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Hampton Machine Tool Company

Exhibit 1
Shipments at Selling Price (thousands of dollars)
As Forecast
As Forecast
Dec. 1978
Actual
Sept. 1979
1979
January
$1,302
$861
February
$1,872
$672
March
$1,635
$1,866
April
$1,053
$1,566
May
$1,293
$873
June
$1,479
$1,620
July
$1,488
$723
August
$1,797
$507
Eight months total
$11,919
$8,688
September
October
November
December

$1,299
$1,347
$1,311
$2,298

$2,163
$1,505
$1,604
$2,265

$2,500
$2,000
$1,500
$1,000
$500
$0

Forecast
Actual

Hampton Machine Tool Company

Exhibit 2
Balance Sheets, 1978-1979 (thousands of dollars)
1978
1979
Nov.
Dec.
Mar.
June
July
Cash
$2,520
$491
$505 $1,152 $1,678
Accounts receivable, net $1,245 $1,863 $1,971 $1,893 $1,269
Inventories
$2,601 $2,478 $3,474 $3,276 $3,624
Current assets
$6,366 $4,832 $5,950 $6,321 $6,571
Gross fixed assets
$4,010 $4,010 $4,010 $4,010 $4,010
Accumulated depreciation$2,998 $3,010 $3,040 $3,070 $3,080
Net fixed assets
$1,012 $1,000
$970
$940
$930
Prepaid expenses
$62
$40
$39
$24
$24
Total assets
$7,440 $5,872 $6,959 $7,285 $7,525

Aug.
$1,559
$684
$4,764
$7,007
$4,010
$3,090
$920
$42
$7,969

Notes payable, bank


$0
Accounts payable
$348
Accruals
$561
Taxes payable*
$150
Customer advances
$840
Current liabilities
$1,899
Common stock ($10 par value)
$1,178
Surplus
$4,363
Net worth
$5,541
Total liabilities and net worth
$7,440

$1,000
$948
$552
$479
$1,566
$4,545
$428
$2,996
$3,424
$7,969

$1,000
$371
$777
$74
$1,040
$3,262
$428
$2,182
$2,610
$5,872

$1,000
$681
$849
$373
$1,040
$3,943
$428
$2,588
$3,016
$6,959

$1,000
$399
$678
$354
$1,566
$3,997
$428
$2,860
$3,288
$7,285

$1,000
$621
$585
$407
$1,566
$4,179
$428
$2,918
$3,346
$7,525

*Tax payments in 1979 include $75,000 due March 15 on underpayment of 1978 taxes and four equal
payments of $181,000 due on the 15th of April, June, September, and December for estimated 1979 tax
liability with any underpayment of 1979 taxes due March 15, 1980.

Hampton Machine Tool Company

Exhibit 3
Income Statements, 1978-1979 (thousands of dollars)
Fiscal
Year
Ending
31/12/78
$7,854
$5,052
$2,802

Dec.
1978
$1,551
$1,122
$429

Jan.
$861
$474
$387

Feb.
$672
$369
$303

Mar.
$1,866
$1,362
$504

Selling and admin expenses $1,296


Interest expense
$0
Net income before taxes $1,506

$248
$0
$181

$103
$15
$269

$61
$15
$227

$205
$15
$284

$172
$15
$242

$723

$87

$129

$109

$136

$783

$94

$140

$118

$50

$25

$0

$0

Net sales
Cost of sales*
Gross profit

Income taxes
Net income
Dividends

1979
Apr.
May
$1,566
$873
$1,137
$567
$429
$306

June
$1,620
$1,197
$423

July
$723
$510
$213

Aug.
$507
$276
$231

$96
$15
$195

$130
$15
$278

$87
$15
$111

$66
$15
$150

$116

$94

$133

$53

$72

$148

$126

$101

$145

$58

$78

$0

$0

$0

$100

$0

$0

* Includes depreciation charges of $150,000 in 1978, $12,000 in December 1987, and $10,000 per month in 1979.

Hampton Machine Tool Company

Exhibit 3
tements, 1978-1979 (thousands of dollars)
Eight
Months
Ending
31/8/79
$8,688
$5,892
$2,796
$920
$120
$1,756
$842
$914
$100

Hampton Machine Tool Company

Hampton Machine Tool


Pro Forma Statements
(thousands of dollars)
Historical
July
$723

Aug.
$507

$597
$126
$15
$111
$53
$58

$342
$165
$15
$150
$72
$78

Sept.
$2,163
$600
$1,320
$105
$2,025
$10
$400
$2,435
($272)
$15
($287)
($138)
($149)

$100
$45

$0
$58

$0
$78

$0
($149)

Cash (plug)
Accounts receivable, net
Inventories
Current assets
Gross fixed assets
Accumulated depreciation
Net fixed assets
Prepaid expenses
Total assets

$1,152
$1,893
$3,276
$6,321
$4,010
$3,070
$940
$24
$7,285

$1,678
$1,269
$3,624
$6,571
$4,010
$3,080
$930
$24
$7,525

$1,559
$684
$4,764
$7,007
$4,010
$3,090
$920
$42
$7,969

Notes payable, bank


Accounts payable
Accruals
Taxes payable*
Customer advances
Current liabilities
Common stock ($10 par value)
Surplus
Net worth
Total liabilities and net worth

$1,000
$399
$678
$354
$1,566
$3,997
$428
$2,860
$3,288
$7,285

$1,000
$621
$585
$407
$1,566
$4,179
$428
$2,918
$3,346
$7,525

$1,000
$948
$552
$479
$1,566
$4,545
$428
$2,996
$3,424
$7,969

June
$1,620

Net sales
Purchases
WIP inventory reduction
Raw materials reduction
Cost of goods sold
Depreciation
Other expenses
Cost of sales and other expenses$1,327
EBIT
$293
Interest expense
$15
Net income before taxes
$278
Income taxes
$133
Net income
$145
Dividends
Earnings retained

Change in cash

$526

($119)

Pro Forma
Oct.
Nov.
$1,505
$1,604
$600
$600
$0
$0
$105
$105
$705
$705
$10
$14
$400
$400
$1,115
$1,119
$390
$486
$15
$20
$375
$466
$145
$223
$230
$242

Dec.
$2,265
$600
$0
$105
$705
$14
$400
$1,119
$1,147
$20
$1,127
$541
$586

$0
$230

$0
$242

$699
$1,323
$3,339
$5,361
$4,010
$3,100
$910
$42
$6,313

$1,007
$779
$3,234
$5,020
$4,360
$3,110
$1,250
$42
$6,312

$766
$1,604
$3,129
$5,499
$4,360
$3,124
$1,237
$42
$6,778

($331)
$2,265
$3,024
$4,958
$4,360
$3,137
$1,223
$42
$6,223

$1,000
$600
$552
$160
$726
$3,038
$428
$2,847
$3,275
$6,313

$1,350
$600
$552
$305
$0
$2,807
$428
$3,077
$3,505
$6,312

$1,350
$600
$552
$529
$0
$3,031
$428
$3,319
$3,747
$6,778

$0
$600
$552
$888
$0
$2,040
$428
$3,755
$4,183
$6,223

($860)

$308

($241)

$150
$436

($1,097)

Hampton Machine Tool


Projected Cash Budget
(thousands of dollars)
September
October
November

December

January

Cash Inflows:
Collections of Receivables:
Bank Loan:
Total cash inflows:
$

Cash Outflows:
Payments of Accounts Payable:
Other Operating Outflows:
Purchase New Equipment:
Tax Payments:
Interest Payments to Bank:
Principal Repayments to Bank:
Dividends:
Total cash outflows:
$

Reconciliation:
Begining cash balance:
Net cash flow:
Ending cash balance: