Review the Inquirer to determine Digby's current strategy. How will they seek a competitive advantage? From the following list, select the top five sources of competitive advantage that Digby would be most likely to pursue. Select: 5 Seek high automation levels Seek excellent product designs, high awareness, and high accessibility Seek high plant utilization, even if it risks occasional small stockouts Offer attractive credit terms Seek the lowest price in their target market while maintaining a competitive contribution margin Increase demand through TQM initiatives Accept lower plant utilization and higher capacities to insure sufficient capacity is available to meet demand Reduce cost of goods through TQM initiatives Add additional products Reduce labor costs through training and recruitment Baldwin has a leverage of 1.82 This means that: (Assume leverage is calculated as Assets/Equity) Select: 1 $1.82 of assets is funded with $1.00 of debt and $0.82 of equity. $1.82 of assets is funded with $1.00 of equity and $0.82 of debt. Assets are funded with 82% equity. Assets are funded with 82% debt. Midyear on July 31st, the Chester Corporation's balance sheet reported: Total Assets of $166.380 million Total Common Stock of $5.080 million Cash of $8.040 million Retained Earnings of $36.165 million. What were the Chester Corporation's total liabilities? Select: 1 $133.175 million. $117.095 million. $125.135 million. $130.215 million. The Digby Company has just purchased $40,900,000 of plant and equipment that has an estimated useful life of 15 years. The expected salvage value at the end of 15 years is $4,090,000. What will the book value of this purchase (exclude all other plant and equipment) be after its third year of use? (Use FASB GAAP) Select: 1 $35,446,667 $32,720,000 $33,538,000 $29,448,000 The Digby Company has just purchased $40,900,000 of plant and equipment that has an estimated useful life of 15 years. The expected salvage value at the end of 15 years is $4,090,000. What will the book value of this purchase (exclude all other plant and equipment) be after its third year of use? (Use FASB GAAP) Select: 1 $35,446,667 $32,720,000 $33,538,000 $29,448,000 What is the Quick Ratio of Chester? Select: 1 1.22 4.05 2.66 1.51 Page 1 Front Page Page 2 Stocks & Bonds Page 3 Financial Summary Page 4 Production Analysis Annual Report Andrews Page 5 Thrift Segment Analysis Page 6 Core Segment Analysis Page 7 Nano Segment Analysis Page 8 Elite Segment Analysis Page 9 Market Share Page 10 Perceptual Map Page 11 HR/TQM Report Annual Report Baldwin Annual Report Chester Annual Report Digby PRINT Top " Round: 1 Student: Inho Chang Dec. 31, 2016 Andrews Inho Chang Baldwin Chester Digby Inho Chang Selected Financial Statistics Andrews Baldwin Chester Digby 7.5% 8.0% 3.8% 3.8% 1.10 1.57 0.97 0.81 8.2% 12.6% 3.7% 3.1% 1.5 1.8 2.6 2.4 12.2% 23.0% 9.7% 7.5% $0 $0 $0 $0 Sales $141,702,043 $151,070,569 $160,695,769 $121,076,297 EBIT $20,828,145 $23,117,538 $21,160,618 $16,980,087 Profits $10,573,775 $12,157,337 $6,169,877 $4,631,998 Cumulative Profit $10,573,775 $12,157,337 $6,169,877 $4,631,998 SG&A / Sales 11.9% 8.7% 8.7% 12.7% Contrib. Margin % 35.2% 32.4% 29.7% 35.8% ROS Asset Turnover ROA Leverage (Assets/Equity) ROE Emergency Loan COMP-XM INQUIRER Page 1 Top Round: 1 Stocks & Bonds Inho Chang December 31 , 2016 Stock Market Summary Company Close Change Shares MarketCap ($M) Book Value Andrews $82.46 ($13.05) 2,103,561 $173 $41.24 $5.03 Baldwin $65.22 $9.62 1,882,194 $123 $28.11 Chester $40.03 ($4.57) 2,632,602 $105 Digby $45.96 ($7.16) 2,253,733 $104 Yield P/E $0.00 0.0% 16.4 $6.46 $3.81 5.8% 10.1 $24.23 $2.34 $0.00 0.0% 17.1 $27.55 $2.06 $0.00 0.0% 22.4 Bond Market Summary EPS Dividend Company Series# Face Yield Close$ S&P 13.5S2017 $11,300,000 13.1% 102.81 AA 11.2S2022 $8,837,000 10.8% 103.44 AA 11.9S2023 $7,072,000 11.1% 107.21 AA 10.9S2026 $8,000,000 10.6% 103.02 AA 13.5S2017 $11,300,000 13.3% 101.61 BB 11.1S2024 $2,504,080 11.4% 96.99 BB 11.2S2025 $5,675,277 11.5% 97.31 BB 11.5S2026 $1,307,561 11.6% 98.86 BB 13.5S2017 $11,300,000 13.5% 100.09 CC 11.3S2022 $10,417,600 12.3% 91.70 CC 12.5S2023 $14,665,611 13.0% 96.07 CC 12.5S2024 $7,981,720 13.1% 95.74 CC 12.5S2025 $9,473,587 13.1% 95.45 CC 12.9S2026 $14,407,694 13.3% 97.33 CC 13.5S2017 $11,300,000 13.5% 100.35 CC 11.2S2022 $8,639,846 12.1% 92.43 CC 12.4S2023 $5,828,840 12.8% 96.91 CC 11.9S2025 $15,600,742 12.7% 93.86 CC Andrews Baldwin Chester Digby 12.5S2026 $17,783,553 12.9% 96.76 CC Next Year's Prime Rate 8.50% COMP-XM INQUIRER Page 2 Top Financial Summary Cash Flow Statement Survey Round: 1 December 31, 2016 Inho Chang Andrews Baldwin Chester Digby $10,574 $12,157 $6,170 $4,632 $7,495 $6,264 $11,837 $9,887 $0 $0 $0 $0 ($2,639) $1,765 $1,852 $852 Inventory $5,754 $1,469 $568 ($4,396) Accounts receivable $1,784 ($2,588) ($2,389) ($186) Net cash from operations $22,968 $19,067 $18,038 $10,788 ($15,600) ($9,580) ($34,660) ($40,900) $0 ($7,169) $0 $0 $5,000 $0 $2,946 $4,258 $0 ($1,539) $0 $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 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 $8,000 $1,308 $14,408 $17,784 $0 $0 $0 $0 ($15,717) ($18,432) ($29,239) ($25,489) Cash from current debt borrowing $0 $14,285 $25,203 $21,740 Cash from emergency loan $0 $0 $0 $0 ($2,717) ($11,547) $13,318 $18,293 $4,650 ($2,060) ($3,304) ($11,819) Andrews Baldwin Chester Digby Cash $36,450 $17,683 $28,837 $20,704 Accounts Receivable $11,647 $12,417 $13,208 $9,951 Inventory $20,219 $13,363 $9,877 $10,843 Total Current Assets $68,316 $43,463 $51,923 $41,499 Plant and equipment $112,424 $93,960 $177,560 $165,300 Accumulated Depreciation ($51,904) ($41,287) ($63,102) ($57,176) $60,520 $52,673 $114,458 $108,124 $128,835 $96,136 $166,380 $149,623 $6,878 $8,147 $9,136 $6,648 $0 $14,285 $25,203 $21,740 Long Term Debt $35,209 $20,787 $68,246 $59,153 Total Liabilities $42,087 $43,219 $102,585 $87,541 Early retirement of long term debt Retirement of current debt Net cash from financing activities Net change in cash position Balance Sheet Survey Total Fixed Assets Total Assets Accounts Payable Current Debt Common Stock $17,080 $8,818 $27,630 $18,647 Retained Earnings $69,668 $44,099 $36,165 $43,435 Total Equity $86,748 $52,918 $63,795 $62,082 Total Liabilities & Owners' Equity $128,835 $96,136 $166,380 $149,623 Income Statement Survey Andrews Baldwin Chester Digby Sales $141,702 $151,071 $160,696 $121,076 $91,860 $102,192 $112,903 $77,791 $7,495 $6,264 $11,837 $9,887 $16,869 $13,159 $13,927 $15,317 $4,650 $6,338 $868 $1,102 $20,828 $23,118 $21,161 $16,980 Interest (Short term, Long term) $4,229 $4,032 $11,475 $9,709 Taxes $5,810 $6,680 $3,390 $2,545 $216 $248 $126 $95 $10,574 $12,157 $6,170 $4,632 Variable Costs (Labor, Material, Carry) Depreciation SGA (R&D, Promo, Sales, Admin) Other (Fees, Writeoffs, TQM, Bonuses) EBIT Profit Sharing Net Profit COMP-XM INQUIRER Page 3 Top Production Analysis Inho Chang Round: 1 December 31, 2016 Production Information Unit Primary Inve Age Segmen Units n Revisio Dec. MTB Pfmn Size Name t Sold tory n Date 31 F Coord Coord Auto 2nd matio Shift n Contr & Next Capacit Plan Materia Labor . Over- Roun y Next Uti Price l Cost Cost Marg. time d Round z Abby Nano 983 0 5/15/20 1.4 24000 16 11.1 6.0 $39.00 $14.93 $9.28 36% 0% 4.0 828 99% Alan Elite 920 0 5/29/20 1.3 26000 16 13.1 9.0 $42.00 $14.97 $9.28 40% 0% 4.0 814 98% Aft Thrift 1,083 964 10/1/20 3.2 18000 16 7.1 $7.63 $7.04 26% 15% 6.0 1,330 11 % Agap e Core 7/30/20 1.8 21000 16 10.0 10.9 $31.50 $10.99 $8.71 35% 25% 5.0 1,400 12 % Bold Nano 1,217 0 11/30/2 1.6 23000 016 11.1 7.1 $31.00 $13.95 $9.68 26% 100% 5.0 800 19 % Budd y Elite 975 113 1/4/201 2.9 25000 7 13.2 9.1 $35.00 $14.61 $8.80 32% 36% 5.0 700 13 % Bat Nano 1,059 243 10/16/2 1.1 23000 016 12.6 5.5 $37.00 $15.44 $8.67 34% 29% 5.5 850 12 % 10/16/2 1.1 25000 016 14.6 7.5 $39.00 $16.04 $8.17 37% 11% 5.5 950 10 % Beetle Elite 1,264 272 1,026 205 13.0 $23.00 Coat Thrift 2,317 1 4/11/20 3.8 17000 17 7.4 12.7 $18.00 $7.63 $4.59 31% 100% 8.5 1,050 19 % Cure Thrift 2,485 178 4/11/20 3.6 17000 17 7.6 12.5 $18.00 $7.83 $4.55 30% 92% 8.5 1,250 19 % Cake Core 1,279 207 11/18/2 1.2 18000 016 10.8 8.7 $27.00 $11.55 $7.16 31% 50% 7.8 1,050 14 % Cent Core 1,471 198 11/16/2 1.2 20000 016 11.6 9.3 $27.00 $12.25 $7.37 28% 68% 7.8 1,250 16 % Dot Thrift 1,471 333 6/27/20 2.5 14000 16 7.6 12.5 $19.00 $6.93 $2.79 48% 80% 9.0 1,250 17 % Dune Core 2,132 159 12/6/20 1.1 16000 16 10.0 10.1 $21.00 $9.87 $5.70 27% 100% 7.0 1,500 19 % Dart Nano 841 114 12/16/2 1.1 18000 016 11.9 6.1 $30.00 $13.41 $5.92 36% 7% 6.0 800 10 % Deft Elite 680 149 12/17/2 1.1 20000 016 14.3 8.1 $34.00 $14.22 $6.90 38% 0% 5.0 800 87% 0.0 $0.00 0% 7.0 500 0% Dim 0 0 4/1/201 0.0 7 0 0.0 $0.00 $0.00 COMP-XM INQUIRER 0% Page 4 Top Thrift Market Segment Analysis Inho Chang Thrift Statistics Total Industry Unit Demand 5,664 Actual Industry Unit Sales 5,664 Segment % of Total Industry 26.7% Next Year's Segment Growth Rate 11.0% Round: 1 December 31, 2016 Perceptual Map for Thrift Segment Thrift Customer Buying Criteria Expectations Importance 1. Price 2. Reliability 3. Ideal Position 4. Age $14.00 - 26.00 55% MTBF 14000-20000 20% Pfmn 7.6 Size 12.5 15% Ideal Age = 3.0 10% Top Products in Thrift Segment Units Sold Revisio Market to n Stock Pfmn Size Name Share Seg Date Out Coord Coord Cust. Dec. Age Promo Aware Sales Cust. Cust. List MTB Dec. Budge Budge Access- Surve Price F 31 t ness t ibility y Cure 29% 1,617 4/11/20 17 7.6 12.5 $18.00 17000 3.56 $1,150 69% $1,000 64% 37 Coat 28% 1,576 4/11/20 17 7.4 12.7 $18.00 17000 3.76 $1,150 68% $1,000 64% 36 Dot 18% 1,006 6/27/20 16 7.6 12.5 $19.00 14000 2.48 $1,000 56% $1,000 72% 24 Aft 16% 914 10/1/20 16 7.1 13.0 $23.00 18000 3.17 $1,500 89% $1,500 66% 24 9% 510 12/6/20 16 10.0 10.1 $21.00 16000 1.11 $1,000 56% $1,800 72% 5 Dune Agap e 1% 35 7/30/20 16 10.0 10.9 $31.50 21000 1.82 $1,500 89% $1,500 66% 1 Cake 0% 5 11/18/2 016 10.8 8.7 $27.00 18000 1.16 $1,150 68% 0 COMP-XM INQUIRER $700 64% Page 5 Top Core Market Segment Analysis Inho Chang Core Statistics Total Industry Unit Demand 7,346 Actual Industry Unit Sales 7,346 Segment % of Total Industry 34.6% Next Year's Segment Growth Rate 10.0% Round: 1 December 31, 2016 Core Customer Buying Criteria Expectations Importance 1. Price $20.00 - 32.00 46% 2. Age Ideal Age = 2.0 20% 3. Reliability MTBF 16000-22000 18% 4. Ideal Position Pfmn 10.0 Size 10.1 16% Perceptual Map for Core Segment Top Products in Core Segment Units Sold Revisio Market to n Stock Pfmn Size Name Share Seg Date Out Coord Coord Cust. Dec. Age Promo Aware Sales Cust. Cust. List MTB Dec. Budge Budge Access- Surve Price F 31 t ness t ibility y Dune 22% 1,622 12/6/20 16 10.0 10.1 $21.00 16000 1.11 $1,000 56% $1,800 63% 39 Cent 15% 1,090 11/16/2 016 11.6 9.3 $27.00 20000 1.18 $1,150 68% $700 69% 22 Agap e 14% 1,050 7/30/20 16 10.0 10.9 $31.50 21000 1.82 $1,500 89% $1,500 72% 23 Cake 13% 964 11/18/2 016 10.8 8.7 $27.00 18000 1.16 $1,150 68% $700 69% 18 Cure 12% 868 4/11/20 17 7.6 12.5 $18.00 17000 3.56 $1,150 69% $1,000 69% 15 Coat 10% 740 4/11/20 17 7.4 12.7 $18.00 17000 3.76 $1,150 68% $1,000 69% 11 Dot 6% 465 6/27/20 16 7.6 12.5 $19.00 14000 2.48 $1,000 56% $1,000 63% 13 Bold 5% 359 11/30/2 YES 11.1 016 7.1 $31.00 23000 1.63 $1,250 77% $900 20% 2 Aft 2% 169 10/1/20 16 7.1 13.0 $23.00 18000 3.17 $1,500 89% $1,500 72% 9 Dart 0% 14 12/16/2 11.9 6.1 $30.00 18000 1.05 $1,000 57% 0 $900 63% 016 Budd y 0% 2 1/4/201 7 13.2 9.1 $35.00 25000 2.91 $1,250 77% $900 20% 0 Deft 0% 2 12/17/2 016 14.3 8.1 $34.00 20000 1.07 $1,000 57% $1,200 63% 0 COMP-XM INQUIRER Page 6 Top Nano Market Segment Analysis Inho Chang Nano Statistics Total Industry Unit Demand 4,160 Actual Industry Unit Sales 4,160 Segment % of Total Industry 19.6% Next Year's Segment Growth Rate 14.0% Round: 1 December 31, 2016 Nano Customer Buying Criteria Expectations Importance 1. Ideal Position Pfmn 11.9 Size 5.9 35% 2. Price $28.00 - 40.00 27% 3. Age Ideal Age = 1.0 20% MTBF 18000-24000 18% 4. Reliability Perceptual Map for Nano Segment Top Products in Nano Segment Unit s Sold Revisio Market to n Stock Pfmn Size Name Share Seg Date Out Coord Coord Bat 20% 825 10/16/2 016 Abby 20% 816 Dart 12.6 Cust. Dec. Age Promo Aware Sales Cust. Cust. List MTB Dec. Budge Budge Access- Surve Price F 31 t ness t ibility y 5.5 $37.00 23000 1.12 $1,250 76% $800 85% 46 5/15/20 YES 11.1 16 6.0 $39.00 24000 1.37 $1,500 88% $1,500 78% 46 15% 612 12/16/2 016 11.9 6.1 $30.00 18000 1.05 $1,000 57% $900 64% 40 Bold 13% 557 11/30/2 YES 11.1 016 7.1 $31.00 23000 1.63 $1,250 77% $900 85% 52 Budd y 7% 274 1/4/201 7 13.2 9.1 $35.00 25000 2.91 $1,250 77% $900 85% 13 Cent 6% 241 11/16/2 016 11.6 9.3 $27.00 20000 1.18 $1,150 68% $700 28% 17 Cake 5% 228 11/18/2 016 10.8 8.7 $27.00 18000 1.16 $1,150 68% $700 28% 15 Deft 5% 211 12/17/2 016 14.3 8.1 $34.00 20000 1.07 $1,000 57% $1,200 64% 7 Beetle 5% 194 10/16/2 016 14.6 7.5 $39.00 25000 1.12 $1,250 76% 7 $800 85% Alan 3% 143 5/29/20 YES 13.1 16 9.0 $42.00 26000 1.34 $1,500 88% $1,500 78% 10 Agap e 1% 7/30/20 16 10.9 $31.50 21000 1.82 $1,500 89% $1,500 78% 0 59 10.0 COMP-XM INQUIRER Page 7 Top Elite Market Segment Analysis Inho Chang Elite Statistics Total Industry Unit Demand 4,034 Actual Industry Unit Sales 4,034 Segment % of Total Industry 19.0% Next Year's Segment Growth Rate 16.0% Round: 1 December 31, 2016 Elite Customer Buying Criteria Expectations Importance 1. Age Ideal Age = 0.0 34% 2. Price $30.00 - 42.00 24% Pfmn 14.2 Size 8.2 22% MTBF 20000-26000 20% 3. Ideal Position 4. Reliability Perceptual Map for Elite Segment Top Products in Elite Segment Unit s Sold Revisio Market to n Stock Pfmn Size Name Share Seg Date Out Coord Coord Beetle 21% 833 10/16/2 016 Alan 19% 777 Budd y 14.6 Cust. Dec. Age Promo Aware Sales Cust. Cust. List MTB Dec. Budge Budge Access- Surve Price F 31 t ness t ibility y $800 85% 40 5/29/20 YES 13.1 16 9.0 $42.00 26000 1.34 $1,500 88% $1,500 86% 35 17% 698 1/4/201 7 13.2 9.1 $35.00 25000 2.91 $1,250 77% $900 85% 26 Deft 12% 466 12/17/2 016 14.3 8.1 $34.00 20000 1.07 $1,000 57% $1,200 55% 28 Bold 7% 302 11/30/2 YES 11.1 016 7.1 $31.00 23000 1.63 $1,250 77% $900 85% 23 Bat 6% 235 10/16/2 016 12.6 5.5 $37.00 23000 1.12 $1,250 76% $800 85% 7 Dart 5% 214 12/16/2 016 11.9 6.1 $30.00 18000 1.05 $1,000 57% $900 55% 8 Abby 4% 167 5/15/20 YES 11.1 16 6.0 $39.00 24000 1.37 $1,500 88% $1,500 86% 6 Cent 3% 139 11/16/2 016 9.3 $27.00 20000 1.18 $1,150 68% 8 11.6 7.5 $39.00 25000 1.12 $1,250 76% $700 15% Agap e 3% 120 7/30/20 16 10.0 10.9 $31.50 21000 1.82 $1,500 89% $1,500 86% 5 Cake 2% 11/18/2 016 10.8 8.7 $27.00 18000 1.16 $1,150 68% 5 83 COMP-XM INQUIRER $700 15% Page 8 Top Market Share Report Inho Chang Actual Market Share in Units Thrif Core Nano Elite t Total Industry Unit Sales 5,664 7,346 4,160 4,034 21,204 % of Market 26.7 34.6 19.6 19.0 % % % % 100.0 % 19.6 4.1% % 4.6% 19.3 % 4.3% Abby Alan Aft Agape 3.4% 16.1 2.3% % 0.6% 14.3 1.4% 3.0% % 5.1% 6.0% Round: 1 December 31, 2016 Total 16.8 16.6 24.5 26.4 % % % % 20.0% 13.4 7.5% % 5.7% 17.3 % 4.6% 19.8 5.8% % 5.0% 20.6 % 4.8% 44.5 51.3 % % 20.2% Bold 4.9% Buddy 0.0% 6.6% Bat Beetle 4.7% Total 4.9% Coat 27.8 10.1 % % 10.9% Cure 28.6 11.8 % % 11.7% Cake 0.1% 13.1 5.5% 2.0% % 6.0% Cent 0.0% 14.8 5.8% 3.5% % 6.9% Total 56.5 49.9 11.3 5.5% % % % 35.6% Dot 17.8 6.3% % 6.9% 22.1 % 10.1% Dune 9.0% 14.7 5.3% % 4.0% 11.6 % 3.2% 26.8 28.6 19.8 16.9 % % % % 24.2% Dart 0.2% Deft 0.0% 5.1% Total Potential Market Share in Units Thrift Core Nano Elite Total 5,664 7,346 4,160 4,034 21,204 26.7% 34.6% 19.6% 19.0% 100.0% Abby 19.8% 4.1% 4.7% Alan 3.9% 21.2% 4.8% Units Demande d % of Market Aft 16.0% 2.3% 5.1% Agape 0.6% 14.2% 1.4% 2.8% 5.9% Total 16.6% 16.5% 25.1% 28.2% 20.4% Bold 5.0% 14.0% 7.8% 6.0% 6.5% 16.8% 4.5% 19.4% 5.7% 4.9% 4.6% 19.9% 4.7% 5.0% 44.5% 50.2% 20.0% Buddy Bat Beetle Total Coat 28.4% 10.3% 11.2% Cure 28.3% 11.8% 11.6% Cake 0.1% 13.1% 5.4% 2.0% 6.0% Cent 14.8% 5.7% 3.3% 6.9% Total 56.8% 49.9% 11.0% 5.3% 35.6% Dot 17.6% 6.3% 6.9% 8.9% 22.0% 10.0% Dune Dart 0.2% 14.4% 5.2% 3.9% Deft 5.0% 11.2% 3.1% Total 26.5% 28.5% 19.4% 16.4% 23.9% COMP-XM INQUIRER Page 9 Top Perceptual Map Round: 1 December 31, 2016 Inho Chang Perceptual Map for All Segments Andrews Name Pfmn Size Chester Revised Name Pfmn Size Digby Revised Name Pfmn Size Revised Abby 11.1 6.0 5/15/2016 Coat 7.4 12.7 4/11/2017 Dot 7.6 12.5 6/27/2016 Alan 13.1 9.0 5/29/2016 Cure 7.6 12.5 4/11/2017 Dune 10.0 10.1 12/6/2016 Aft 7.1 13.0 10/1/2016 Cake 10.8 8.7 11/18/2016 Dart 11.9 6.1 12/16/2016 Agape 10.0 10.9 7/30/2016 Cent 11.6 9.3 11/16/2016 Deft 14.3 8.1 12/17/2016 Baldwin Name Pfmn Size Bold Revised 11.1 7.1 11/30/2016 Buddy 13.2 9.1 1/4/2017 Bat 12.6 5.5 10/16/2016 Beetle 14.6 7.5 10/16/2016 COMP-XM INQUIRER Page 10 Top HR/TQM Report Round: 1 December 31, 2016 Inho Chang HUMAN RESOURCES SUMMARY Andrews Baldwin Chester Digby Needed Complement 620 590 633 447 Complement 620 590 633 447 1st Shift Complement 556 427 362 309 2nd Shift Complement 64 163 271 137 Overtime% 0.0% 0.0% 0.0% 0.0% Turnover Rate 7.8% 10.0% 8.1% 6.5% 48 166 145 77 New Employees Separated Employees 184 0 0 0 $500 $0 $2,500 $5,000 60 0 40 80 100.4% 100.0% 110.9% 121.1% Recruiting Cost $72 $166 $508 $462 Separation Cost $920 $0 $0 $0 Training Cost $744 $0 $506 $714 $1,736 $166 $1,015 $1,176 $26.81 $26.81 $26.81 $26.81 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% Recruiting Spend Training Hours Productivity Index Total HR Admin Cost Labor Contract Next Year Wages 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 Baldwin Chester Digby CPI Systems $0 $0 $0 $0 Vendor/JIT $0 $0 $0 $0 Quality Initiative Training $1,000 $1,250 $0 $0 Channel Support Systems $0 $1,250 $0 $0 Concurrent Engineering $1,500 $1,250 $0 $0 UNEP Green Programs $0 $0 $0 $0 Benchmarking $0 $0 $0 $0 Quality Function Deployment Effort $0 $0 $0 $0 $1,500 $1,250 $0 $0 Process Mgt Budgets Last Year TQM Budgets Last Year CCE/6 Sigma Training GEMI TQEM Sustainability Initiatives $0 $1,250 $0 $0 $4,000 $6,250 $0 $0 Material Cost Reduction 0.10% 0.58% 0.00% 0.00% Labor Cost Reduction 1.98% 3.47% 0.00% 0.00% 13.54% 9.91% 0.00% 0.00% Reduction Admin Costs 0.00% 0.00% 0.00% 0.00% Demand Increase 0.00% 0.94% 0.00% 0.00% Total Expenditures Cumulative Impacts Reduction R&D Cycle Time COMP-XM INQUIRER Page 11 PRINT Annual Report Top Annual Report Andrews C59559 Balance Sheet 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 Receivable: Reflects the lag between delivery and payment of your products. Inventories: The current value of your inventory across all products. A zero indicates your company stocked out. Unmet demand would, of course, fall to your competitors. Plant & Equipment: The current value of your plant. Accum Deprec: The total accumulated depreciation from your plant. Accts Payable: What the company currently owes Round: 5 Dec. 31, 2016 suppliers for materials and services. Current Debt: The debt the company is obligated to pay during the next year of operations. It includes emergency loans used to keep your company solvent should you run out of cash during the 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: The amount of capital invested by shareholders in the company. Retained Earnings: The profits that the company chose to keep instead of paying to shareholders as dividends. ASSETS 2016 2015 Common Size Cash $36,450 28.3% $31,800 Accounts Receivable $11,647 9.0% $13,431 Inventory $20,219 15.7% $25,972 53.0% $71,203 $112,424 87.3% $96,824 ($51,904) -40.3% ($44,409) $60,520 47.0% $52,415 $128,835 100.0% $123,617 5.3% $9,516 Total Current Assets Plant & Equipment Accumulated Depreciation $68,316 Total Fixed Assets Total Assets LIABILITIES & OWNERS' EQUITY Accounts Payable $6,878 Current Debt Long Term Debt $0 0.0% $15,717 $35,209 27.3% $27,209 32.7% $52,442 Total Liabilities $42,087 Common Stock $17,080 13.3% $12,080 Retained Earnings $69,668 54.1% $59,094 $86,748 67.3% $71,174 $128,835 100.0% $123,617 Total Equity Total Liab. & O. Equity Cash Flow Statement The Cash Flow Statement examines what happened in the Cash Account during the year. Cash injections appear as positive numbers and cash withdrawals as negative numbers. The Cash Flow Statement is an excellent tool for diagnosing emergency loans. When negative cash flows exceed positives, you are forced to seek emergency funding. For example, if sales are bad and you find yourself carrying an abundance of excess inventory, the report would show the increase in inventory as a huge negative cash flow. Too much unexpected inventory could outstrip your inflows, exhaust your starting cash and force you to beg for money to keep your company afloat. Cash Flows from Operating Activities: Net Income (Loss) Depreciation 2016 2015 $10,574 $20,139 $7,495 $6,455 $0 $0 ($2,639) $735 Inventory $5,754 ($11,277 ) Accounts Receivable $1,784 $20 Extraordinary gains/losses/writeoffs Accounts Payable Net cash from operations $22,968 $16,072 Cash Flows from Investing Activities: Plant Improvements ($15,600 ($3,520) ) 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) $0 ($13,333 ) $5,000 $0 $0 ($1,935) $8,000 $0 $0 ($7,533) ($15,717 ) $9,992 Net cash from financing activities Net change in cash position Closing cash position ($2,717) ($12,809 ) $4,650 ($257) $36,450 $31,800 Annual Report Page 1 Top Annual Report Andrews Round: 5 Dec. 31, 2016 C59559 2016 Income Statement (Product Name:) Alan 2016 Total Commo n Size Aft Agape Na Na Na Na $38,330 $38,650 $24,908 $39,814 $0 $0 $0 $0 $141,702 100.0% $9,372 $8,666 $7,968 $11,017 $0 $0 $0 $0 $37,024 26.1% $15,133 $14,484 $8,678 $14,115 $0 $0 $0 $0 $52,410 37.0% $649 $0 $0 $0 $0 $2,426 1.7% $24,505 $23,149 $18,424 $25,781 $0 $0 $0 $0 $91,860 64.8% Contribution $13,825 $15,501 $6,483 $14,033 Margin $0 $0 $0 $0 $49,842 35.2% $0 $0 $0 $0 $7,495 5.3% $0 $0 $0 $0 $2,141 1.5% Sales Abby Variable Costs: Direct Labor Direct Material Inventory Carry Total Variable $0 $0 $1,778 Period Costs: Depreciation SG&A: $1,214 $1,194 $2,660 $2,427 $376 $416 $761 $587 R&D Promotion $1,500 $1,500 $1,500 $1,500 $0 $0 $0 $0 $6,000 4.2% $1,500 $1,500 $1,500 $1,500 $0 $0 $0 $0 $6,000 4.2% $766 $0 $0 $0 $0 $2,728 1.9% Total Period $5,329 $5,354 $6,901 $6,780 $0 $0 $0 $0 $24,364 17.2% Net Margin $8,496 $10,147 ($417) $7,252 $0 $0 $0 $0 $25,478 18.0% s Sales Admin $738 $744 $480 Definitions: Sales: Unit sales times list price. Direct Labor: Labor costs incurred to produce the product that was sold. Inventory Carry Cost: the cost to carry unsold goods in inventory. Depreciation: Calculated on straight-line 15-year depreciation of plant value. R&D 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 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 issue new stocks or bonds plus consulting fees your instructor might assess. Write-offs include the 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. Other $4,650 3.3% EBIT $20,828 14.7% Short Term Interest $0 0.0% LongTerm Interest $4,229 3.0% Taxes $5,810 4.1% Profit Sharing Net Profit $216 0.2% $10,574 7.5% Annual Report Page 2 PRINT Annual Report Top Annual Report Baldwin C59559 Balance Sheet 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 Receivable: Reflects the lag between delivery and payment of your products. Inventories: The current value of your inventory across all products. A zero indicates your company stocked out. Unmet demand would, of course, fall to your competitors. Plant & Equipment: The current value of your plant. Accum Deprec: The total accumulated depreciation from your plant. Accts Payable: What Round: 5 Dec. 31, 2016 the company currently owes suppliers for materials and services. Current Debt: The debt the company is obligated to pay during the next year of operations. It includes emergency loans used to keep your company solvent should you run out of cash during the 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: The amount of capital invested by shareholders in the company. Retained Earnings: The profits that the company chose to keep instead of paying to shareholders as dividends. ASSETS 2016 2015 Common Size Cash $17,683 18.4% $19,743 Accounts Receivable $12,417 12.9% $9,829 Inventory $13,363 13.9% $14,832 45.2% $44,404 $93,960 97.7% $84,380 ($41,287) -42.9% ($35,023) Total Current Assets Plant & Equipment Accumulated Depreciation $43,463 Total Fixed Assets $52,673 54.8% $49,357 Total Assets $96,136 100.0% $93,761 LIABILITIES & OWNERS' EQUITY $8,147 8.5% $6,382 Current Debt $14,285 14.9% $18,432 Long Term Debt $20,787 21.6% $19,479 45.0% $44,293 $8,818 9.2% $9,102 $44,099 45.9% $40,367 Accounts Payable Total Liabilities Common Stock Retained Earnings $43,219 Total Equity $52,917 55.0% $49,469 Total Liab. & O. Equity $96,136 100.0% $93,761 Cash Flow Statement The Cash Flow Statement examines what happened in the Cash Account during the year. Cash injections appear as positive numbers and cash withdrawals as negative numbers. The Cash Flow Statement is an excellent tool for diagnosing emergency loans. When negative cash flows exceed positives, you are forced to seek emergency funding. For example, if sales are bad and you find yourself carrying an abundance of excess inventory, the report would show the increase in inventory as a huge negative cash flow. Too much unexpected inventory could outstrip your inflows, exhaust your starting cash and force you to beg for money to keep your company afloat. Cash Flows from Operating Activities: Net Income (Loss) Depreciation Extraordinary gains/losses/writeoffs 2016 2015 $12,157 $11,057 $6,264 $5,625 $0 $0 Accounts Payable $1,765 $997 Inventory $1,469 $318 Accounts Receivable ($2,588)($1,776) Net cash from operations $19,067 $16,221 Cash Flows from Investing Activities: Plant Improvements ($9,580)($6,500) 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 ($7,169)($4,465) $0 $0 ($1,539)($1,829) $1,308 $5,675 $0($6,331) Change in current debt (net) ($4,147) $7,949 Net cash from financing activities ($11,547 $1,000 ) Net change in cash position ($2,060) $10,721 Closing cash position $17,683 $19,743 Annual Report Page 1 Top Annual Report Baldwin Round: 5 Dec. 31, 2016 C59559 2016 Income Statement (Product Name:) Commo n Size Bat Beetle Na Na Na Na $37,738 $34,117 $39,196 $40,020 $0 $0 $0 $0 $151,071 100.0% Direct Labor $11,752 $8,437 $9,173 $8,376 $0 $0 $0 $0 $37,737 25.0% Direct Material $0 $0 $0 $0 $62,851 41.6% $589 $0 $0 $0 $0 $1,604 1.1% $27,909 $23,254 $25,906 $25,123 $0 $0 $0 $0 $102,192 67.6% $9,830 $10,863 $13,290 $14,896 $0 $0 $0 $0 $48,879 32.4% $1,691 $1,213 $1,587 $1,773 $0 $0 $0 $0 $6,264 4.1% $804 $0 $0 $0 $0 $3,535 2.3% $1,250 $1,250 $1,250 $1,250 $0 $0 $0 $0 $5,000 3.3% Sales Bold Buddy 2016 Total Variable Costs: Inventory Carry Total Variable Contribution Margin $16,156 $14,498 $16,038 $16,158 $0 $319 $695 Period Costs: Depreciation SG&A: R&D Promotion $928 $1,000 $804 s Sales $900 $900 $800 $800 $0 $0 $0 $0 $3,400 2.3% Admin $306 $276 $317 $324 $0 $0 $0 $0 $1,224 0.8% Total Period $5,074 $4,640 $4,758 $4,951 $0 $0 $0 $0 $19,423 12.9% Net Margin $4,756 $6,223 $8,532 $9,945 $0 $0 $0 $0 $29,456 19.5% Definitions: Sales: Unit sales times list price. Direct Labor: Labor costs incurred to produce the product that was sold. Inventory Carry Cost: the cost to carry unsold goods in inventory. Depreciation: Calculated on straight-line 15-year depreciation of plant value. R&D 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 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 issue new stocks or bonds plus consulting fees your instructor might assess. Write-offs include the 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. Other $6,338 4.2% EBIT $23,118 15.3% Short Term Interest $1,443 1.0% LongTerm Interest $2,589 1.7% Taxes $6,680 4.4% Profit Sharing Net Profit $248 0.2% $12,157 8.0% Annual Report Page 2 PRINT Annual Report Top Annual Report Chester C59559 Balance Sheet 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 Receivable: Reflects the lag between delivery and payment of your products. Inventories: The current value of your inventory across all products. A zero indicates your company stocked out. Unmet demand would, of course, fall to your competitors. Plant & Equipment: The current value of your plant. Accum Deprec: The total accumulated depreciation from your plant. Accts Payable: What the company currently owes suppliers for materials and Round: 5 Dec. 31, 2016 services. Current Debt: The debt the company is obligated to pay during the next year of operations. It includes emergency loans used to keep your company solvent should you run out of cash during the 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: The amount of capital invested by shareholders in the company. Retained Earnings: The profits that the company chose to keep instead of paying to shareholders as dividends. ASSETS 2016 2015 Common Size Cash $28,837 17.3% $32,141 Accounts Receivable $13,208 7.9% $10,819 $9,877 5.9% $10,445 31.2% $53,405 Inventory Total Current Assets $51,922 Plant & Equipment $177,560 106.7% $142,900 Accumulated Depreciation ($63,102) -37.9% ($51,265) Total Fixed Assets $114,458 68.8% $91,635 Total Assets $166,380 100.0% $145,040 5.5% $7,283 LIABILITIES & OWNERS' EQUITY Accounts Payable $9,136 Current Debt $25,203 15.1% $29,239 Long Term Debt $68,246 41.0% $53,839 61.7% $90,361 Total Liabilities $102,585 Common Stock $27,630 16.6% $24,684 Retained Earnings $36,165 21.7% $29,995 $63,795 38.3% $54,679 $166,380 100.0% $145,040 Total Equity Total Liab. & O. Equity Cash Flow Statement The Cash Flow Statement examines what happened in the Cash Account during the year. Cash injections appear as positive numbers and cash withdrawals as negative numbers. The Cash Flow Statement is an excellent tool for diagnosing emergency loans. When negative cash flows exceed positives, you are forced to seek emergency funding. For example, if sales are bad and you find yourself carrying an abundance of excess inventory, the report would show the increase in inventory as a huge negative cash flow. Too much unexpected inventory could outstrip your inflows, exhaust your starting cash and force you to beg for money to keep your company afloat. Cash Flows from Operating Activities: 2016 2015 Net Income (Loss) $6,170 $7,500 $11,837 $9,527 $0 $0 $1,852 $1,457 Depreciation Extraordinary gains/losses/writeoffs Accounts Payable Inventory $568 ($2,686) Accounts Receivable ($2,389) ($1,038) Net cash from operations $18,038 $14,760 Cash Flows from Investing Activities: Plant Improvements ($34,660 ($15,800 ) ) 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 $0 ($12,694 ) $2,946 $0 $0 $0 $14,408 $9,474 $0 ($7,533) Change in current debt (net) ($4,036) $7,069 Net cash from financing activities $13,318 ($3,685) Net change in cash position ($3,304) ($4,725) Closing cash position $28,837 $32,141 Annual Report Page 1 Top Annual Report Chester C59559 Round: 5 Dec. 31, 2016 2016 Income Statement (Product Name:) Cure Cake 2016 Total Commo n Size Cent Na Na Na Na $41,699 $44,734 $34,544 $39,719 $0 $0 $0 $0 $160,696 100.0% Direct Labor $10,500 $11,229 $9,183 $10,851 $0 $0 $0 $0 $41,763 26.0% Direct Material $0 $0 $0 $0 $69,955 43.5% $458 $0 $0 $0 $0 $1,185 0.7% $28,645 $31,521 $23,940 $28,797 $0 $0 $0 $0 $112,903 70.3% Contribution $13,054 $13,212 $10,605 $10,922 Margin $0 $0 $0 $0 $47,793 29.7% Sales Coat Variable Costs: Inventory Carry Total Variable $18,144 $20,024 $14,300 $17,488 $1 $269 $457 Period Costs: Depreciation $2,800 $3,333 $2,604 $3,100 $0 $0 $0 $0 $11,837 7.4% SG&A: R&D $1,000 $1,000 $891 $0 $0 $0 $0 $3,788 2.4% $1,150 $1,150 $1,150 $1,150 $0 $0 $0 $0 $4,600 2.9% $1,000 $1,000 Promotion s Sales $896 $700 $700 $0 $0 $0 $0 $3,400 2.1% $460 $529 $0 $0 $0 $0 $2,140 1.3% Total Period $6,505 $7,079 $5,810 $6,370 $0 $0 $0 $0 $25,765 16.0% Net Margin $6,549 $6,133 $4,794 $4,552 $0 $0 $0 $0 $22,028 13.7% Admin $555 $596 Definitions: Sales: Unit sales times list price. Direct Labor: Labor costs incurred to produce the product that was sold. Inventory Carry Cost: the cost to carry unsold goods in inventory. Depreciation: Calculated on straight-line 15-year depreciation of plant value. R&D 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 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 issue new stocks or bonds plus consulting fees your instructor might assess. Write-offs include the 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. Other $868 0.5% EBIT $21,161 13.2% Short Term Interest $2,898 1.8% LongTerm Interest $8,576 5.3% Taxes $3,390 2.1% Profit Sharing Net Profit $126 0.1% $6,170 3.8% Annual Report Page 2 PRINT Annual Report Top Annual Report Digby C59559 Balance Sheet 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 Receivable: Reflects the lag between delivery and payment of your products. Inventories: The current value of your inventory across all products. A zero indicates your company stocked out. Unmet demand would, of course, fall to your competitors. Plant & Equipment: The current value of your plant. Accum Deprec: The total accumulated depreciation from your plant. Accts Payable: What the company currently owes suppliers for materials and services. Current Debt: The debt the company is obligated to pay during the next year of operations. It includes emergency loans used to keep your company solvent should you run out of cash during the year. Long Term Round: 5 Dec. 31, 2016 Debt: The company's long term debt is in the form of bonds, and this represents the total value of your bonds. Common Stock: The amount of capital invested by shareholders in the company. Retained Earnings: The profits that the company chose to keep instead of paying to shareholders as dividends. ASSETS 2016 2015 Common Size Cash Accounts Receivable Inventory $20,704 13.8% $32,523 $9,951 6.7% $9,765 $10,843 7.2% $6,447 27.7% $48,735 Total Current Assets $41,498 Plant & Equipment $165,300 110.5% $124,400 Accumulated Depreciation ($57,176) -38.2% ($47,289) Total Fixed Assets $108,124 72.3% $77,111 Total Assets $149,623 100.0% $125,847 $6,648 4.4% $5,796 Current Debt $21,740 14.5% $25,489 Long Term Debt $59,153 39.5% $41,369 58.5% $72,654 LIABILITIES & OWNERS' EQUITY Accounts Payable Total Liabilities $87,541 Common Stock $18,647 12.5% $14,389 Retained Earnings $43,435 29.0% $38,803 $62,082 41.5% $53,192 $149,623 100.0% $125,847 Total Equity Total Liab. & O. Equity Cash Flow Statement The Cash Flow Statement examines what happened in the Cash Account during the year. Cash injections appear as positive numbers and cash withdrawals as negative numbers. The Cash Flow Statement is an excellent tool for diagnosing emergency loans. When negative cash flows exceed positives, you are forced to seek emergency funding. For example, if sales are bad and you find yourself carrying an abundance of excess inventory, the report would show the increase in inventory as a huge negative cash flow. Too much unexpected inventory could outstrip your inflows, exhaust your starting cash and force you to beg for money to keep your company afloat. Cash Flows from Operating Activities: 2016 Net Income (Loss) $4,632 $10,190 2015 Depreciation Extraordinary gains/losses/writeoffs Accounts Payable Inventory Accounts Receivable Net cash from operations $9,887 $8,293 $0 $0 $852 $608 ($4,396) $1,429 ($186) ($954) $10,788 $19,565 Cash Flows from Investing Activities: Plant Improvements ($40,900 ($26,642 ) ) 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 $0 ($6,250) $4,258 $0 $0 $0 $17,784 $15,601 $0 ($5,883) Change in current debt (net) ($3,749) $9,625 Net cash from financing activities $18,293 $13,093 Net change in cash position ($11,819 ) Closing cash position $20,704 $32,523 $6,016 Annual Report Page 1 Top Annual Report Digby C59559 Round: 5 Dec. 31, 2016 2016 Income Statement (Product 2016 Commo Sales $27,956 $44,778 $25,238 $23,104 $0 $0 $0 $0 $121,076 100.0% $4,102 $12,147 $5,036 $4,717 $0 $0 $0 $0 $26,003 21.5% $10,014 $20,233 $10,919 $9,320 $0 $0 $0 $0 $50,487 41.7% $369 $0 $0 $0 $0 $1,301 1.1% $14,500 $32,670 $16,214 $14,407 $0 $0 $0 $0 $77,791 64.2% Contribution $13,456 $12,108 $9,025 $8,697 Margin $0 $0 $0 $0 $43,285 35.8% $0 $0 $0 $0 $9,887 8.2% $977 $1,000 $0 $0 $0 $4,393 3.6% Variable Costs: Direct Labor Direct Material Inventory Carry Total Variable $384 $290 $259 Period Costs: Depreciation SG&A: R&D Promotion $3,500 $3,400 $1,600 $1,387 $496 $947 $973 $1,000 $1,000 $1,000 $1,000 $0 $0 $0 $0 $4,000 3.3% $1,000 $1,800 $900 $1,200 $0 $0 $0 $0 $4,900 4.0% $422 $0 $0 $0 $0 $2,024 1.7% Total Period $6,463 $7,895 $4,895 $4,949 $1,000 $0 $0 $0 $25,203 20.8% Net Margin $6,992 $4,213 $4,130 $3,747($1,000) $0 $0 $0 $18,082 14.9% s Sales Admin $467 $748 $386 Definitions: Sales: Unit sales times list price. Direct Labor: Labor costs incurred to produce the product that was sold. Inventory Carry Cost: the cost to carry unsold goods in inventory. Depreciation: Calculated on straight-line 15-year depreciation of plant value. R&D 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 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 issue new stocks or bonds plus consulting fees your instructor might assess. Write-offs include the 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. Other $1,102 0.9% EBIT $16,980 14.0% Short Term Interest $2,413 2.0% LongTerm Interest $7,295 6.0% Taxes $2,545 2.1% Profit Sharing Net Profit Annual Report $95 0.1% $4,632 3.8% Page 2