X 4:01 Page 4 image3.jpeg Exhibit 1 INCOME STATEMENTS Net Sales Cost of Goods Sold Gross Profit Selling and Administration 2006 2007 2008 $16,200 $17,450 $16,500 10,445 11,956 11,950 $5,755 $5,404 $4,560 3,054 3,130 3,379 Depreciation 396 720 756 Operating Income $2,305 $1,044 $415 Other Income Interest Income 21 10 2 Other Expense Interest Expense 246 291 407 Income Before Taxes $2,000 $1,363 $10 Income Taxes 624 409 3 Net income $1,456 $964 $7 Exhibit 2 BALANCE SHEETS 2006 2007 2008 Current Assets Cash $234 $122 $61 Temporary Investment 1,034 488 99 Accounts Receivable, Net 3,250 3,450 2,854 Raw Materials Inventory 1,025 1,350 1,395 WIP Inventory 200 Finished Goods Inventory 2,030 138 1.700 42 1,200 Prepaid Expenses 182 Total Current Assets $7.966 143 $7,391 188 $5,839 Fixed Assets Land, Plant, and Equipment $4,893 $7,076 9.590 Less Accumulative Depreciation 1,380 2,100 2.858 Net Land, Plant, Equipment 3,513 4,976 6,734 Total Assets $11,468 $12.367 $12,573 Current Liabilities Accounts Payable $534 $543 500 Income Taxes Payable Current Portion of Long-term Debt 54 1,000 Common Shares Total Current Liabilities Long-term Liabilities Shareholders' Equity Retained Earnings $1,588 35 1,145 $1,723 23 1,340 $1,863 3,190 3,500 4.059 1,350 1,350 1,350 Total Shareholders' Equity Total Liabilities and Shareholders' Equity 5,340 5,794 5,301 $6,600 $7,144 $6.651 $11,468 $12.367 $12,573 9B11N021 QUESTIONS: 1. Perform a financial analysis for 2006, 2007 and 2008 such as: . Cash flow analysis 4:01 X image4.jpeg Page 5 Exhibit 3 BENCHMARK RATIOS Ratio Industry Average Current Ratio 4 Cash Ratio 5 Raw Materials Tumover in Days 31 days WIP Turnover in Days 3 days Finished Goods Turnover in Days 51 days A/R Turnover in Days 63 days A/P Turnover in Days 11 days Cash Conversion Cycle 137 days Fixed Asset Turnover 4.1 Gross Profit Margin Net Profit Margin Total Asset Turnover Long-term Debt to Total Capitalization Cash Flow Coverage Operating Profit Margin 1.7 35% 2 32% 16% 10% ROA 17% ROE 28% 9B11N021