Collections Worksheet by gns35030

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									                                         Example 11 Answer


1) Given the "Assumptions and Dashboard" data, perform all calculations from Lessons 1-10 and then de
companies Gross Margin, Pre-Tax Margin, and Net Profit Margin.

2) Calculate the company's ROE, ROA, and Return on Capital

3) Calculate the company's Income per Employee, Revenue per Employee, Receivables Turnover, Inven
and Asset Turnover
wer


rom Lessons 1-10 and then determine the




 , Receivables Turnover, Inventory Turnover,
                                                                                        Period
                                                 1Q X6              2Q X6                3Q X6             4Q X6                 X6
Sales and Collections Worksheet
Unit Sales and Price Inputs
Unit sales                                           900                 900                 900               900
Price per unit                               $    14,000        $     14,000        $     14,000       $    14,000

Sales Composition Inputs
Cash sales as a % of total sales                         45%                 45%                 45%               45%
Credit sales as a % of total sales                       55%                 55%                 55%               55%

Days receivable (DSO)                                    40                 40                   40                40
Days per quarter                                         90                 90                   90                90

COGS Worksheet
Cost-of-Goods Sold Inputs
EFX: cost per unit                           $   7,000.00       $   7,000.00        $   7,000.00       $   7,000.00
LCD Screen: cost per unit                    $     200.00       $     200.00        $     200.00       $     200.00
Assembly labor: cost per unit                $     100.00       $     100.00        $      90.00       $      90.00
  Total                                      $   7,300.00       $   7,300.00        $   7,290.00       $   7,290.00

Inventory and Purchases Worksheet
Inventory Inputs
Days inventory                                           25                 25                   25                25

Disbursements for Purchases Inputs
Days payable                                             35                 35                   35                35

Headcount Overview Worksheet
Headcount Overview Inputs
Number of employees
  Chief Executive Officer                                 1                  1                    1                 1
  Chief Financial Officer                                 1                  1                    1                 1
  VP, Engineering                                         1                  1                    1                 1
  VP, Sales & Marketing                                   1                  1                    1                 1
  VP, Business Development                                1                  1                    1                 1
  Salesperson                                            15                 20                   20                22
  Hardware Engineer                                       4                  5                    5                 5
  Controller/Accountant                                   3                  3                    1                 2
  Administrative Assistant                                5                  5                    4                 4
    Total                                                32                 38                   35                38

Periodic base salaries (annualized)
  Chief Executive Officer                                                                                                $      450,000
  Chief Financial Officer                                                                                                $      200,000
  VP, Engineering                                                                                                        $      155,000
  VP, Sales & Marketing                                                                                                  $      155,000
  VP, Business Development                                                                                               $      155,000
  Salesperson                                                                                                            $      120,000
  Hardware Engineer                                                                                                      $      100,000
  Controller/Accountant                                                                                                  $       75,000
  Administrative Assistant                                                                                               $       45,000

Headcount Cost Worksheet
Headcount Cost Inputs
Benefits rate                                                                                                                       14.00%
Benefits factor (1 + benefits rate)                                                                                                 1.14

Operating Expenses Worksheet
Operating Expenses Inputs
Miscellaneous expenses as a % of sales               5.00%                  5.00%            5.00%             5.00%

R&D expenses as a % of sales                         8.00%                  8.00%            8.00%             8.00%

Rent expense per square foot per quarter     $      5.50        $       5.50        $       5.50       $      5.50
Square feet of space rented                        8,000               8,000               8,000             8,000
  Total rent expense                         $    44,000        $     44,000        $     44,000       $    44,000

Tax rate                                            35.00%              35.00%              35.00%            35.00%

Capital Worksheet
Capital Expenditures (CAPEX) Inputs
Equipment purchases                          $    35,000        $     35,000        $     35,000       $    35,000
Furniture purchases                          $    10,000        $     10,000        $     10,000       $    10,000
Fixtures purchases                           $     8,000        $      8,000        $      8,000       $     8,000
   Total CAPEX purchases                     $    53,000        $     53,000        $     53,000       $    53,000

CAPEX Disbursements Inputs
% of purchases paid for in purchase period               100%               100%             100%               100%

Depreciation Inputs
Equipment depreciable life (years)                                                                                                                    5.0




                                                                                                                         d985d894-b058-49a1-92c5-81baf179113c.xls
                                                                                                                                       Assumptions and Dashboard
Furniture depreciable life (years)                                                                                                                         5.0
Fixtures depreciable life (years)                                                                                                                          4.0

Quarters per year                                                                                                                                          4.0

Equipment depreciation multiplier
Furniture depreciation multiplier                                         Use Straight Line Depreciation
Fixtures depreciation multiplier

Cash Worksheet
Cash Inputs
Minimum cash balance desired                      $     200,000       $        200,000      $    200,000     $    200,000

Equity investment (incremental)                   $     300,000       $             -       $         -      $         -
Borrowing/loan (incremental)                      $      50,000       $         50,000      $     50,000     $         -
Repayments of borrowing (incremental)             $          -        $             -       $         -      $    150,000

Interest rate on borrowing/loan (annual)                                                                                                                12.00%
Interest rate on borrowing/loan (quarterly)                  3.00%                  3.00%            3.00%            3.00%

Loan value used for interest calculations         $      50,000       $        100,000      $    150,000     $         -




DASHBOARD
Is the Balance Sheet balanced?                                                                                                                           Yes
    Sum total of Balance Sheet differences                                                                                                          $       -

Is cash consistent across BS and SCF?                                                                                                                    Yes
   Sum total of BS and SCF differences                                                                                                              $       -

                                                                                               Period
                                                        1Q X6                 2Q X6             3Q X6            4Q X6              X6
Revenues (total sales in dollars)                 $   12,600,000      $     12,600,000      $ 12,600,000     $ 12,600,000     $ 50,400,000

Net Income                                        $   2,125,971       $      1,993,534      $   2,032,745    $   1,975,529    $    8,127,779

Free Cash Flows                                   $     436,418       $      1,239,789      $   1,988,392    $   1,933,529    $    5,598,129

Revenues Data Table
                                                                            Revenues
                                                                            for 1Q X6
Actual                                                            900 $    12,600,000
                                                          750         $    10,500,000
                                                          800         $    11,200,000
                           Unit sales for 1Q X6           850         $    11,900,000
                                                          950         $    13,300,000
                                                        1,000         $    14,000,000

Net Income Data Table
                                                                           Net Income
                                                                            for 1Q X4
Actual                                           $      14,000        $    2,125,971
                                                 $      12,000        $    1,108,071
                                                 $      13,000        $    1,617,021
                        Price per unit for 1Q X6 $      13,500        $    1,871,496
                                                 $      14,500        $    2,380,446
                                                 $      15,000        $    3,624,921

Free Cash Flow Data Table
                                                                          Free Cash Flow
                                                                             for 1Q X4
Actual                                           $       7,000        $       436,418
                                                 $    6,000.00        $       671,418
                                                 $    6,500.00        $       553,918
                    EFX: cost per unit for 1Q X6 $    6,800.00        $       483,418
                                                 $    7,200.00        $       389,418
                                                 $    7,500.00        $       318,918




                                                                                                                              d985d894-b058-49a1-92c5-81baf179113c.xls
                                                                                                                                            Assumptions and Dashboard
                                                                              Period
                                              1Q X6           2Q X6           3Q X6           4Q X6                  X6
SALES BUDGET
Unit Sales and Price Budget
Unit sales                                     900             900             900             900                 3,600
 Price per unit                         $   14,000      $   14,000      $   14,000      $   14,000                N/A
   Total Sales                           $ 12,600,000    $ 12,600,000    $ 12,600,000    $ 12,600,000        $ 50,400,000

Sales Composition Budget
Cash sales                               $   5,670,000   $   5,670,000   $   5,670,000   $   5,670,000       $ 22,680,000
+ Credit sales                              6,930,000       6,930,000       6,930,000       6,930,000           27,720,000
  Total Sales                            $ 12,600,000    $ 12,600,000    $ 12,600,000    $ 12,600,000        $ 50,400,000

COLLECTIONS BUDGET
Cash Collections from Customers Budget
Cash sales this period                   $ 5,670,000     $ 5,670,000     $ 5,670,000     $ 5,670,000         $ 22,680,000
+ Credit sales collected                  3,850,000        6,930,000       6,930,000       6,930,000           24,640,000
  Total Collections                      $ 9,520,000     $ 12,600,000    $ 12,600,000    $ 12,600,000        $ 47,320,000

Accounts Receivable (A/R) Budget
Beginning A/R balance                    $          -    $   3,080,000   $   3,080,000   $   3,080,000       $         -
+ Additions to A/R                           3,080,000       3,080,000       3,080,000       3,080,000         12,320,000
- Subtractions from A/R                             -        3,080,000       3,080,000       3,080,000          9,240,000
   = Ending A/R balance                  $   3,080,000   $   3,080,000   $   3,080,000   $   3,080,000       $ 3,080,000




Loyola University Chicago


School of Business Administration
1 E. Pearson
Chicago, IL 60611-2196
Phone: 312.915.6112
Fax: 312.915.6118




                                                                                                 d985d894-b058-49a1-92c5-81baf179113c.xls
                                                                                                                     Sales and Collections
                                                        Period
                               1Q X6         2Q X6
COST-OF-GOODS SOLD BUDGET
Cost-of-Goods Sold Budget
EFX                         $ 6,300,000   $ 6,300,000
LCD Screen                     180,000       180,000
Assembly labor                   90,000        90,000
 Total cost-of-goods sold   $ 6,570,000   $ 6,570,000
    Period
   3Q X6         4Q X6           X6


$ 6,300,000   $ 6,300,000   $ 25,200,000
   180,000       180,000         720,000
     81,000        81,000        342,000
$ 6,561,000   $ 6,561,000   $ 26,262,000
                                                                       Period
                                          1Q X6         2Q X6         3Q X6             4Q X6                X6
INVENTORY BUDGET
Inventory Budget
Desired ending inventory              $ 1,825,000    $ 1,822,500   $ 1,822,500     $ 1,822,500        $   1,822,500
+ Cost of goods sold                   6,570,000      6,570,000     6,561,000       6,561,000           26,262,000
Total Inventory Needed                $ 8,395,000    $ 8,392,500   $ 8,383,500     $ 8,383,500        $ 28,084,500

PURCHASES BUDGET
Purchases Budget
Total inventory needed                $ 8,395,000    $ 8,392,500   $ 8,383,500     $ 8,383,500              N/A
- Beginning inventory                            -     1,825,000     1,822,500       1,822,500                    -
   Purchases                          $ 8,395,000    $ 6,567,500   $ 6,561,000     $ 6,561,000              N/A

Disbursements for Purchases Budget
Payments of payables                  $ 5,130,278    $ 7,278,194   $ 6,563,528     $ 6,561,000        $ 25,533,000
  Total disbursements for purchases   $ 5,130,278    $ 7,278,194   $ 6,563,528     $ 6,561,000        $ 25,533,000

Accounts Payable (A/P) Budget
Beginning A/P balance                 $        -     $ 3,264,722   $ 2,554,028     $ 2,551,500        $         -
+ Additions to A/P                      3,264,722      2,554,028     2,551,500       2,551,500          10,921,750
- Subtractions from A/P                        -       3,264,722     2,554,028       2,551,500           8,370,250
   Ending A/P                         $ 3,264,722    $ 2,554,028   $ 2,551,500     $ 2,551,500        $ 2,551,500




                                                                                d985d894-b058-49a1-92c5-81baf179113c.xls
                                                                                                 Inventory and Purchases
                                                       Period
                              1Q X6       2Q X6       3Q X6          4Q X6                 X6
HEADCOUNT BUDGET
Headcount Budget
Number of employees
 Chief Executive Officer         1           1           1               1
 Chief Financial Officer         1           1           1               1
 VP, Engineering                 1           1           1               1
 VP, Sales & Marketing           1           1           1               1
 VP, Business Development        1           1           1               1
 Salesperson                    15          20          20              22
 Hardware Engineer               4           5           5               5
 Controller/Accountant           3           3           1               2
 Administrative Assistant        5           5           4               4
   Total                        32          38          35              38

Periodic base salaries
 Chief Executive Officer    $ 112,500   $ 112,500   $ 112,500    $ 112,500          $ 450,000
 Chief Financial Officer       50,000      50,000      50,000       50,000            200,000
 VP, Engineering               38,750      38,750      38,750       38,750            155,000
 VP, Sales & Marketing         38,750      38,750      38,750       38,750            155,000
 VP, Business Development      38,750      38,750      38,750       38,750            155,000
 Salesperson                   30,000      30,000      30,000       30,000            120,000
 Hardware Engineer             25,000      25,000      25,000       25,000            100,000
 Controller/Accountant         18,750      18,750      18,750       18,750             75,000
 Administrative Assistant      11,250      11,250      11,250       11,250             45,000
    Total                   $ 363,750   $ 363,750   $ 363,750    $ 363,750          $ 1,455,000




                                                                d985d894-b058-49a1-92c5-81baf179113c.xls
                                                                                     Headcount Overview
                                                                 Period
                                     1Q X6         2Q X6         3Q X6            4Q X6                  X6
HEADCOUNT BUDGET
Headcount Budget
Periodic salary expense (base)
  Chief Executive Officer        $ 112,500     $ 112,500     $ 112,500     $ 112,500              $  450,000
  Chief Financial Officer           50,000        50,000        50,000        50,000                 200,000
  VP, Engineering                   38,750        38,750        38,750        38,750                 155,000
  VP, Sales & Marketing             38,750        38,750        38,750        38,750                 155,000
  VP, Business Development          38,750        38,750        38,750        38,750                 155,000
  Salesperson                      450,000       600,000       600,000       660,000               2,310,000
  Hardware Engineer                100,000       125,000       125,000       125,000                 475,000
  Controller/Accountant             56,250        56,250        18,750        37,500                 168,750
  Administrative Assistant          56,250        56,250        45,000        45,000                 202,500
    Total                        $ 941,250     $ 1,116,250   $ 1,067,500   $ 1,146,250            $ 4,271,250

    Total (with benefits)        $ 1,073,025   $ 1,272,525   $ 1,216,950   $ 1,306,725            $ 4,869,225




                                                                               d985d894-b058-49a1-92c5-81baf179113c.xls
                                                                                                        Headcount Cost
                                                                            Period
                                               1Q X6          2Q X6         3Q X6          4Q X6                   X6
OPERATING EXPENSES BUDGET
Operating Expenses Budget
Salaries                                  $ 1,073,025      $ 1,272,525   $ 1,216,950   $ 1,306,725         $ 4,869,225
Miscellaneous expenses                         630,000         630,000       630,000       630,000            2,520,000
Research and development                    1,008,000        1,008,000     1,008,000     1,008,000            4,032,000
Rent                                           44,000           44,000        44,000        44,000              176,000
Depreciation                                    2,750            5,500         8,250        11,000              27,500
  Total operating expenses                $ 2,757,775      $ 2,960,025   $ 2,907,200   $ 2,999,725         $ 11,624,725

DISBURSEMENTS FOR OPERATING EXPENSES BUDGET
Disbursements for Operating Expenses Budget
Salaries                                     $ 1,073,025   $ 1,272,525   $ 1,216,950   $ 1,306,725         $ 4,869,225
Miscellaneous expenses                           630,000       630,000       630,000       630,000           2,520,000
Research and development                       1,008,000     1,008,000     1,008,000     1,008,000           4,032,000
Rent                                              44,000        44,000        44,000        44,000             176,000
Depreciation                                          -             -             -             -                   -
  Total disbursements for operating expenses $ 2,755,025   $ 2,954,525   $ 2,898,950   $ 2,988,725         $ 11,597,225




                                                                                        d985d894-b058-49a1-92c5-81baf179113c.xls
                                                                                                             Operating Expenses
                                                                               Period
                                                     1Q X6       2Q X6        3Q X6            4Q X6                X6
CAPITAL BUDGET
Capital Expenditures Budget
Equipment                                        $ 35,000    $ 35,000     $ 35,000         $ 35,000           $ 140,000
Furniture                                         10,000       10,000       10,000           10,000              40,000
Fixtures                                           8,000        8,000        8,000            8,000              32,000
  Total capital expenditures                     $ 53,000    $ 53,000     $ 53,000         $ 53,000           $ 212,000

Disbursements for Capital Expenditures Budget
Equipment                                        $ 35,000    $   35,000   $   35,000       $   35,000         $ 140,000
Furniture                                          10,000        10,000       10,000           10,000            40,000
Fixtures                                            8,000         8,000        8,000            8,000            32,000
  Total disbursements for capital expenditures   $ 53,000    $   53,000   $   53,000       $   53,000         $ 212,000

Depreciation Budget
Equipment                                        $   1,750   $    3,500   $    5,250       $    7,000         $   17,500
Furniture                                              500        1,000        1,500            2,000              5,000
Fixtures                                               500        1,000        1,500            2,000              5,000
  Total depreciation                             $   2,750   $    5,500   $    8,250       $   11,000         $   27,500

Cumulative capital expenditures                  $ 53,000    $ 106,000    $ 159,000        $ 212,000
- Accumulated depreciation                          2,750        8,250       16,500           27,500
   Fixed Assets, Net of Depreciation             $ 50,250    $ 97,750     $ 142,500        $ 184,500


Cumulative disbursements for CAPEX               $ 53,000    $ 106,000    $ 159,000        $ 212,000
Payables adjustment for CAPEX disbursements      $     -     $      -     $      -         $      -




                                                                                        d985d894-b058-49a1-92c5-81baf179113c.xls
                                                                                                                         Capital
                                                                                               Period
                                                         1Q X6              2Q X6             3Q X6             4Q X6               X6
CASH BUDGET
Beginning cash balance                              $             -   $     785,443     $    2,073,283    $    4,108,750   $             -
Cash receipts
 Collections from customers                          9,520,000          12,600,000        12,600,000        12,600,000         47,320,000
   Total cash available, before financing           $ 9,520,000       $ 13,385,443      $ 14,673,283      $ 16,708,750              N/A
Cash disbursements
 Purchases disbursements                            $ 5,130,278       $   7,278,194     $   6,563,528     $   6,561,000    $ 25,533,000
 Operating expenses                                  2,755,025            2,954,525         2,898,950         2,988,725      11,597,225
 Tax expense                                         1,144,754            1,073,441         1,094,555         1,063,746       4,376,496
 Capital expenditures                                   53,000               53,000            53,000            53,000         212,000
   Total disbursements                                9,083,057           11,359,161        10,610,033        10,666,471      41,718,721

Minimum cash balance desired                        $ 200,000         $  200,000        $  200,000        $  200,000               N/A
Total cash needed                                   $ 9,283,057       $ 11,559,161      $ 10,810,033      $ 10,866,471             N/A
Excess (deficiency) of total cash available over
  total cash needed before financing                $   236,943       $   1,826,283     $   3,863,250     $   5,842,279            N/A
Financing
  Equity investment                                 $ 300,000         $         -       $         -       $         -      $      300,000
  Borrowing (at beginning of quarter)                  50,000               50,000            50,000                -             150,000
  Repayments (at end of quarter)                           -                    -                 -           (150,000)          (150,000)
  Interest                                               (1,500)              (3,000)           (4,500)                -            (9,000)
    Total cash increase (decrease) from financing   $ 348,500         $      47,000     $      45,500     $    (150,000)   $      291,000

Ending cash balance                                 $   785,443       $    2,073,283    $    4,108,750    $    5,892,279   $     5,892,279
                                                                                 Period
                                            1Q X6              2Q X6            3Q X6             4Q X6                     X6
Assets
Cash                                   $   785,443         $ 2,073,283      $ 4,108,750      $  5,892,279          $  5,892,279
Accounts Receivable                      3,080,000          3,080,000        3,080,000         3,080,000             3,080,000
Inventory                                1,825,000          1,822,500        1,822,500         1,822,500             1,822,500
Fixed Assets, net                          50,250              97,750          142,500           184,500               184,500
  Total Assets                         $ 5,740,693         $ 7,073,533      $ 9,153,750      $ 10,979,279          $ 10,979,279


Liabilities
Accounts Payable                       $ 3,264,722         $ 2,554,028      $ 2,551,500      $ 2,551,500           $ 2,551,500
Payables from Capital Budget                      -                   -                -                -                     -
Loan Payable                               50,000             100,000          150,000               -                     -
  Total Liabilities                    $ 3,314,722         $ 2,654,028      $ 2,701,500      $ 2,551,500           $ 2,551,500


Owners' Equity
Common Stock                           $     300,000       $   300,000      $   300,000      $     300,000         $     300,000
Retained Earnings                          2,125,971         4,119,505        6,152,250          8,127,779             8,127,779
  Total Owners' Equity                 $   2,425,971       $ 4,419,505      $ 6,452,250      $   8,427,779         $   8,427,779

Total Liabilities and Owners' Equity   $   5,740,693       $ 7,073,533      $ 9,153,750      $ 10,979,279          $ 10,979,279

Balance Sheet calculation check                  -                  -                -                  -                        -

Net Working Capital (NWC)
Current assets                         $   4,905,000       $ 4,902,500      $ 4,902,500      $   4,902,500                 N/A
- Current liabilities                      3,264,722         2,554,028        2,551,500          2,551,500                 N/A
Net Working Capital (NWC)              $   1,640,278       $ 2,348,472      $ 2,351,000      $   2,351,000                 N/A

Beginning NWC                          $          -        $ 1,640,278      $ 2,348,472      $   2,351,000                 N/A
- Ending NWC                               1,640,278         2,348,472        2,351,000          2,351,000                 N/A
Change in NWC                          $   1,640,278       $ 708,194        $     2,528      $          -                  N/A




                                                       0            50000                0                    0
                                                       0                0            50000                    0




                                                                                                  d985d894-b058-49a1-92c5-81baf179113c.xls
                                                                                                                            Balance Sheet
                                                                 Period
                                1Q X6           2Q X6           3Q X6           4Q X6                   X6
Sales                      $ 12,600,000    $ 12,600,000    $ 12,600,000    $ 12,600,000          $ 50,400,000
Cost of goods sold           6,570,000       6,570,000       6,561,000       6,561,000             26,262,000
  Gross profit             $ 6,030,000     $ 6,030,000     $ 6,039,000     $ 6,039,000           $ 24,138,000

Salaries                   $ 1,073,025     $ 1,272,525     $ 1,216,950     $ 1,306,725           $   4,869,225
Miscellaneous expenses        630,000         630,000         630,000         630,000               2,520,000
Research and development    1,008,000       1,008,000       1,008,000       1,008,000               4,032,000
Rent                           44,000          44,000          44,000          44,000                 176,000
Depreciation                    2,750           5,500           8,250          11,000                  27,500
  Income from operations   $ 3,272,225     $ 3,069,975     $ 3,131,800     $ 3,039,275            $ 12,513,275

Interest expense           $     1,500     $     3,000     $     4,500     $       -             $    9,000
   Taxable income          $   3,270,725   $   3,066,975   $   3,127,300   $   3,039,275         $ 12,504,275

Tax expense                $   1,144,754   $   1,073,441   $   1,094,555   $   1,063,746          $    4,376,496
  Net income               $   2,125,971   $   1,993,534   $   2,032,745   $   1,975,529          $    8,127,779




                                                                               d985d894-b058-49a1-92c5-81baf179113c.xls
                                                                                                      Income Statement
                                                                                              Period
                                                           1Q X6             2Q X6            3Q X6            4Q X6                X6
Cash Flows from Operating Activities
Net Income                                            $ 2,125,971       $ 1,993,534      $ 2,032,745      $ 1,975,529      $ 8,127,779
Adjustments to reconcile net income to cash
  provided from operating activites
      Depreciation                                          2,750            5,500            8,250           11,000            27,500
      (Increase) decrease in Accounts Receivable        (3,080,000)             -                -                -         (3,080,000)
      (Increase) decrease in Inventory                  (1,825,000)          2,500               -                -         (1,822,500)
      Increase (decrease) in Accounts Payable            3,264,722        (710,694)          (2,528)              -          2,551,500
      Increase (decrease) in Loan Payable                  50,000           50,000          50,000          (150,000)               -
         Cash provided (used) by operating activities $     538,443     $ 1,340,839      $ 2,088,467      $ 1,836,529      $ 5,804,279


Cash Flows from Investing Activities
Purchase of capital assets                             $   (53,000)     $   (53,000)     $   (53,000)     $   (53,000)     $ (212,000)
        Cash provided (used) by investing activities   $     (53,000)   $    (53,000)    $    (53,000)    $    (53,000)    $ (212,000)


Cash Flows from Financing Activities
Proceeds from sale of Common Stock                     $   300,000      $        -       $        -       $        -       $ 300,000
        Cash provided (used) by financing activities   $    300,000     $            -   $            -   $            -   $ 300,000


Net increase (decrease) in cash                        $    785,443     $ 1,287,839      $ 2,035,467      $ 1,783,529      $ 5,892,279
Cash, beginning of period                                        -         785,443         2,073,283        4,108,750               -
Cash, end of period                                    $    785,443     $ 2,073,283      $ 4,108,750      $ 5,892,279      $ 5,892,279

Cash Flows calculation check                           $           -    $            -   $            -   $            -   $             -

Changes in Balance Sheet Accounts
Accounts Receivable beginning value                    $       -        $ 3,080,000      $ 3,080,000      $ 3,080,000
Accounts Receivable ending value                         3,080,000        3,080,000        3,080,000        3,080,000
(Increase) decrease in Accounts Receivable             $ (3,080,000)    $           -    $           -    $           -

Inventory beginning value                              $       -        $ 1,825,000      $ 1,822,500      $ 1,822,500
Inventory ending value                                   1,825,000        1,822,500        1,822,500        1,822,500
(Increase) decrease in Inventory                       $ (1,825,000)    $       2,500    $           -    $           -

Accounts Payable beginning value                       $       -        $ 3,264,722      $ 2,554,028      $ 2,551,500
Accounts Payable ending value                            3,264,722       2,554,028         2,551,500        2,551,500
(Increase) decrease in Accounts Payable                $ (3,264,722)    $ 710,694        $       2,528    $           -

Loan Payable beginning value                           $          -     $   50,000       $  100,000       $   150,000
Loan Payable ending value                                  50,000         100,000          150,000               -
(Increase) decrease in Loan Payable                    $    (50,000)    $  (50,000)      $   (50,000)     $   150,000




                                                                                                                               d985d894-b058-49a1-92c5-81baf179113c.xls
                                                                                                                                                            Cash Flows
                                        Period
                          1Q X6           2Q X6          3Q X6          4Q X6                 X6
EBIT                 $   3,272,225    $ 3,069,975    $ 3,131,800    $ 3,039,275         $ 12,513,275

Effective tax rate           35.00%         35.00%         35.00%          35.00%

EBIT * (1 - t)       $  2,126,946     $ 1,995,484    $ 2,035,670    $ 1,975,529         $  8,133,629
 + Depreciation           2,750           5,500          8,250         11,000               27,500
 - CAPEX                 53,000          53,000         53,000         53,000              212,000
 - Changes in NWC      1,640,278        708,194          2,528             -             2,351,000
   Free Cash Flow    $    436,418     $ 1,239,789    $ 1,988,392    $ 1,933,529         $ 5,598,129




                                                                      d985d894-b058-49a1-92c5-81baf179113c.xls
                                                                                               Free Cash Flows
                                                                              Period
                                        1Q X6              2Q X6              3Q X6              4Q X6                    X6
Variable Costs
Monitor screen                    $ 6,300,000        $ 6,300,000        $ 6,300,000        $ 6,300,000            $ 25,200,000
Monitor casing                       180,000            180,000            180,000            180,000                  720,000
Assembly labor                         90,000             90,000             81,000             81,000                 342,000
Miscellaneous expenses               630,000            630,000            630,000            630,000                2,520,000
Research and development           1,008,000          1,008,000          1,008,000          1,008,000                4,032,000
  Total variable costs            $ 8,208,000        $ 8,208,000        $ 8,199,000        $ 8,199,000            $ 32,814,000

Fixed Costs
Salaries                          $ 1,073,025        $ 1,272,525        $ 1,216,950        $ 1,306,725            $ 4,869,225
Rent                                   44,000             44,000             44,000             44,000               176,000
Depreciation                            2,750              5,500              8,250             11,000                 27,500
  Total fixed costs               $ 1,119,775        $ 1,322,025        $ 1,269,200        $ 1,361,725            $ 5,072,725

Contribution Margin
Sales                             $ 12,600,000       $ 12,600,000       $ 12,600,000       $ 12,600,000           $ 50,400,000
- Variable costs                     8,208,000          8,208,000          8,199,000          8,199,000             32,814,000
   Contribution Margin            $ 4,392,000        $ 4,392,000        $ 4,401,000        $ 4,401,000            $ 17,586,000
- Fixed costs                        1,119,775          1,322,025          1,269,200          1,361,725              5,072,725
- Interest expense                       1,500              3,000              4,500                 -                   9,000
- Taxes                              1,144,754          1,073,441          1,094,555          1,063,746              4,376,496
   Net Income                     $ 2,125,971        $ 1,993,534        $ 2,032,745        $ 1,975,529            $ 8,127,779

Operating Leverage
Fixed costs                       $ 1,119,775        $ 1,322,025        $ 1,269,200        $ 1,361,725            $ 5,072,725
Total costs (fixed + variable)    $ 9,327,775        $ 9,530,025        $ 9,468,200        $ 9,560,725            $ 37,886,725

Operating leverage                           12.0%              13.9%              13.4%               14.2%                   13.4%

Breakeven Point in Units
Contribution Margin per Unit
Price per unit                    $ 14,000.00        $ 14,000.00        $ 14,000.00        $ 14,000.00
- Variable costs per unit                9,120              9,120              9,110              9,110
   Contribution Margin per Unit   $  4,880.00        $  4,880.00        $  4,890.00        $  4,890.00

Fixed costs                       $   1,119,775      $   1,322,025      $   1,269,200      $   1,361,725

Breakeven point in units                    229                271                260                 278

Breakeven Point in Dollars
Breakeven point in units                 229                271                260                278
* Price per unit                  $    14,000        $    14,000        $    14,000        $    14,000
   Breakeven Point in Dollars     $   3,212,469      $   3,792,695      $   3,633,701      $   3,898,599




                                                                                               d985d894-b058-49a1-92c5-81baf179113c.xls
                                                                                                                     Contribution Margin
                                                                          Period
                                         1Q X6           2Q X6           3Q X6           4Q X6                   X6
Profit Margins
Gross Margin                                47.90%          47.90%          47.90%          47.90%                  47.90%
Pre-Tax Margin                              26.00%          24.30%          24.80%          24.10%                  24.80%
Net Profit Margin                           16.90%          15.80%          16.10%          15.70%                  16.10%

Investment Returns (Annualized)
Return on Equity                           350.50%         180.40%         126.00%          93.80%                  96.40%
Return on Assets                           148.10%         112.70%          88.80%          72.00%                  74.00%
Return on Capital                          343.50%         176.40%         123.20%          93.80%                  96.40%

Management Efficiency (Annualized)
Income/Employee                      $ 265,746       $ 209,846       $ 232,314       $ 207,950           $     213,889
Revenue/Employee                     $ 1,575,000     $ 1,326,316     $ 1,440,000     $ 1,326,316         $    1,326,316
Receivable Turnover                        16.4            16.4            16.4            16.4                   16.4
Inventory Turnover                         14.4            14.4            14.4            14.4                   14.4
Asset Turnover                               8.8             7.1             5.5             4.6                    4.6


Values Used for the
Above Calculations
Gross profit                         $ 6,030,000     $ 6,030,000     $ 6,039,000     $ 6,039,000         $ 24,138,000
Sales                                 12,600,000      12,600,000      12,600,000      12,600,000           50,400,000
Taxable income                         3,270,725       3,066,975       3,127,300       3,039,275           12,504,275
Net income                             2,125,971       1,993,534       2,032,745       1,975,529            8,127,779
Owners' Equity                         2,425,971       4,419,505       6,452,250       8,427,779            8,427,779
Assets                                 5,740,693       7,073,533       9,153,750      10,979,279           10,979,279
Capital                                2,475,971       4,519,505       6,602,250       8,427,779            8,427,779
Employees                                     32              38              35              38                   38
Accounts Receivable                    3,080,000       3,080,000       3,080,000       3,080,000            3,080,000
Cost-of-goods sold                     6,570,000       6,570,000       6,561,000       6,561,000           26,262,000
Inventory                              1,825,000       1,822,500       1,822,500       1,822,500            1,822,500




                                                                                       d985d894-b058-49a1-92c5-81baf179113c.xls
                                                                                                                Financial Ratios

								
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