,500 95% $1,000 73% $1,600 81% $1,600 81% $1,000 73% Dec. Cust. Survey 53 52 39 37 68 10 3 2 0 Page 6 Nano Market Segment Analysis Round: 4 December 31, 2018 Nano Statistics Total Industry Unit Demand Actual Industry Unit Sales Segment % of Total Industry 6,162 6,162 20.6% Next Year's Segment Growth Rate 14.0% Nano Customer Buying Criteria Expectations 1. 2. 3. 4. Ideal Position Price Age Reliability Pfmn 12.9 Size 3.9 $28.00 - 40.00 Ideal Age = 1.0 MTBF 18000-24000 Importanc e 35% 27% 20% 18% Perceptual Map for Nano Segment Top Products in Nano Segment Market Name Share Bold 31% Bat 25% Dart 25% Abby 18% Alan 0% Beetle 0% Cake 0% Cent 0% Units Sold to Seg 1,930 1,532 1,532 1,118 23 18 5 3 Revision Stock Date Out 9/13/2018 8/13/2018 12/21/2018 6/21/2018 6/21/2018 8/21/2018 12/14/2018 12/14/2018 Pfmn Size Coord Coord 13.5 4.0 13.9 3.7 12.8 4.2 12.1 5.0 15.0 7.9 16.4 6.2 10.7 8.6 11.4 9.1 List Price $34.00 $37.00 $28.00 $42.00 $42.00 $37.00 $23.00 $25.00 MTBF 23000 23000 18000 24000 26000 25000 18000 20000 Age Dec.31 1.27 1.36 1.02 1.52 1.54 1.35 1.56 1.57 Promo Budget $1,400 $1,400 $1,200 $1,500 $300 $1,400 $1,300 $1,300 Cust. Awareness 92% 92% 73% 100% 48% 91% 83% 83% COMP-XM INQUIRER Cust. Sales AccessBudget ibility $1,100 80% $1,000 80% $2,400 74% $4,000 91% $2,000 91% $1,000 80% $1,400 12% $1,400 12% Dec. Cust. Survey 66 51 56 36 0 0 0 0 Page 7 Top Elite Market Segment Analysis Round: 4 December 31, 2018 Elite Statistics Total Industry Unit Demand Actual Industry Unit Sales Segment % of Total Industry 6,295 6,295 21.0% Next Year's Segment Growth Rate 16.0% Elite Customer Buying Criteria Expectations 1. 2. 3. 4. Age Price Ideal Position Reliability Ideal Age = 0.0 $30.00 - 42.00 Pfmn 16.1 Size 7.1 MTBF 20000-26000 Importanc e 34% 24% 22% 20% Perceptual Map for Elite Segment Top Products in Elite Segment Market Name Share Buddy 29% Beetle 28% Alan 19% Deft 18% Bold 4% Bat 1% Abby 1% Dart 0% Cent 0% Units Sold to Seg 1,842 1,764 1,204 1,129 220 61 46 19 7 Revision Stock Date Out 8/21/2018 8/21/2018 6/21/2018 12/21/2018 9/13/2018 8/13/2018 6/21/2018 12/21/2018 12/14/2018 Pfmn Size Coord Coord 16.6 6.5 16.4 6.2 15.0 7.9 16.2 7.0 13.5 4.0 13.9 3.7 12.1 5.0 12.8 4.2 11.4 9.1 List Price $34.00 $37.00 $42.00 $34.00 $34.00 $37.00 $42.00 $28.00 $25.00 MTBF 25000 25000 26000 20000 23000 23000 24000 18000 20000 Age Dec.31 1.63 1.35 1.54 1.03 1.27 1.36 1.52 1.02 1.57 Promo Budget $1,400 $1,400 $300 $1,200 $1,400 $1,400 $1,500 $1,200 $1,300 Cust. Awareness 92% 91% 48% 72% 92% 92% 100% 73% 83% COMP-XM INQUIRER Cust. Sales AccessBudget ibility $1,000 87% $1,000 87% $2,000 92% $2,400 74% $1,100 87% $1,000 87% $4,000 92% $2,400 74% $1,400 5% Dec. Cust. Survey 54 50 32 37 0 0 0 0 0 Page 8 Top Market Share Report Round: 4 December 31, 2018 Actual Market Share in Units Potential Market Share in Units Thrift Industry Unit Sales % of Market Core Nano Elite Total 7,743 9,775 6,162 6,295 29,974 25.8% 32.6% 20.6% 21.0% 100.0% Abby 18.1% Agape Total Core Nano Elite Total 7,743 9,775 6,162 6,295 29,974 25.8% 32.6% 20.6% 21.0% 100.0% 0.7% 3.9% 0.4% 19.1% 4.1% Abby 18.2% 0.7% 3.9% 2.4% Alan Aft Thrift Units Demanded % of Market Alan 0.4% 19.1% 4.1% 9.1% 2.1% 15.5% 11.2% 15.5% 18.5% 19.9% Bold 31.3% 5.6% 15.9% Aft Agape Total 3.5% 6.2% 5.3% 0.3% 28.0% 6.0% Bat 56.5% 61.8% Total 24.6% 18.5% Buddy 24.9% Beetle 2.3% 22.7% 22.7% Bold 1.0% Buddy Bat 2.8% 11.9% 19.9% 8.1% 18.5% 7.2% 29.3% 9.1% 31.3% 26.3% 0.8% 26.0% 1.2% 7.1% Coat 26.1% 7.3% 7.1% 28.5% 25.8% 1.1% Cake Cent Total 0.1% 52.0% 20.3% 19.7% 41.9% 24.6% 0.7% Cure 5.9% 61.8% 7.0% Cure 5.3% 28.0% 56.5% Coat 6.1% 1.0% 0.3% Total 7.2% 24.9% Beetle 3.5% 29.3% Cake Cent Total 0.1% 22.2% 21.6% 52.4% 45.8% Dot 18.0% 0.5% Dune 13.8% 5.9% 5.5% Dot 17.8% 0.4% 5.2% Dune 13.7% 5.4% 3.8% Dart 5.5% Deft 6.2% 31.0% Dim 1.4% 14.4% Don Total 3.1% 36.1% 15.2% 35.4% 7.0% 4.8% Dart 24.9% Deft Dim Don Total 0.1% 0.1% 0.1% 7.0% 0.1% 0.1% 0.3% 17.9% 1.4% 15.8% 3.1% 16.6% 36.4% 38.7% 24.9% 18.3% 0.1% 0.1% 0.1% 0.1% 6.7% 6.5% 27.1% 4.8% 5.3% 24.9% 5.2% 17.9% COMP-XM INQUIRER 0.3% 3.8% 5.1% 24.9% 18.3% 5.8% 29.8% Page 9 Top Perceptual Map Round: 4 December 31, 2018 Perceptual Map for All Segments Andrews Name Abby Alan Aft Agape Pfmn 12.1 15.0 7.2 10.2 Size 5.0 7.9 12.8 9.8 Baldwin Revised 6/21/2018 6/21/2018 6/2/2018 7/7/2018 Name Bold Buddy Bat Beetle Pfmn 13.5 16.6 13.9 16.4 Size 4.0 6.5 3.7 6.2 Chester Revised 9/13/2018 8/21/2018 8/13/2018 8/21/2018 Name Coat Cure Cake Cent Pfmn 8.0 8.2 10.7 11.4 Size 12.0 11.8 8.6 9.1 Revised 6/10/2018 6/10/2018 12/14/2018 12/14/2018 Digby Name Dot Dune Dart Deft Dim Don Pfmn 7.7 8.6 12.8 16.2 10.6 10.3 Size 12.3 11.4 4.2 7.0 9.2 9.6 Revised 12/20/2017 12/7/2015 12/21/2018 12/21/2018 12/14/2018 12/14/2018 COMP-XM INQUIRER Page 10 Top HR/TQM Report Round: 4 December 31, 2018 HUMAN RESOURCES SUMMARY Andrews Baldwin Chester Digby Needed Complement 819 595 353 488 Complement 819 595 353 488 1st Shift Complement 458 368 208 327 2nd Shift Complement 361 227 145 161 Overtime% 0.0% 0.0% 0.0% 0.0% Turnover Rate 6.7% 10.0% 8.0% 6.0% 74 60 28 29 0 102 56 103 $5,000 $0 $2,500 $5,000 80 0 40 80 113.1% 100.0% 118.5% 129.7% $444 $60 $98 $176 New Employees Separated Employees Recruiting Spend Training Hours Productivity Index Recruiting Cost Separation Cost $0 $510 $280 $516 Training Cost $1,310 $0 $283 $781 Total HR Admin Cost $1,755 $569 $661 $1,474 Wages $31.04 $31.04 $31.04 $31.04 Benefits 2,500 2,500 2,500 2,500 Profit Sharing 2.0% 2.0% 2.0% 2.0% Annual Raise 5.0% 5.0% 5.0% 5.0% Labor Contract Next Year Starting Negotiation Position Wages Benefits Profit Sharing Annual Raise Ceiling Negotiation Position Wages Benefits Profit Sharing Annual Raise Adjusted Labor Demands Wages Benefits Profit Sharing Annual Raise Strike Days TQM SUMMARY Andrews Process Mgt Budgets Last Year CPI Systems Baldwin Chester Digby $0 $0 $1,250 $1,500 $500 $0 $1,250 $1,500 $0 $1,250 $0 $0 $1,000 $1,250 $1,500 $0 Concurrent Engineering $500 $1,250 $0 $0 UNEP Green Programs $0 $0 $0 $1,500 Vendor/JIT Quality Initiative Training Channel Support Systems TQM Budgets Last Year Benchmarking $0 $0 $0 $1,500 Quality Function Deployment Effort $100 $0 $0 $0 CCE/6 Sigma Training $100 $1,250 $750 $0 $0 $1,250 $750 $0 $2,200 $6,250 $5,500 $6,000 GEMI TQEM Sustainability Initiatives Total Expenditures Cumulative Impacts Material Cost Reduction 11.46% 9.48% 10.20% 6.07% Labor Cost Reduction 13.73% 14.00% 4.39% 0.28% Reduction R&D Cycle Time 40.01% 40.01% 0.00% 0.00% Reduction Admin Costs 60.02% 0.00% 34.91% 60.02% Demand Increase 14.40% 12.78% 10.57% 2.35% COMP-XM INQUIRER Page 11 PRINT Annual Report Top Annual Report Andrews Round: 8 Dec. 31, 2018 C59559 Balance Sheet ASSETS DEFINITIONS: Common Size: The common size column simply represents each item as a percentage of total assets for that year. Cash: Your end-of-year cash position. Accounts Cash Receivable: Reflects the lag between delivery Accounts and payment of your products.Inventories: The Receivable current value of your inventory across all Inventory products. A zero indicates your company stocked out. Unmet demand would, of course, fall to your competitors. Plant & Equipment: The current Total Current value of your plant. Accum Deprec: The total Assets accumulated depreciation from your plant. Accts Payable: What the company currently owes Plant & suppliers for materials and services. Current Equipment Accumulated Debt: The debt the company is obligated to pay during the next year of operations. It includes Depreciation emergency loans used to keep your company solvent should you run out of cash during the Total Fixed Assets year. Long Term Debt: The company's long term debt is in the form of bonds, and this represents the total value of your bonds. Common Stock:Total Assets The amount of capital invested by shareholders $74,920 2018 Common Size 36.4% $93,439 $21,784 10.6% $22,502 $82,799 40.2% $53,158 87.1% $169,099 $96,824 47.0% $96,824 ($70,229) -34.1% ($63,774) $26,595 12.9% $33,050 $206,098 100.0% $202,149 $179,503 2017 LIABILITIES & in the company.Retained Earnings: The profits OWNERS' that the company chose to keep instead of EQUITY paying to shareholders as dividends. Accounts Payable Current Debt Long Term Debt $11,878 $37,946 $36,768 5.8% 18.4% 17.8% $12,505 $42,738 $36,768 42.0% $92,011 $27,834 13.5% $27,834 $91,672 44.5% $82,305 Total Liabilities $86,592 Common Stock Retained Earnings Total Equity $119,506 58.0% $110,139 Total Liab. & O. Equity $206,098 100.0% $202,149 Cash Flow Statement Cash Flows from Operating The Cash Flow Statement examines what happened in the Cash Account during the year. Cash injections appear as positive numbers and Activities: cash withdrawals as negative numbers. The Cash Flow Statement is an Net Income (Loss) excellent tool for diagnosing emergency loans. When negative cash flows Depreciation Extraordinary exceed positives, you are forced to seek emergency funding. For example, if sales are bad and you find yourself carrying an abundance of gains/losses/writeoffs Accounts Payable excess inventory, the report would show the increase in inventory as a huge negative cash flow. Too much unexpected inventory could outstrip Inventory your inflows, exhaust your starting cash and force you to beg for money to Accounts Receivable keep your company afloat. Net cash from operations Cash Flows from Investing Activities: Plant Improvements Cash Flows from Financing Activities: Dividends Paid Sales of Common Stock Purchase of Common Stock Cash from long term debt Retirement of long term debt Change in current debt (net) Net cash from financing activities Net change in cash position Closing cash position 2018 2017 $9,367 $6,455 $15,998 $6,455 $0 $0 ($626) ($29,641) $718 $696 ($15,802) ($329) ($13,727) $7,018 $0 $0 $0 $0 $0 $0 $0 ($4,792) $0 $0 $0 $0 $0 $2,747 ($4,792) $2,747 ($18,519) $74,920 $9,765 $93,439 Page 1 Annual Report Top Annual Report Andrews Round: 8 Dec. 31, 2018 C59559 2018 Income Statement (Product Name:) Sales Variable Costs: Direct Labor $0 2018 Total $159,022 Common Size 100.0% $0 $45,562 28.7% Abby Alan Aft Agape Na Na Na Na $48,922 $51,548 $18,390 $40,162 $0 $0 $0 $12,598 $13,256 $5,392 $14,317 $0 $0 $0 Direct Material Inventor y Carry Total Variable Contribu tion Margin Period Costs: Depreci ation SG&A: R&D Prom otions Sales Admi n Total Period Net Margin $14,294 $15,686 $4,822 $13,866 $0 $0 $0 $0 $48,669 30.6% $1,184 $428 $8,324 $0 $0 $0 $0 $0 $9,936 6.2% $28,075 $29,371 $18,538 $28,183 $0 $0 $0 $0 $104,167 65.5% $20,846 $22,177 ($147) $11,980 $0 $0 $0 $0 $54,856 34.5% $1,068 $1,047 $2,260 $2,080 $0 $0 $0 $0 $6,455 4.1% $478 $478 $424 $522 $0 $0 $0 $0 $1,900 1.2% $1,500 $300 $2,000 $2,500 $0 $0 $0 $0 $6,300 4.0% $4,000 $2,000 $3,500 $3,500 $0 $0 $0 $0 $13,000 8.2% $677 $713 $254 $556 $0 $0 $0 $0 $2,200 1.4% $7,722 $4,538 $8,438 $9,157 $0 $0 $0 $0 $29,855 18.8% $13,124 $17,639 ($8,585) $2,822 $0 $0 $0 $0 $25,001 15.7% Definitions: Sales: Unit sales times list price. Direct Labor: Labor costs incurred to produce the Other product that was sold. Inventory Carry Cost: the cost to carry unsold goods in EBIT inventory. Depreciation: Calculated on straight-line 15-year depreciation of plant value. R&D Short Term Interest Costs: R&D department expenditures for each product. Admin: Administration overhead is estimated at 1.5% of sales.Promotions: The promotion budget for each product. Sales: The sales LongTerm Interest Taxes force budget for each product. Other: Charges not included in other categories such as Fees, Write Offs, and TQM. The fees include money paid to investment bankers and brokerage firms to Profit Sharing issue new stocks or bonds plus consulting fees your instructor might assess. Write-offs include the Net Profit loss you might experience when you sell capacity or liquidate inventory as the result of eliminating a production line. If the amount appears as a negative amount, then you actually made money on the liquidation of capacity or inventory. EBIT: Earnings Before Interest and Taxes. Short Term Interest: Interest expense based on last year's current debt, including short term debt, long term notes that have become due, and emergency loans. Long Term Interest: Interest paid on outstanding bonds.Taxes: Income tax based upon a 35% tax rate. Profit Sharing: Profits shared with employees under the labor contract. Net Profit: EBIT minus interest, taxes, and profit sharing. $2,200 $22,801 $4,136 $3,959 $5,147 $191 $9,367 Annual Report 1.4% 14.3% 2.6% 2.5% 3.2% 0.1% 5.9% Page 2 PRINT Annual Report Top Annual Report Baldwin Round: 8 Dec. 31, 2018 C59559 Balance Sheet ASSETS DEFINITIONS: Common Size: The common size column simply represents each item as a percentage of total assets for that year. Cash: Your end-of-year cash position. Accounts Cash Receivable: Reflects the lag between delivery Accounts and payment of your products.Inventories: The Receivable current value of your inventory across all Inventory products. A zero indicates your company stocked $51,034 2018 Common Size 28.6% 2017 $25,480 $21,423 12.0% $17,367 $19,987 11.2% $27,225 out. Unmet demand would, of course, fall to your competitors. Plant & Equipment: The current Total Current value of your plant. Accum Deprec: The total Assets accumulated depreciation from your plant. Accts Payable: What the company currently owes Plant & suppliers for materials and services. Current Equipment Debt: The debt the company is obligated to pay Accumulated during the next year of operations. It includes Depreciation emergency loans used to keep your company solvent should you run out of cash during the Total year. Long Term Debt: The company's long term Fixed Assets debt is in the form of bonds, and this represents the total value of your bonds. Common Stock: Total Assets The amount of capital invested by shareholders in the company.Retained Earnings: The profits that the company chose to keep instead of LIABILITIES & paying to shareholders as dividends. OWNERS' EQUITY Accounts Payable Current Debt Long Term Debt $92,444 51.8% $70,072 $155,860 87.4% $155,860 ($69,879) -39.2% ($59,488) $85,981 48.2% $96,372 $178,426 100.0% $166,444 6.5% 14.5% 18.3% $12,139 $23,256 $36,774 39.2% $72,169 $10,144 5.7% $10,680 $98,302 55.1% $83,595 $11,518 $25,860 $32,602 Total Liabilities Common Stock Retained Earnings $69,980 Total Equity $108,446 60.8% $94,275 Total Liab. & O. Equity $178,426 100.0% $166,444 Cash Flow Statement Cash Flows from Operating The Cash Flow Statement examines what happened in the Cash Account during the year. Cash injections appear as positive numbers and Activities: cash withdrawals as negative numbers. The Cash Flow Statement is an Net Income (Loss) excellent tool for diagnosing emergency loans. When negative cash flows Depreciation Extraordinary exceed positives, you are forced to seek emergency funding. For example, if sales are bad and you find yourself carrying an abundance of gains/losses/writeoffs Accounts Payable excess inventory, the report would show the increase in inventory as a huge negative cash flow. Too much unexpected inventory could outstrip Inventory your inflows, exhaust your starting cash and force you to beg for money to Accounts Receivable keep your company afloat. Net cash from operations Cash Flows from Investing Activities: Plant Improvements Cash Flows from Financing Activities: Dividends Paid Sales of Common Stock Purchase of Common Stock Cash from long term debt Retirement of long term debt Change in current debt (net) Net cash from financing activities Net change in cash position Closing cash position Annual Report 2018 2017 $46,450 $10,391 $26,446 $10,391 ($154) $0 ($621) $7,238 ($4,057) $3,247 ($18,729) ($2,891) $59,248 $18,464 $0 ($38,700) ($27,553) $0 ($4,725) $0 ($4,019) $2,604 ($1,880) $0 ($2,105) $10,397 $0 ($5,294) ($33,694) $1,118 $25,554 $51,034 ($19,118) $25,480 Page 1 Top Annual Report Baldwin Round: 8 Dec. 31, 2018 C59559 2018 Income Statement (Product Name:) Sales Variable Costs: Direct Labor Direct Material Inventor y Carry Total Variable Contribu tion Margin Period Costs: Depreci ation SG&A: R&D Prom otions Sales Admi n Total Period Net Margin $0 2018 Total $260,651 Common Size 100.0% $0 $0 $48,060 18.4% $0 $0 $0 $99,316 38.1% $0 $0 $0 $0 $2,398 0.9% $37,313 $0 $0 $0 $0 $149,774 57.5% $26,649 $28,621 $0 $0 $0 $0 $110,877 42.5% $1,813 $2,720 $2,947 $0 $0 $0 $0 $10,391 4.0% $710 $645 $623 $645 $0 $0 $0 $0 $2,622 1.0% $1,400 $1,400 $1,400 $1,400 $0 $0 $0 $0 $5,600 2.1% $1,100 $1,000 $1,000 $1,000 $0 $0 $0 $0 $4,100 1.6% $671 $575 $542 $606 $0 $0 $0 $0 $2,394 0.9% $6,792 $5,433 $6,285 $6,597 $0 $0 $0 $0 $25,107 9.6% $24,155 $19,226 $20,365 $22,024 $0 $0 $0 $0 $85,770 32.9% Bold Buddy Bat Beetle Na Na Na Na $73,110 $62,639 $58,968 $65,934 $0 $0 $0 $14,250 $12,360 $10,060 $11,390 $0 $0 $27,616 $25,507 $21,344 $24,849 $0 $297 $112 $915 $1,075 $42,163 $37,980 $32,318 $30,947 $24,659 $2,911 Definitions: Sales: Unit sales times list price. Direct Labor: Labor costs incurred to produce the Other product that was sold. Inventory Carry Cost: the cost to carry unsold goods in EBIT inventory. Depreciation: Calculated on straight-line 15-year depreciation of plant value. R&D Short Term Interest Costs: R&D department expenditures for each product. Admin: Administration overhead is estimated at 1.5% of sales.Promotions: The promotion budget for each product. Sales: The sales LongTerm Interest Taxes force budget for each product. Other: Charges not included in other categories such as Fees, Write Offs, and TQM. The fees include money paid to investment bankers and brokerage firms to Profit Sharing issue new stocks or bonds plus consulting fees your instructor might assess. Write-offs include the Net Profit loss you might experience when you sell capacity or liquidate inventory as the result of eliminating a production line. If the amount appears as a negative amount, then you actually made money on the liquidation of capacity or inventory. EBIT: Earnings Before Interest and Taxes. Short Term Interest: Interest expense based on last year's current debt, including short term debt, long term notes that have become due, and emergency loans. Long Term Interest: Interest paid on outstanding bonds.Taxes: Income tax based upon a 35% tax rate. Profit Sharing: Profits shared with employees under the labor contract. Net Profit: EBIT minus interest, taxes, and profit sharing. Annual Report $6,228 $79,543 $2,741 $3,881 $25,522 $948 $46,450 2.4% 30.5% 1.1% 1.5% 9.8% 0.4% 17.8% Page 2 PRINT Annual Report Top Annual Report Chester Round: 8 Dec. 31, 2018 C59559 Balance Sheet ASSETS DEFINITIONS: Common Size: The common size column simply represents each item as a percentage of total assets for that year. Cash: Your end-of-year cash position. Accounts Cash Receivable: Reflects the lag between delivery Accounts and payment of your products.Inventories: The Receivable current value of your inventory across all Inventory products. A zero indicates your company stocked out. Unmet demand would, of course, fall to your competitors. Plant & Equipment: The current Total Current value of your plant. Accum Deprec: The total Assets accumulated depreciation from your plant. Accts Payable: What the company currently owes Plant & suppliers for materials and services. Current Equipment Accumulated Debt: The debt the company is obligated to pay during the next year of operations. It includes Depreciation emergency loans used to keep your company solvent should you run out of cash during the Total Fixed Assets year. Long Term Debt: The company's long term debt is in the form of bonds, and this represents the total value of your bonds. Common Stock:Total Assets The amount of capital invested by shareholders in the company.Retained Earnings: The profits LIABILITIES & that the company chose to keep instead of OWNERS' paying to shareholders as dividends. EQUITY Accounts Payable Current Debt Long Term Debt $50,799 2018 Common Size 24.9% $41,424 $13,714 6.7% $12,785 $6,250 3.1% $6,094 34.8% $60,303 $243,800 119.7% $243,800 ($110,956) -54.5% ($94,702) $132,844 65.2% $149,098 $203,608 100.0% $209,401 3.8% 14.2% 39.7% $7,788 $25,947 $93,189 57.8% $126,924 $48,854 24.0% $48,854 $37,092 18.2% $33,624 $85,946 42.2% $82,478 $203,608 100.0% $209,401 $70,763 $7,805 $29,005 $80,853 Total Liabilities Common Stock Retained Earnings Total Equity Total Liab. & O. Equity $117,663 Cash Flow Statement 2017 Cash Flows from Operating The Cash Flow Statement examines what happened in the Cash Account during the year. Cash injections appear as positive numbers and Activities: cash withdrawals as negative numbers. The Cash Flow Statement is an Net Income (Loss) excellent tool for diagnosing emergency loans. When negative cash flows Depreciation Extraordinary exceed positives, you are forced to seek emergency funding. For example, if sales are bad and you find yourself carrying an abundance of gains/losses/writeoffs Accounts Payable excess inventory, the report would show the increase in inventory as a huge negative cash flow. Too much unexpected inventory could outstrip Inventory your inflows, exhaust your starting cash and force you to beg for money to Accounts Receivable keep your company afloat. Net cash from operations Cash Flows from Investing Activities: Plant Improvements Cash Flows from Financing Activities: Dividends Paid Sales of Common Stock Purchase of Common Stock Cash from long term debt Retirement of long term debt Change in current debt (net) Net cash from financing activities Net change in cash position Closing cash position 2018 2017 $13,177 $16,253 $4,301 $16,253 ($848) $0 $17 ($156) ($929) $613 $2,466 ($1,804) $27,514 $21,829 $0 ($13,600) ($9,710) $0 $0 $0 ($11,488) $3,058 $0 $8,527 $0 $1,623 $0 ($17,588) ($18,139) ($7,438) $9,375 $50,799 $792 $41,424 Page 1 Annual Report Top Annual Report Chester Round: 8 Dec. 31, 2018 C59559 2018 Income Statement (Product Name:) Sales $0 2018 Total $166,858 Common Size 100.0% Coat Cure Cake Cent Na Na Na Na $31,701 $32,059 $50,187 $52,911 $0 $0 $0 Variable Costs: Direct Labor Direct Material Inventor y Carry Total Variable $3,245 $3,194 $10,363 $9,891 $0 $0 $0 $0 $26,694 16.0% $14,000 $14,482 $19,484 $20,139 $0 $0 $0 $0 $68,106 40.8% $158 $163 $18 $411 $0 $0 $0 $0 $750 0.4% $17,404 $17,839 $29,866 $30,441 $0 $0 $0 $0 $95,550 57.3% Contribu tion Margin $14,297 $14,220 $20,321 $22,470 $0 $0 $0 $0 $71,308 42.7% $4,907 $5,520 $2,660 $3,167 $0 $0 $0 $0 $16,253 9.7% $446 $446 $966 $966 $0 $0 $0 $0 $2,824 1.7% $1,300 $1,300 $1,300 $1,300 $0 $0 $0 $0 $5,200 3.1% $1,600 $1,600 $1,400 $1,400 $0 $0 $0 $0 $6,000 3.6% $270 $273 $427 $451 $0 $0 $0 $0 $1,421 0.9% $8,522 $9,139 $6,753 $7,283 $0 $0 $0 $0 $31,698 19.0% Period Costs: Depreci ation SG&A: R&D Prom otions Sales Admi n Total Period Net Margin $5,775 $5,081 $13,568 $15,186 $0 $0 $0 $0 $39,610 Definitions: Sales: Unit sales times list price. Direct Labor: Labor costs incurred to produce the Other product that was sold. Inventory Carry Cost: the cost to carry unsold goods in EBIT inventory. Depreciation: Calculated on straight-line 15-year depreciation of plant value. R&D Short Term Interest Costs: R&D department expenditures for each product. Admin: Administration overhead is estimated at 1.5% of sales.Promotions: The promotion budget for each product. Sales: The sales LongTerm Interest Taxes force budget for each product. Other: Charges not included in other categories such as Fees, Write Offs, and TQM. The fees include money paid to investment bankers and brokerage firms to Profit Sharing issue new stocks or bonds plus consulting fees your instructor might assess. Write-offs include the Net Profit loss you might experience when you sell capacity or liquidate inventory as the result of eliminating a production line. If the amount appears as a negative amount, then you actually made money on the liquidation of capacity or inventory. EBIT: Earnings Before Interest and Taxes. Short Term Interest: Interest expense based on last year's current debt, including short term debt, long term notes that have become due, and emergency loans. Long Term Interest: Interest paid on outstanding bonds.Taxes: Income tax based upon a 35% tax rate. Profit Sharing: Profits shared with employees under the labor contract. Net Profit: EBIT minus interest, taxes, and profit sharing. 23.7% $4,824 $34,786 $3,597 $10,503 $7,240 $269 $13,177 Annual Report 2.9% 20.8% 2.2% 6.3% 4.3% 0.2% 7.9% Page 2 PRINT Annual Report Top Annual Report Digby Round: 8 Dec. 31, 2018 C59559 Balance Sheet ASSETS DEFINITIONS: Common Size: The common size column simply represents each item as a percentage of total assets for that year. Cash: Your end-of-year cash position. Accounts Cash Receivable: Reflects the lag between delivery Accounts and payment of your products.Inventories: The Receivable current value of your inventory across all Inventory products. A zero indicates your company stocked out. Unmet demand would, of course, fall to your competitors. Plant & Equipment: The current Total Current value of your plant. Accum Deprec: The total Assets accumulated depreciation from your plant. Accts Payable: What the company currently owes Plant & suppliers for materials and services. Current Equipment Accumulated Debt: The debt the company is obligated to pay during the next year of operations. It includes Depreciation emergency loans used to keep your company solvent should you run out of cash during the Total Fixed Assets year. Long Term Debt: The company's long term debt is in the form of bonds, and this represents the total value of your bonds. Common Stock:Total Assets The amount of capital invested by shareholders in the company.Retained Earnings: The profits LIABILITIES & that the company chose to keep instead of OWNERS' paying to shareholders as dividends. EQUITY Accounts Payable Current Debt Long Term Debt $52,900 2018 Common Size 21.6% $26,994 $16,448 6.7% $14,853 $13,673 5.6% $15,159 33.9% $57,006 $268,340 109.4% $268,340 ($106,105) -43.3% ($88,216) $162,235 66.1% $180,124 $245,257 100.0% $237,131 3.9% 13.7% 36.5% $9,701 $24,891 $105,430 54.2% $140,022 22.9% $52,971 $83,021 $9,632 $33,640 $89,641 Total Liabilities Common Stock $132,913 $56,079 2017 Retained Earnings $56,265 22.9% $44,138 Total Equity $112,344 45.8% $97,109 Total Liab. & O. Equity $245,257 100.0% $237,131 Cash Flow Statement Cash Flows from Operating The Cash Flow Statement examines what happened in the Cash Account during the year. Cash injections appear as positive numbers and Activities: cash withdrawals as negative numbers. The Cash Flow Statement is an Net Income (Loss) excellent tool for diagnosing emergency loans. When negative cash flows Depreciation Extraordinary exceed positives, you are forced to seek emergency funding. For example, if sales are bad and you find yourself carrying an abundance of gains/losses/writeoffs Accounts Payable excess inventory, the report would show the increase in inventory as a huge negative cash flow. Too much unexpected inventory could outstrip Inventory your inflows, exhaust your starting cash and force you to beg for money to Accounts Receivable keep your company afloat. Net cash from operations Cash Flows from Investing Activities: Plant Improvements Cash Flows from Financing Activities: Dividends Paid Sales of Common Stock Purchase of Common Stock Cash from long term debt Retirement of long term debt Change in current debt (net) Net cash from financing activities Net change in cash position Closing cash position 2018 2017 $12,127 $17,889 $1,496 $17,889 ($1,001) $0 ($69) $1,486 ($1,595) $2,898 ($5,402) ($4,077) $28,838 $12,804 $0 ($50,680) $0 $3,108 $0 $0 ($14,788) $8,748 $0 $17,304 $0 $23,090 $0 ($8,971) ($2,932) $31,423 $25,906 $52,900 ($6,453) $26,994 Page 1 Annual Report Top Annual Report Digby Round: 8 Dec. 31, 2018 C59559 2018 Income Statement (Product Name:) Sales Variable Costs: Direct Labor Direct Material Inventor y Carry Total Variable Contribu tion Margin $0 2018 Total $200,121 Common Size 100.0% $0 $0 $36,016 18.0% $15,307 $0 $0 $82,660 41.3% $181 $21 $0 $0 $1,641 0.8% $21,125 $21,539 $23,770 $0 $0 $120,317 60.1% $17,268 $9,866 $13,584 $0 $0 $79,804 39.9% Dot Dune Dart Deft Dim Don Na Na $21,565 $27,960 $43,444 $38,392 $31,405 $37,354 $0 $1,991 $2,465 $9,358 $6,386 $7,374 $8,442 $8,823 $12,229 $18,147 $14,169 $13,984 $138 $284 $448 $570 $10,952 $14,978 $27,953 $10,613 $12,982 $15,491 Period Costs: Depreci ation SG&A: R&D Prom otions Sales Admi n Total Period Net Margin $3,833 $4,753 $2,153 $2,040 $2,635 $2,475 $0 $0 $17,889 8.9% $0 $0 $985 $985 $966 $966 $0 $0 $3,902 1.9% $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $0 $0 $7,200 3.6% $1,000 $1,000 $2,400 $2,400 $900 $900 $0 $0 $8,600 4.3% $219 $284 $442 $390 $319 $380 $0 $0 $2,034 1.0% $6,252 $7,237 $7,180 $7,015 $6,020 $5,920 $0 $0 $39,625 19.8% $4,360 $5,745 $8,312 $10,253 $3,846 $7,664 $0 $0 $40,179 20.1% Definitions: Sales: Unit sales times list price. Direct Labor: Labor costs incurred to produce the Other product that was sold. Inventory Carry Cost: the cost to carry unsold goods in EBIT inventory. Depreciation: Calculated on straight-line 15-year depreciation of plant value. R&D Short Term Interest Costs: R&D department expenditures for each product. Admin: Administration overhead is estimated at 1.5% of sales.Promotions: The promotion budget for each product. Sales: The sales LongTerm Interest Taxes force budget for each product. Other: Charges not included in other categories such as Fees, Write Offs, and TQM. The fees include money paid to investment bankers and brokerage firms to Profit Sharing issue new stocks or bonds plus consulting fees your instructor might assess. Write-offs include the Net Profit loss you might experience when you sell capacity or liquidate inventory as the result of eliminating a production line. If the amount appears as a negative amount, then you actually made money on the liquidation of capacity or inventory. EBIT: Earnings Before Interest and Taxes. Short Term Interest: Interest expense based on last year's current debt, including short term debt, long term notes that have become due, and emergency loans. Long Term Interest: Interest paid on outstanding bonds.Taxes: Income tax based upon a 35% tax rate. Profit Sharing: Profits shared with employees under the labor contract. Net Profit: EBIT minus interest, taxes, and profit sharing. Annual Report $5,377 $34,803 $4,138 $11,627 $6,663 $247 $12,127 2.7% 17.4% 2.1% 5.8% 3.3% 0.1% 6.1% Page 2