Revenues Chocalate Express Inc. Income Statement Month ended June 30, 20x1 Sales Cost of Goods Sold Merchandise Inventory, Beginning Add Purchases Less Purchase Discount Net Purchases Cost of Merchandise available for sale Less Merchandise Inventory, Ending Cost of Goods Sold 6,94,210 46,900 5,39,540 -9,910 5,29,630 5,76,530 -52.150 5,24,380 1,69,830 Gross Profit Operating Expense Selling Expense Sales Salaries Expense 55,670 Miscellaneous Selling Expense 710 Advertising Expense 13,960 Total Selling Expense 70,340 Administrative Expense Rent Expense 9,080 Insurance Expense 780 Depreciation Expense- Office Equip. 1,235 Miscellaneous Office Expense 1,530 Office Salaries Expense 23,380 Administrative Expense 36,005 Total Operating Expenses 1,06,345 Opertaing Income 63,485 Other Income Miscellaneous Interest Revenue 3,600 Other Expense Miscellaneous Interest Expense -1,710 1,890 Net Income 65,375 Chocalate Express Inc. Balance Sheet AS At June 30, 20x1 Assets Current Assets Cash Accounts Receivable, Net Prepaid Insurance Merchandise Inventory 34,460 22,800 2.870 52,150 Total Current Assets 1,12,280 Propery and Equipment Office Equipment 39,970 Less Accumulated Depreciation 5.335 34,635 Total Propery and Equipment 34,635 Total Assets 1,46,915 Current Liabilities Accounts Payable Salaries Payable Unearned Revenue Total Liabilities Stockholder's Equity Owners Equity Liabilities and Stockholder's Equity 24,680 1,620 1,350 27,650 Common Stock 30,000 Retained Earnings 89,265 Stockholders Equity Total Liabilities & Stockholder's Equity 1,19,265 1,46,915 B6 A 1 234 4 Michelle Arias Ref D B C Chocolate Express, Inc. Comparison of Key Figures to Prior Month July 31, 200X % Favorable Favorable 5 JULY JUNE (Unfavorable) (Unfavorable) 6 Sales Ref Ref #VALUE! #VALUE! 7 Cost of Merchandise Sold Ref Ref #VALUE! #VALUE! 8 Gross Profit #VALUE! #VALUE! #VALUE! #VALUE! 9 Gross Profit Margin % P #VALUE! #VALUE! #VALUE! pt. 10 11 Operating Expenses 12 Selling Expense Ref Ref #VALUE! #VALUE! 13 Administrative Expense Ref Ref #VALUE! #VALUE! 14 Total Operating Expenses $ $ #VALUE! #VALUE! 15 16 Operating Income #VALUE! #VALUE! #VALUE! #VALUE! 17 Operating Income % #VALUE! #VALUE! #VALUE! pt. 18 19 Other Income (Expense) Ref Ref #VALUE! #VALUE! 20 21 Net Income #VALUE! #VALUE! #VALUE! #VALUE! 22 Net Income% #VALUE! #VALUE! #VALUE! pt. 23 24 Current Assets Ref Ref #VALUE! 25 Current Liabilities 26 27 Working Capital 28 Current Ratio Ref Ref #VALUE! Use the Text #VALUE! #VALUE! #VALUE! Boxes below, but try not to move #VALUE! #VALUE! #VALUE! 29 30 them as the printed view is a B6 Ref B D E 31 Comparison of JULY Financial Performance to JUNE 32 JULY Net Sales increased by $ 33 $ 34 or a % increase, however Net income declined by %. The increase in sales was largely due to our expansion in the west. 35 The decline in Net Income is largely related to the drop in our Gross Profit Margin and 36 heavy Advertising Cost in the start-up territory. 37 38 Our Gross Profit Margin went from 24.5% to %. Our cost per unit has increased under the new 39 contract as our primary vendor has reduced our purchase discount percentage from "2/10,net 30" 40 to 1/10, net 30". The impact of the change was experienced for the first time in July. We continue 41 our search for another vendor that can provide us with better costs without sacrificing quality. 42 43 Selling Expenses increased by $_ or % compared to JUNE. Advertising Expense 44 and Sales Salaries were planned to increase in our effort to capture market share in the west. We expect this 45 to normalize by the 4th quarter as sales volumes in the west grow. 46 47 Though our Current Ratio was flat with JUNE at our Working Capital increased by $ 48 Even after purchasing new Office Equipment to support the western expansion, our cash balance grew in 49 the month. 50