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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
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
$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.
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
$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.
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
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
$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)
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: