The statement of cash flows for Baldwin Company shows what happens in the Cash account during the year. It can be seen as a summary of the sources and uses of cash (sources of cash are added, uses of cash are subtracted). Please answer which of the following is true if Baldwin issues bonds: Select: 1 It is a use of cash, and will be shown in the investing section as a subtraction. It is a source of cash, and will be shown in the investing section as an addition. It is a use of cash, and will be shown in the financing section as a subtraction It is a source of cash and will be shown in the financing section as an addition. The statement of cash flows for Baldwin Company shows what happens in the Cash account during the year. It can be seen as a summary of the sources and uses of cash (sources of cash are added, uses of cash are subtracted). Please answer which of the following is true if Baldwin issues bonds: Select: 1 It is a use of cash, and will be shown in the investing section as a subtraction. It is a source of cash, and will be shown in the investing section as an addition. It is a use of cash, and will be shown in the financing section as a subtraction It is a source of cash and will be shown in the financing section as an addition. The statement of cash flows for Baldwin Company shows what happens in the Cash account during the year. It can be seen as a summary of the sources and uses of cash (sources of cash are added, uses of cash are subtracted). Please answer which of the following is true if Baldwin issues bonds: Select: 1 It is a use of cash, and will be shown in the investing section as a subtraction. It is a source of cash, and will be shown in the investing section as an addition. It is a use of cash, and will be shown in the financing section as a subtraction It is a source of cash and will be shown in the financing section as an addition. The Digby's workforce complement will grow by 20% (rounded to the nearest person) next year. Ignoring downsizing from automating, what would their total recruiting cost be? Assume Digby spends the same amount extra above the $1,000 recruiting base as they did last year. Select: 1 $3,110,000 $3,732,000 $624,000 $520,000 Next year Baldwin plans to include an additional performance bonus of 0.5% in its compensation plan. This incentive will be provided in addition to the annual raise, if productivity goals are reached. Assuming the goals are reached, how much will Baldwin pay its employees per hour? Select: 1 $29.70 $31.04 $28.29 $28.15 Suppose the Digby company shifts focus to only competing in the Thrift and Nano segments, while competing on price by reducing costs and passing the savings to the customers, what strategy would they be implementing? Select: 1 Niche differentiation Broad differentiation Niche cost leader Broad cost leader Andrews Corp. ended the year carrying $15,362,000 worth of inventory. Had they sold their entire inventory at their current prices, how many more dollars of contribution margin would it have brought to Andrews Corp.? Select: 1 $33,493,075 $15,362,000 $24,447,500 $9,487,000 On the Income Statement, which of the following would be classified as a variable cost? Select: 1 Direct Labor Expense R&D Expense Promotion Expense Depreciation Expense 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: 2 Student: Inho Chang Dec. 31, 2017 Andrews Inho Chang Baldwin Chester Digby Inho Chang Selected Financial Statistics Andrews Baldwin Chester Digby 9.0% 10.4% -0.7% 2.2% 0.94 1.34 0.73 0.74 8.4% 13.9% -0.5% 1.6% 1.4 1.9 2.9 2.5 12.0% 26.4% -1.6% 4.1% $0 $0 $0 $0 Sales $131,543,622 $191,776,108 $158,656,938 $152,898,826 EBIT $22,228,659 $37,633,372 $15,104,213 $19,608,598 Profits $11,789,817 $19,983,151 ($1,157,846) $3,367,708 Cumulative Profit $22,363,593 $32,140,488 $5,012,031 $7,999,706 SG&A / Sales 13.7% 6.5% 8.7% 11.3% Contrib. Margin % 37.3% 34.1% 32.7% 34.5% ROS Asset Turnover ROA Leverage (Assets/Equity) ROE Emergency Loan COMP-XM INQUIRER Page 1 Top Round: 2 Stocks & Bonds Inho Chang December 31 , 2017 Stock Market Summary Shares MarketCap ($M) Book Value Company Close Change EPS Dividend Yield P/E Andrews $73.71 ($8.74) 2,103,561 $155 $46.84 $5.60 $0.00 0.0% 13.2 Baldwin $87.19 $21.97 1,925,257 $168 $39.32 $10.38 $0.00 0.0% 8.4 Chester $28.95 ($11.08) 2,932,149 $85 $25.45 ($0.39) $0.00 0.0% -73.5 Digby $39.43 $0.00 0.0% 30.8 ($6.53) 2,635,183 $104 $31.49 Bond Market Summary $1.28 Company Series# Face Yield Close$ S&P 11.2S2022 $8,837,000 11.0% 101.86 AA 11.9S2023 $7,072,000 11.3% 105.12 AA 10.9S2026 $8,000,000 10.8% 101.12 AA 11.1S2024 $2,504,080 11.8% 93.71 B 11.2S2025 $5,675,277 12.0% 93.65 B 11.5S2026 $1,307,561 12.1% 94.77 B 11.7S2027 $18,390,714 12.2% 95.57 B 11.3S2022 $10,417,600 12.5% 90.09 C 12.5S2023 $14,665,611 13.4% 93.42 C 12.5S2024 $7,981,720 13.5% 92.75 C 12.5S2025 $9,473,587 13.6% 92.17 C 12.9S2026 $14,407,694 13.8% 93.62 C 13.4S2027 $34,619,932 14.0% 95.86 C 11.2S2022 $8,639,846 12.3% 91.36 CC 12.4S2023 $5,828,840 13.1% 94.90 CC 11.9S2025 $15,600,742 13.0% 91.56 CC 12.5S2026 $17,783,553 13.3% 94.00 CC 13.1S2027 $34,893,410 13.5% 96.83 CC Andrews Baldwin Chester Digby Next Year's Prime Rate 8.50% COMP-XM INQUIRER Page 2 Top Financial Summary Cash Flow Statement Survey Round: 2 December 31, 2017 Inho Chang Andrews Baldwin Chester Digby $11,790 $19,983 ($1,158) $3,368 $8,898 $8,117 $15,180 $13,224 $0 $0 $0 $0 Accounts payable ($652) $2,228 ($914) $1,081 Inventory $4,856 ($1,711) $6,359 $5,482 $835 ($3,346) $168 ($2,616) $25,727 $25,271 $19,635 $20,540 ($21,052) ($27,800) ($50,140) ($53,460) Dividends paid $0 $0 $0 $0 Sales of common stock $0 $2,808 $11,991 $17,533 Purchase of common stock $0 $0 $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 receivable Net cash from operations Cash flows from investing activities Plant improvements (net) Cash flows from financing activities Cash from long term debt issued $0 $18,391 $34,620 $34,893 Early retirement of long term debt $0 $0 $0 $0 Retirement of current debt $0 ($14,285) ($25,203) ($21,740) Cash from current debt borrowing $0 $18,282 $31,996 $22,724 Cash from emergency loan $0 $0 $0 $0 Net cash from financing activities $0 $25,197 $53,404 $53,411 $4,675 $22,667 $22,898 $20,491 Andrews Baldwin Chester Digby Cash $41,126 $40,350 $51,736 $41,195 Accounts Receivable $10,812 $15,762 $13,040 $12,567 Inventory $15,362 $15,075 $3,518 $5,361 Total Current Assets $67,300 $71,188 $68,295 $59,122 Plant and equipment $133,476 $121,760 $227,700 $218,760 Accumulated Depreciation ($60,803) ($49,404) ($78,282) ($70,400) $72,673 $72,356 $149,418 $148,360 $139,973 $143,544 $217,712 $207,483 $6,226 $10,374 $8,222 $7,730 Current Debt $11,300 $29,582 $43,296 $34,024 Long Term Debt $23,909 $27,878 $91,566 $82,746 Total Liabilities $41,435 $67,834 $143,084 $124,500 Net change in cash position Balance Sheet Survey Total Fixed Assets Total Assets Accounts Payable Common Stock $17,080 $11,627 $39,621 $36,179 Retained Earnings $81,458 $64,082 $35,007 $46,803 Total Equity $98,538 $75,709 $74,628 $82,982 Total Liabilities & Owners' Equity $139,973 $143,544 $217,712 $207,483 Income Statement Survey Andrews Baldwin Chester Digby Sales $131,544 $191,776 $158,657 $152,899 $82,446 $126,318 $106,811 $100,169 $8,898 $8,117 $15,180 $13,224 $17,970 $12,397 $13,732 $17,276 $0 $7,310 $7,831 $2,621 $22,229 $37,633 $15,104 $19,609 Interest (Short term, Long term) $3,720 $6,263 $16,886 $14,322 Taxes $6,478 $10,980 ($623) $1,850 $241 $408 $0 $69 $11,790 $19,983 ($1,158) $3,368 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: 2 December 31, 2017 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 842 0 7/1/201 1.4 24000 7 12.0 5.5 $39.00 $14.44 $9.80 38% 3% 5.5 928 10 % Alan Elite 842 0 12/21/2 1.2 26000 017 15.0 9.0 $42.00 $14.94 $9.88 42% 4% 5.5 914 10 % Aft Thrift 1,380 574 7/17/20 2.3 18000 17 7.8 12.5 $23.00 $7.54 $6.92 32% 0% 6.0 1,430 74% Agap e Core 5/26/20 1.7 21000 17 9.8 10.2 $31.50 $10.36 $8.30 37% 0% 5.0 1,500 78% Bold Nano 1,584 0 12/3/20 1.3 23000 17 12.6 5.5 $32.00 $13.96 $9.33 30% 100% 6.0 900 19 % Budd y Elite 955 247 1/4/201 2.4 25000 7 15.8 7.0 $35.00 $15.32 $8.84 28% 57% 6.5 850 15 % Bat Nano 1,434 97 9/19/20 1.2 23000 17 13.7 4.3 $37.00 $14.96 $8.05 38% 53% 6.0 1,000 15 % 1,400 291 8/17/20 1.2 25000 17 15.6 6.5 $39.00 $15.41 $8.12 38% 58% 6.0 1,100 15 % Beetle Elite 1,004 357 Coat Thrift 2,080 0 4/11/20 2.7 17000 17 8.4 11.7 $17.00 $7.76 $3.94 31% 100% 9.0 1,550 19 % Cure Thrift 2,547 57 4/11/20 2.6 17000 17 8.6 11.5 $17.00 $7.94 $3.93 30% 96% 9.0 1,700 19 % Cake Core 1,507 86 12/16/2 1.1 18000 017 11.5 8.0 $25.00 $11.07 $4.56 37% 33% 8.0 1,100 13 % Cent Core 1,692 90 12/18/2 1.1 20000 017 12.2 8.5 $25.00 $11.75 $4.50 34% 28% 8.0 1,300 12 % Dot Thrift 1,445 175 12/20/2 3.5 14000 018 7.6 12.5 $18.00 $6.26 $2.38 49% 4% 9.5 1,250 10 % Dune Core 2,243 45 12/6/20 2.1 16000 16 10.0 10.1 $20.00 $9.01 $5.36 26% 43% 8.0 1,500 14 % Dart Nano 1,167 36 12/17/2 1.0 18000 017 12.7 5.0 $30.00 $13.17 $6.61 35% 38% 6.0 850 13 % Deft Elite 924 116 12/18/2 1.0 20000 017 15.5 7.2 $34.00 $14.05 $7.40 38% 13% 6.0 850 11 % Dim Core 743 0 4/1/201 0.8 16000 7 10.6 9.5 $21.00 $9.54 $5.80 26% 100% 7.0 1,040 14 % 0 0 2/10/20 0.0 18 0.0 0.0 $0.00 $0.00 $0.00 7.0 Don 0 COMP-XM INQUIRER 0% 0% Page 4 Top Thrift Market Segment Analysis 600 0% Inho Chang Round: 2 December 31, 2017 Thrift Statistics Total Industry Unit Demand 6,287 Actual Industry Unit Sales 6,287 Segment % of Total Industry 26.4% Next Year's Segment Growth Rate 11.0% 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 8.1 Size 12.0 15% Ideal Age = 3.0 10% Perceptual Map for Thrift Segment Top Products in Thrift Segment Units Sold Revisio Market to n Stock Pfmn Size Name Share Seg Date Out Coord Coord Cure 29% 1,848 4/11/20 17 8.6 Cust. Dec. Age Promo Aware Sales Cust. Cust. List MTB Dec. Budge Budge Access- Surve Price F 31 t ness t ibility y 11.5 $17.00 17000 2.64 $1,200 74% $1,100 67% 42 Coat 25% 1,577 4/11/20 YES 17 8.4 11.7 $17.00 17000 2.74 $1,200 73% $1,100 67% 44 Dot 20% 1,234 12/20/2 018 7.6 12.5 $18.00 14000 3.48 $1,050 61% $1,000 66% 26 Aft 18% 1,115 7/17/20 17 7.8 12.5 $23.00 18000 2.31 $1,500 96% $2,000 68% 25 Dune 7% 448 12/6/20 16 10.0 10.1 $20.00 16000 2.11 $1,050 61% $1,000 66% 14 Agap e 1% 35 5/26/20 17 9.8 10.2 $31.50 21000 1.71 $1,500 96% $2,000 68% 1 Dim 0% 30 4/1/201 YES 10.6 7 9.5 $21.00 16000 0.75 $1,050 48% 3 COMP-XM INQUIRER $900 66% Page 5 Top Core Market Segment Analysis Inho Chang Core Statistics Total Industry Unit Demand 8,081 Actual Industry Unit Sales 8,081 Segment % of Total Industry 34.0% Next Year's Segment Growth Rate 10.0% Round: 2 December 31, 2017 Core Customer Buying Criteria Expectations Importance 1. Price $20.00 - 32.00 46% 2. Age Ideal Age = 2.0 20% MTBF 16000-22000 18% Pfmn 10.8 Size 9.3 16% 3. Reliability 4. Ideal Position 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% 1,795 12/6/20 16 10.0 10.1 $20.00 16000 2.11 $1,050 61% $1,000 65% 38 Cent 18% 1,450 12/18/2 017 12.2 8.5 $25.00 20000 1.10 $1,200 73% $900 70% 30 Cake 16% 1,283 12/16/2 017 11.5 8.0 $25.00 18000 1.09 $1,200 73% $900 70% 26 Agap e 12% 957 5/26/20 17 9.8 10.2 $31.50 21000 1.71 $1,500 96% $2,000 70% 20 Dim 9% 712 4/1/201 YES 10.6 7 9.5 $21.00 16000 0.75 $1,050 48% $900 65% 33 Cure 9% 699 4/11/20 17 8.6 11.5 $17.00 17000 2.64 $1,200 74% $1,100 70% 18 Coat 6% 503 4/11/20 YES 17 8.4 11.7 $17.00 17000 2.74 $1,200 73% $1,100 70% 14 Aft 3% 265 7/17/20 17 7.8 12.5 $23.00 18000 2.31 $1,500 96% $2,000 70% 4 Dot 3% 212 12/20/2 018 7.6 12.5 $18.00 14000 3.48 $1,050 61% $1,000 65% 0 Bold 3% 204 12/3/20 YES 12.6 5.5 $32.00 23000 1.35 $1,300 82% 0 $900 17% 17 COMP-XM INQUIRER Page 6 Top Nano Market Segment Analysis Inho Chang Nano Statistics Total Industry Unit Demand 4,743 Actual Industry Unit Sales 4,743 Segment % of Total Industry 19.9% Next Year's Segment Growth Rate 14.0% Round: 2 December 31, 2017 Nano Customer Buying Criteria Expectations Importance 1. Ideal Position Pfmn 12.7 Size 4.8 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 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 Bat 26% 1,243 9/19/20 17 13.7 4.3 $37.00 23000 1.20 $1,300 82% $800 85% 45 Dart 20% 956 12/17/2 017 12.7 5.0 $30.00 18000 1.04 $1,050 61% $900 65% 41 Bold 20% 950 12/3/20 YES 12.6 17 5.5 $32.00 23000 1.35 $1,300 82% $900 85% 64 Abby 15% 719 7/1/201 YES 12.0 7 5.5 $39.00 24000 1.43 $1,500 95% $1,800 81% 47 Cake 4% 193 12/16/2 017 11.5 8.0 $25.00 18000 1.09 $1,200 73% $900 24% 8 Deft 4% 188 12/18/2 017 15.5 7.2 $34.00 20000 1.05 $1,050 61% $1,500 65% 2 Cent 4% 180 12/18/2 017 12.2 8.5 $25.00 20000 1.10 $1,200 73% $900 24% 9 Beetl e 3% 159 8/17/20 17 15.6 6.5 $39.00 25000 1.24 $1,300 81% $800 85% 4 Alan 3% 155 12/21/2 YES 15.0 017 9.0 $42.00 26000 1.18 $1,500 95% $1,800 81% 0 COMP-XM INQUIRER Page 7 Top Elite Market Segment Analysis Inho Chang Elite Statistics Total Industry Unit Demand 4,679 Actual Industry Unit Sales 4,679 Segment % of Total Industry 19.7% Next Year's Segment Growth Rate 16.0% Round: 2 December 31, 2017 Elite Customer Buying Criteria Expectations Importance 1. Age Ideal Age = 0.0 34% 2. Price $30.00 - 42.00 24% Pfmn 15.3 Size 7.4 22% MTBF 20000-26000 20% 3. Ideal Position 4. Reliability Top Products in Elite 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 Beetle 27% 1,240 8/17/20 17 15.6 6.5 $39.00 25000 1.24 $1,300 81% $800 87% 41 Budd y 20% 955 1/4/201 7 15.8 7.0 $35.00 25000 2.45 $1,300 82% $900 87% 36 Deft 16% 736 12/18/2 017 15.5 7.2 $34.00 20000 1.05 $1,050 61% $1,500 60% 30 Alan 15% 687 12/21/2 YES 15.0 017 9.0 $42.00 26000 1.18 $1,500 95% $1,800 83% 36 Bold 9% 430 12/3/20 YES 12.6 17 5.5 $32.00 23000 1.35 $1,300 82% $900 87% 18 Dart 5% 211 12/17/2 017 12.7 5.0 $30.00 18000 1.04 $1,050 61% $900 60% 4 Bat 4% 191 9/19/20 17 13.7 4.3 $37.00 23000 1.20 $1,300 82% $800 87% 1 Abby 3% 123 7/1/201 YES 12.0 7 5.5 $39.00 24000 1.43 $1,500 95% $1,800 83% 7 Cent 1% 62 12/18/2 017 12.2 8.5 $25.00 20000 1.10 $1,200 73% $900 11% 3 Cake 1% 31 12/16/2 017 11.5 8.0 $25.00 18000 1.09 $1,200 73% $900 11% 1 Agap e 0% 13 5/26/20 17 9.8 10.2 $31.50 21000 1.71 $1,500 96% $2,000 83% 0 COMP-XM INQUIRER Page 8 Top Market Share Report Inho Chang Actual Market Share in Units Industry Unit Sales Thrif Core Nano Elite t Total 6,287 8,081 4,743 4,679 23,790 Round: 2 December 31, 2017 % of Market 26.4 34.0 19.9 19.7 % % % % 100.0 % 15.2 2.6% % 3.5% 14.7 % 3.5% Abby Alan Aft Agape Total Bold 3.3% 17.7 3.3% % 0.6% 5.8% 11.8 % 0.3% 4.2% 18.3 15.1 18.4 17.6 % % % % 17.1% 20.0 9.2% % 6.7% 20.4 % 4.0% 26.2 4.1% % 6.0% 26.5 % 5.9% 49.6 60.2 % % 22.6% 2.5% Buddy Bat Beetle 3.4% Total 2.5% Coat 25.1 6.2% % 8.7% Cure 29.4 8.7% % 10.7% Cake 15.9 4.1% 0.7% % 6.3% Cent 17.9 3.8% 1.3% % 7.1% Total 54.5 48.7 7.9% 2.0% % % 32.9% Dot Dune 19.6 2.6% % 6.1% 22.2 % 9.4% 7.1% Dart Deft 20.1 4.5% % 4.9% 15.7 % 3.9% 4.0% Dim 0.5% 8.8% 3.1% 27.2 33.6 24.1 20.2 % % % % Total 27.4% Potential Market Share in Units Thrift Core Nano Elite Total 6,287 8,081 4,743 4,679 23,790 26.4% 34.0% 19.9% 19.7% 100.0% Abby 22.9% 4.1% 5.4% Alan 3.4% 16.0% 3.8% Units Demande d % of Market Aft Agape 16.8% 3.1% 0.5% 11.2% 5.5% 0.2% 4.0% Total 17.4% 14.3% 26.3% 20.3% 18.7% Bold 2.5% 20.1% 9.5% 6.7% 19.6% 3.9% 22.8% 3.9% 5.3% 3.0% 25.4% 5.6% 2.5% 45.9% 58.4% 21.5% Buddy Bat Beetle Total Coat 28.6% 7.2% 10.0% Cure 27.9% 8.1% 10.1% Cake 15.0% 3.5% 0.6% 5.9% Cent 17.0% 3.3% 1.3% 6.7% Total 56.6% 47.4% 6.9% 1.9% 32.8% Dot 18.6% 2.5% 5.8% 6.7% 21.1% 8.9% Dune Dart 17.5% 4.3% 4.3% Deft 3.5% 15.0% 3.6% Dim Total 0.7% 12.2% 26.1% 35.8% 20.9% 19.3% 4.3% 27.0% COMP-XM INQUIRER Page 9 Top Perceptual Map Inho Chang Round: 2 December 31, 2017 Perceptual Map for All Segments Andrews Name Pfmn Size Revised Abby 12.0 5.5 7/1/2017 Alan 15.0 9.0 12/21/2017 Aft 7.8 12.5 7/17/2017 Agape 9.8 10.2 5/26/2017 Name Pfmn Size Revised Bold 12.6 5.5 12/3/2017 Buddy 15.8 7.0 1/4/2017 Bat 13.7 4.3 9/19/2017 Beetle 15.6 6.5 8/17/2017 COMP-XM INQUIRER Page 10 Top HR/TQM Report Round: 2 December 31, 2017 Inho Chang HUMAN RESOURCES SUMMARY Andrews Baldwin Chester Digby Needed Complement 568 674 462 518 Complement 568 674 462 518 1st Shift Complement 558 403 289 388 2nd Shift Complement 10 271 173 130 Overtime% 0.0% 0.0% 0.0% 0.0% Turnover Rate 7.7% 10.0% 8.0% 6.3% New Employees 44 151 37 104 Separated Employees 52 0 171 0 $500 $0 $2,500 $5,000 60 0 40 80 104.4% 100.0% 113.6% 123.6% Recruiting Spend Training Hours Productivity Index Recruiting Cost $66 $151 $129 $627 Separation Cost $260 $0 $853 $0 Training Cost $682 $0 $370 $829 $1,008 $151 $1,352 $1,456 $28.15 $28.15 $28.15 $28.15 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% 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 $1,250 $0 Vendor/JIT $0 $0 $1,250 $0 Quality Initiative Training $0 $1,250 $0 $0 Channel Support Systems $0 $1,250 $1,500 $0 Concurrent Engineering $0 $1,250 $0 $0 UNEP Green Programs $0 $0 $0 $0 Benchmarking $0 $0 $0 $0 Quality Function Deployment Effort $0 $0 $0 $0 CCE/6 Sigma Training $0 $1,250 $750 $0 GEMI TQEM Sustainability Initiatives $0 $1,250 $750 $0 Total Expenditures $0 $6,250 $5,500 $0 0.10% 2.92% 1.40% 0.00% Process Mgt Budgets Last Year TQM Budgets Last Year Cumulative Impacts Material Cost Reduction Labor Cost Reduction 1.98% 11.25% 0.33% 0.00% 13.54% 32.13% 0.00% 0.00% Reduction Admin Costs 0.00% 0.00% 3.25% 0.00% Demand Increase 0.00% 4.56% 1.16% 0.00% 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 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 Round: 6 Dec. 31, 2017 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 2017 2016 Common Size Cash $41,126 29.4% $36,450 Accounts Receivable $10,812 7.7% $11,647 Inventory $15,362 11.0% $20,219 48.1% $68,316 Total Current Assets $67,300 Plant & Equipment $133,476 95.4% $112,424 Accumulated Depreciation ($60,803) -43.4% ($51,904) $72,673 51.9% $60,520 $139,973 100.0% $128,835 $6,226 4.4% $6,878 Current Debt $11,300 8.1% $0 Long Term Debt $23,909 17.1% $35,209 29.6% $42,087 Total Fixed Assets Total Assets LIABILITIES & OWNERS' EQUITY Accounts Payable Total Liabilities $41,435 Common Stock $17,080 12.2% $17,080 Retained Earnings $81,458 58.2% $69,668 $98,538 70.4% $86,748 $139,973 100.0% $128,835 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 2017 2016 $11,790 $10,574 $8,898 $7,495 Extraordinary gains/losses/writeoffs $0 $0 Accounts Payable ($652) ($2,639) Inventory $4,856 $5,754 $835 $1,784 Accounts Receivable Net cash from operations $25,727 $22,968 Cash Flows from Investing Activities: ($21,052 ($15,600 ) ) Plant Improvements Cash Flows from Financing Activities: Dividends Paid $0 $0 Sales of Common Stock $0 $5,000 Purchase of Common Stock $0 $0 Cash from long term debt $0 $8,000 Retirement of long term debt ($11,300 ) $0 Change in current debt (net) $11,300 ($15,717 ) Net cash from financing activities $0 ($2,717) Net change in cash position Closing cash position $4,675 $4,650 $41,126 $36,450 Annual Report Page 1 Top Annual Report Andrews Round: 6 Dec. 31, 2017 C59559 2017 Income Statement (Product Name:) Abby Alan Aft Agape Na Na Na Na 2017 Commo Total n Size Sales $32,824 $35,349 $31,743 $31,628 $0 $0 $0 $0 $131,544 100.0% $8,249 $8,313 $9,845 $8,416 $0 $0 $0 $0 $34,822 26.5% $12,214 $12,096 $10,718 $10,753 $0 $0 $0 $0 $45,780 34.8% $818 $0 $0 $0 $0 $1,843 1.4% $20,462 $20,408 $21,589 $19,986 $0 $0 $0 $0 $82,446 62.7% Contribution $12,361 $14,940 $10,154 $11,642 Margin $0 $0 $0 $0 $49,097 37.3% $0 $0 $0 $0 $8,898 6.8% $403 $0 $0 $0 $0 $2,442 1.9% $1,500 $1,500 $1,500 $1,500 $0 $0 $0 $0 $6,000 4.6% $1,800 $1,800 $2,000 $2,000 $0 $0 $0 $0 $7,600 5.8% $464 $0 $0 $0 $0 $1,928 1.5% Total Period $6,019 $6,510 $7,373 $6,967 $0 $0 $0 $0 $26,869 20.4% Net Margin $6,343 $8,430 $2,781 $4,674 $0 $0 $0 $0 $22,229 16.9% Variable Costs: Direct Labor Direct Material Inventory Carry Total Variable $0 $0 $1,026 Period Costs: Depreciation SG&A: R&D Promotion s Sales Admin $1,732 $1,706 $2,860 $2,600 $505 $481 $986 $518 $547 $465 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 $0 0.0% EBIT $22,229 16.9% Short Term Interest $1,017 0.8% LongTerm Interest $2,703 2.1% Taxes $6,478 4.9% Profit Sharing Net Profit $241 0.2% $11,790 9.0% 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 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. Round: 6 Dec. 31, 2017 ASSETS 2017 2016 Common Size Cash $40,350 28.1% $17,683 Accounts Receivable $15,762 11.0% $12,417 Inventory $15,075 10.5% $13,363 49.6% $43,463 Total Current Assets $71,187 Plant & Equipment $121,760 84.8% $93,960 Accumulated Depreciation ($49,404) -34.4% ($41,287) $72,356 50.4% $52,673 $143,544 100.0% $96,136 Total Fixed Assets Total Assets LIABILITIES & OWNERS' EQUITY Accounts Payable $10,374 7.2% $8,147 Current Debt $29,582 20.6% $14,285 Long Term Debt $27,878 19.4% $20,787 47.3% $43,219 Total Liabilities $67,834 Common Stock $11,627 8.1% $8,818 Retained Earnings $64,082 44.6% $44,099 52.7% $52,917 Total Equity $75,709 Total Liab. & O. Equity $143,544 100.0% $96,136 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 2017 2016 $19,983 $12,157 $8,117 $6,264 $0 $0 $2,228 $1,765 Inventory ($1,711) $1,469 Accounts Receivable ($3,346) ($2,588) Net cash from operations $25,271 $19,067 Extraordinary gains/losses/writeoffs Accounts Payable Cash Flows from Investing Activities: Plant Improvements ($27,800 ($9,580) ) Cash Flows from Financing Activities: Dividends Paid $0 ($7,169) Sales of Common Stock Purchase of Common Stock $2,808 $0 $0 ($1,539) Cash from long term debt $18,391 $1,308 Retirement of long term debt ($11,300 ) $0 Change in current debt (net) $15,297 ($4,147) Net cash from financing activities $25,197 Net change in cash position $22,667 ($2,060) Closing cash position $40,350 $17,683 ($11,547 ) Annual Report Page 1 Top Annual Report Baldwin Round: 6 Dec. 31, 2017 C59559 2017 Income Statement (Product Name:) Commo n Size Bat Beetle Na Na Na Na $50,696 $33,434 $53,059 $54,587 $0 $0 $0 $0 $191,776 100.0% Direct Labor $14,789 $8,431 $11,681 $11,368 $0 $0 $0 $0 $46,269 Sales Bold Buddy 2017 Total Variable Costs: 24.1% Direct Material $0 $0 $0 $0 $78,240 $819 $0 $0 $0 $0 $1,809 0.9% $35,498 $24,083 $33,087 $33,650 $0 $0 $0 $0 $126,318 65.9% Contribution $15,198 $9,351 $19,972 $20,936 Margin $0 $0 $0 $0 $65,458 34.1% $0 $0 $0 $0 $8,117 4.2% $634 $0 $0 $0 $0 $2,304 1.2% $1,300 $1,300 $1,300 $1,300 $0 $0 $0 $0 $5,200 2.7% Inventory Carry Total Variable $20,709 $14,927 $21,141 $21,463 $0 $725 $265 40.8% Period Costs: Depreciation SG&A: R&D Promotion s $2,104 $1,813 $2,000 $2,200 $934 $9 $727 Sales $900 $900 $800 $800 $0 $0 $0 $0 $3,400 1.8% Admin $395 $260 $413 $425 $0 $0 $0 $0 $1,494 0.8% Total Period $5,633 $4,283 $5,240 $5,359 $0 $0 $0 $0 $20,515 10.7% Net Margin $9,565 $5,069 $14,732 $15,578 $0 $0 $0 $0 $44,943 23.4% 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 $7,310 3.8% EBIT $37,633 19.6% Short Term Interest $3,047 1.6% LongTerm Interest $3,216 1.7% Taxes Profit Sharing Net Profit $10,980 5.7% $408 0.2% $19,983 10.4% 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 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 2017 2016 Common Size Cash $51,736 23.8% $28,837 Accounts Receivable $13,040 6.0% $13,208 Round: 6 Dec. 31, 2017 Inventory $3,518 Total Current Assets $68,294 1.6% $9,877 31.4% $51,922 Plant & Equipment $227,700 104.6% $177,560 Accumulated Depreciation ($78,282) -36.0% ($63,102) Total Fixed Assets $149,418 68.6% $114,458 Total Assets $217,712 100.0% $166,380 $8,222 3.8% $9,136 Current Debt $43,296 19.9% $25,203 Long Term Debt $91,566 42.1% $68,246 65.7% $102,585 LIABILITIES & OWNERS' EQUITY Accounts Payable Total Liabilities $143,084 Common Stock $39,621 18.2% $27,630 Retained Earnings $35,007 16.1% $36,165 $74,628 34.3% $63,795 $217,712 100.0% $166,380 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: 2017 2016 Net Income (Loss) ($1,158) $6,170 Depreciation $15,180 $11,837 Extraordinary gains/losses/writeoffs $0 $0 Accounts Payable ($914) $1,852 Inventory $6,359 $568 Accounts Receivable Net cash from operations $168 ($2,389) $19,635 $18,038 Cash Flows from Investing Activities: Plant Improvements ($50,140 ($34,660 ) ) Cash Flows from Financing Activities: Dividends Paid Sales of Common Stock Purchase of Common Stock $0 $0 $11,991 $2,946 $0 $0 Cash from long term debt $34,620 $14,408 Retirement of long term debt ($11,300 ) Change in current debt (net) $18,093 ($4,036) Net cash from financing activities $53,404 $13,318 Net change in cash position $22,898 ($3,304) Closing cash position $51,736 $28,837 $0 Annual Report Page 1 Top Annual Report Chester Round: 6 Dec. 31, 2017 C59559 2017 Income Statement (Product Name:) Sales Coat Cure Cake 2017 Total Commo n Size Cent Na Na Na Na $35,363 $43,303 $37,687 $42,303 $0 $0 $0 $0 $158,657 100.0% $8,202 $10,107 $7,388 $8,155 $0 $0 $0 $0 $33,851 21.3% $16,238 $20,356 $16,390 $19,553 $0 $0 $0 $0 $72,537 45.7% $178 $0 $0 $0 $0 $422 0.3% $24,440 $30,544 $23,941 $27,885 $0 $0 $0 $0 $106,811 67.3% Variable Costs: Direct Labor Direct Material Inventory Carry Total $0 $82 $163 Variable Contribution $10,923 $12,759 $13,746 $14,418 Margin $0 $0 $0 $0 $51,846 32.7% $0 $0 $0 $0 $15,180 9.6% $976 $0 $0 $0 $0 $2,505 1.6% $1,200 $1,200 $1,200 $1,200 $0 $0 $0 $0 $4,800 3.0% $1,100 $1,100 Period Costs: Depreciation SG&A: R&D Promotion s Sales $4,340 $4,760 $2,787 $3,293 $279 $279 $970 $900 $900 $0 $0 $0 $0 $4,000 2.5% $576 $647 $0 $0 $0 $0 $2,427 1.5% Total Period $7,460 $8,001 $6,433 $7,017 $0 $0 $0 $0 $28,912 18.2% Net Margin $3,463 $4,757 $7,313 $7,401 $0 $0 $0 $0 $22,935 14.5% Admin $541 $662 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 $7,831 4.9% EBIT $15,104 9.5% Short Term Interest $5,196 3.3% LongTerm Interest $11,690 7.4% Taxes ($623) -0.4% Profit Sharing Net Profit $0 0.0% ($1,158) -0.7% Annual Report Page 2 PRINT Annual Report Top Annual Report Digby C59559 Balance Sheet DEFINITIONS: Common Size: Round: 6 Dec. 31, 2017 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 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 2017 2016 Common Size Cash $41,195 19.9% $20,704 Accounts Receivable $12,567 6.1% $9,951 $5,361 2.6% $10,843 28.5% $41,498 105.4% $165,300 Inventory Total Current Assets Plant & Equipment $59,123 $218,760 Accumulated Depreciation ($70,400) -33.9% ($57,176) Total Fixed Assets $148,360 71.5% $108,124 Total Assets $207,483 100.0% $149,623 $7,730 3.7% $6,648 Current Debt $34,024 16.4% $21,740 Long Term Debt $82,746 39.9% $59,153 60.0% $87,541 LIABILITIES & OWNERS' EQUITY Accounts Payable Total Liabilities $124,500 Common Stock $36,179 17.4% $18,647 Retained Earnings $46,803 22.6% $43,435 $82,982 40.0% $62,082 $207,483 100.0% $149,623 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: 2017 2016 Net Income (Loss) $3,368 $4,632 $13,224 $9,887 $0 $0 Accounts Payable $1,081 $852 Inventory $5,482 ($4,396) Depreciation Extraordinary gains/losses/writeoffs Accounts Receivable ($2,616) ($186) Net cash from operations $20,540 $10,788 Cash Flows from Investing Activities: Plant Improvements ($53,460 ($40,900 ) ) Cash Flows from Financing Activities: Dividends Paid Sales of Common Stock Purchase of Common Stock $0 $0 $17,533 $4,258 $0 $0 Cash from long term debt $34,893 $17,784 Retirement of long term debt ($11,300 ) Change in current debt (net) $12,285 ($3,749) Net cash from financing activities $53,411 $18,293 Net change in cash position $20,491 Closing cash position $41,195 $20,704 $0 ($11,819 ) Annual Report Page 1 Top Annual Report Digby Round: 6 Dec. 31, 2017 C59559 2017 Income Statement (Product Name:) Dune Dart Deft 2017 Total Commo n Size Dim Don Na Na $26,017 $44,864 $35,009 $31,413 $15,596 $0 $0 $0 $152,899 100.0% Direct Labor $3,566 $12,072 $7,650 $6,773 $4,308 $0 $0 $0 $34,368 22.5% Direct Material $9,506 $20,922 $14,905 $12,543 $7,281 $0 $0 $0 $65,157 42.6% $0 $0 $0 Sales Dot Variable Costs: Inventory Carry $190 $79 $83 $291 $0 $643 0.4% Total Variable $13,262 $33,073 $22,638 $19,607 $11,589 $0 $0 $0 $100,169 65.5% Contribution $12,755 $11,791 $12,371 $11,806 $4,007 Margin $0 $0 $0 $52,730 34.5% $0 $0 $0 $13,224 8.6% $250 $1,000 $0 $0 $4,200 2.7% Period Costs: Depreciation $3,667 $3,800 $1,700 $1,700 $2,357 SG&A: R&D $1,000 Promotion s Sales $0 $973 $977 $1,050 $1,050 $1,050 $1,050 $1,050 $0 $0 $0 $5,250 3.4% $1,000 $1,000 $900 $1,500 $900 $0 $0 $0 $5,300 3.5% $578 $258 $0 $0 $0 $2,526 1.7% Total Period $7,147 $6,591 $5,202 $5,746 $4,815 $1,000 $0 $0 $30,500 19.9% Net Margin $5,609 $5,200 $7,169 $6,060 ($808)($1,000) $0 $0 $22,230 14.5% Admin $430 $741 $519 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 $2,621 1.7% EBIT $19,609 12.8% Short Term Interest $3,981 2.6% LongTerm Interest $10,341 6.8% Taxes Profit Sharing Net Profit Annual Report $1,850 1.2% $69 0.0% $3,368 2.2% Page 2