3 Statement Model Strictly Confidential

Table of Contents
3 Statement Model

Notes
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 Historical Results Projections
FINANCIAL STATEMENTS 2014 2015 2016 2017 2018 2019
Balance Sheet Check OK OK OK ERROR ERROR ERROR

Assumptions
Income statement
Revenue Growth (% Change) 1.0% 2.0% 10.0% 10.0% 10.0%
Cost of Goods Sold (% of Revenue) 65.8% 66.3% 67.1% 65.8% 65.8% 65.8%
Salaries and Benefits ($000's) 963,544 966,981 965,589 965,371 965,371 965,371
Rent and Overhead ($000's) 241,707 225,367 241,300 236,125 236,125 236,125
Depreciation - existing (% of Equipment&Leaseholds Open 8.2% 9.0% 8.7% 7.5% 7.5% 7.5%
Depreciation of new Building (15 years) - 63,363 - 63,363 - 63,363
Interest 40,811.00 39,114.00 38,517.00 119,481 119,481 92,492.78
Tax Rate (% of Earnings Before Tax) 22.0% 22.3% 24.5% 25.0% 25.0% 25.0%
Balance Sheet
Accounts Receivable (Days) 59 66 78 60 30 30
Inventory (Days) 85 91 89 90 90 90
Prepayments (Days) 3 3 3 3 3 3
Accounts Payable (Days) 32 39 46 30 30 30
Customer Deposits (Days) 3 3 3 3 3 3
Accrued expenses payable (Days) 5 5 4 5 5 5
Capital Expenditures - (268,139) (232,764) (250,452) (2,000,000) (300,542)
Debt Issuance (Repayment) - (105,003) (105,003) (305,003) (305,003) (305,003)
Equity Issued (Dividends Paid) - (340,065) (335,207) (500,000) (500,000) (500,000)

Income Statement
Revenue 9,296,407 9,390,310 9,581,949 10,540,144 11,594,158 12,753,574
Cost of Goods Sold (COGS) 6,117,036 6,225,776 6,426,582 6,935,415 7,628,956 8,391,852
Gross Profit 3,179,371 3,164,534 3,155,367 3,604,729 3,965,202 4,361,722
Operating Expenses
Administrative 963,544 966,981 965,589 1,070,371 1,070,371 965,371
Miscellaneous 241,707 225,367 241,300 236,125 236,125 236,125
R&D 278,892 272,319 256,300 269,170 579,708 637,679
Sales & Marketing 381,153 369,833 377,380 376,122 376,122 (63,363)
Rent 160,854 160,854 160,854 160,854 160,854 92,493
Depreciation 99,934 99,934 111,855 41,941 175,274 195,310
Total Operating Expenses 2,126,084 2,095,288 2,113,278 2,154,583 2,598,454 2,063,614
Operating Income 1,053,287 1,069,246 1,042,089 1,450,146 1,366,748 2,298,108
Other Income 6,886 5,098 12,195 12,195 12,195 12,195
 Historical Results Projections
FINANCIAL STATEMENTS 2014 2015 2016 2017 2018 2019
Balance Sheet Check OK OK OK ERROR ERROR ERROR
Interest and Bank Charges 40,811 39,114 38,517 119,481 119,481 92,493
Net Income Before Taxes 1,019,362 1,035,230 1,015,767 1,342,860 1,259,462 2,217,810
Taxes 224,260 230,891 248,734 362,536 341,687 574,527
Net Earnings 795,102 804,339 767,033 980,324 917,775 1,643,283
Check against Case Study Amounts: - - -
 Historical Results Projections
FINANCIAL STATEMENTS 2014 2015 2016 2017 2018 2019
Balance Sheet Check OK OK OK ERROR ERROR ERROR

Balance Sheet
Assets
Current Assets
Cash (LUBOGAN) 33,205 15,772 12,276 (290,637) 433,445
Accounts Receivable 1,502,707 1,697,974 2,047,376 1,732,626 952,945 1,048,239
Inventory 1,424,515 1,552,180 1,563,464 1,710,102 1,881,113 2,069,224
Prepaid Expenses 51,364 55,016 53,012 57,003 62,704 68,974
Total Current Assets 3,011,791 3,320,942 3,676,128 3,209,095 3,330,206 3,186,437
Equipments & Leasehold - Cost 1,986,479 2,254,618 2,487,382 1,536,931 3,536,931 3,837,472
Equipments & Leasehold - AD (871,536) (971,470) (1,083,325) (1,125,266) (1,300,540) (1,495,850)
Net Equipments & Leasehold 1,114,943 1,283,148 1,404,057 411,665 2,236,390 2,341,622
Land - - - 700,000 700,000 700,000
Intangible Assets 54,945 54,945 54,945 54,945 54,945 54,945
Total Assets 4,181,679 4,659,035 5,135,130 4,375,705 6,321,541 6,283,004
- - -
Liabilities
Current Liabilities
Line of credit ($50,000) - - - - - -
Accounts Payable 543,916 661,454 808,091 570,034 627,038 689,741
Customer Deposits 86,711 85,444 88,807 86,631 95,294 104,824
Accrued expenses payable 75,489 77,303 76,575 95,006 104,506 114,957
Current Portion of LTD 105,003 105,003 105,003 305,003 305,003 305,003
Total 811,119 929,204 1,078,476 1,056,674 1,131,841 1,214,525
Long-term Debt 463,748 358,745 253,742 (1,001,713) (1,306,716) (1,306,716)
Total Liabilities 1,274,867 1,287,949 1,332,218 54,962 (174,874) (92,190)
Shareholder's Equity
Capital, Brandon Wood 10,000 10,000 10,000 10,000 10,000 10,000
Capital, Katherine Yates 15,000 15,000 15,000 15,000 15,000 15,000
Retained Earnings 2,881,812 3,346,086 3,777,912 4,258,236 4,676,011 5,819,294
Shareholder's Equity 2,906,812 3,371,086 3,802,912 4,283,236 4,701,011 5,844,294
Total Liabilities & Shareholder's Equity 4,181,679 4,659,035 5,135,130 4,338,197 4,526,137 5,752,103
Check - - - - 37,508 - 1,795,404 - 530,900
 Historical Results Projections
FINANCIAL STATEMENTS 2014 2015 2016 2017 2018 2019
Balance Sheet Check OK OK OK ERROR ERROR ERROR

Cash Flow Statement

Operating Cash Flow
Net Earnings 804,339 767,033 980,324 917,775 1,643,283
Plus: Depreciation & Amortization 99,934 111,855 41,941 175,274 637,679
Less: Changes in Working Capital 208,499 209,410 57,682 (678,138) 206,992
Cash from Operations 695,774 669,478 964,583 1,771,188 2,073,969

Investing Cash Flow

Investments in Property & Equipment (268,139) (232,764) 250,452 (2,000,000) (300,542)
Cash from Investing (268,139) (232,764) 250,452 (2,000,000) (300,542)

Financing Cash Flow

Availment of Loan - - 1,500,000 -
Issuance (repayment) of debt (105,003) (105,003) (305,003) (305,003) (305,003)
Issuance (repayment) of equity/dividends (340,065) (335,207) (500,000) (500,000) (500,000)
Cash from Financing (445,068) (440,210) 694,997 (805,003) (805,003)

Net Increase (decrease) in Cash (17,433) (3,496) 1,910,031 (1,033,815) 1,569,508

Opening Cash Balance 33,205 15,772 12,276 1,922,307 888,492
Closing Cash Balance 33,205 15,772 12,276 1,922,307 888,492 2,458,000

Check - - - 2,212,943.98 455,047.09 2458000.084

 Historical Results Projections
FINANCIAL STATEMENTS 2014 2015 2016 2017 2018 2019
Balance Sheet Check OK OK OK ERROR ERROR ERROR

Supporting Schedules
Working Capital Schedule
Accounts Receivable 1,502,707 1,697,974 2,047,376 1,732,626 952,945 1,048,239
Inventory 1,424,515 1,552,180 1,563,464 1,710,102 1,881,113 2,069,224
Prepaid Expenses 51,364 55,016 53,012 57,003 62,704 68,974
Accounts Payable 543,916 661,454 808,091 570,034 627,038 689,741
Customer Deposits 86,711 85,444 88,807 86,631 95,294 104,824
Accrued expenses payable 75,489 77,303 76,575 95,006 104,506 114,957
Net Working Capital (NWC) 2,272,470 2,480,969 2,690,379 2,748,061 2,069,923 2,276,915
Change in NWC 2,272,470 208,499 209,410 57,682 (678,138) 206,992

Depreciation Schedule (Equipments & Leasehold)

PPE Opening 1,214,877 1,114,943 1,283,148 1,404,057 411,665 2,236,390
Plus Capex - 268,139 232,764 (950,452) 2,000,000 (300,542)
Less Depreciation 99,934 99,934 111,855 41,941 175,274 167,729
PPE Closing 1,114,943 1,283,148 1,404,057 411,665 2,236,390 1,768,119
To check against BS: - - - - -

Debt & Interest Schedule

Debt Opening 568,751 463,748 358,745 (696,710) (1,001,713)
Loan Availment (750,452) -
Issuance (repayment) - (105,003) (105,003) (305,003) (305,003) (305,003)
Debt Closing 568,751 463,748 358,745 (696,710) (1,001,713) (1,306,716)
Interest Expense 40,811 39,114 38,517 119,481 119,481 ###
To check against BS: - - - - -

Retained Earnings Schedule

RE, Beginning 2,377,027 2,881,812 3,346,086 3,777,912 4,258,236
Net Income (Loss) 795,102 804,339 767,033 980,324 917,775
Dividends (290,317) (340,065) (335,207) (500,000) (500,000)
RE, Ending 2,881,812 3,346,086 3,777,912 4,258,236 4,676,011 -
To check against BS: - - - - -
 Historical Results
FINANCIAL STATEMENTS 2014 2015 2016
Balance Sheet Check OK OK OK
Cash Flow Check OK OK OK

Assumptions
Income statement
Revenue Growth (% Change) 1.0% 2.0%
Cost of Goods Sold (% of Revenue) 65.8% 66.3% 67.1%
Depreciation - existing 8.2% 9.0% 8.7%
Rent expense (Reduced to Zero) 160,854 160,854 160,854
Additional Administrative expenses (2 Acctg. Empl.) - - -
R&D (% of Revenue) 3.0% 2.9% 2.7%
Sales & Marketing (% of Revenue) 4.1% 3.9% 3.9%
Depreciation of new Building (15 years) - - -
Interest 40,811 39,114 38,517
Tax Rate (% of Earnings Before Tax) 22.0% 22.3% 24.5%
Balance Sheet
Accounts Receivable (Days) 59 66 78
Inventory (Days) 85 91 89
Prepayments (Days) 3 3 3
Accounts Payable (Days) 32 39 46
Customer Deposits (Days) 3 3 3
Accrued expenses payable (Days) 5 5 4
Capital Expenditures - (268,139) (232,764)
Debt Issuance (Repayment) - - -
Debt Repayment - (105,003) (105,003)
Equity Issued (Dividends Paid) - (340,065) (335,207)

Income Statement
Revenue 9,296,407 9,390,310 9,581,949
Cost of Goods Sold (COGS) 6,117,036 6,225,776 6,426,582
Gross Profit 3,179,371 3,164,534 3,155,367
Operating Expenses
Administrative 963,544 966,981 965,589
Miscellaneous 241,707 225,367 241,300
R&D 278,892 272,319 256,300
Sales & Marketing 381,153 369,833 377,380
Rent 160,854 160,854 160,854
Depreciation 99,934 99,934 111,855
Total Operating Expenses 2,126,084 2,095,288 2,113,278
Operating Income 1,053,287 1,069,246 1,042,089
Other Income 6,886 5,098 12,195
Interest and Bank Charges 40,811 39,114 38,517
Net Income Before Taxes 1,019,362 1,035,230 1,015,767
Taxes 224,260 230,891 248,734
Net Earnings 795,102 804,339 767,033
Check against Case Study Amounts: - - -

Balance Sheet
Assets
Current Assets
Cash 33,205 15,772 12,276
Accounts Receivable 1,502,707 1,697,974 2,047,376
Inventory 1,424,515 1,552,180 1,563,464
Prepaid Expenses 51,364 55,016 53,012
Total Current Assets 3,011,791 3,320,942 3,676,128

NonCurrent Assets
Equipment & Leasehold
Equipments & Leasehold - Cost 1,986,479 2,254,618 2,487,382
Equipments & Leasehold - AD (871,536) (971,470) (1,083,325)
Equipment & Leasehold - Net 1,114,943 1,283,148 1,404,057
Land - - -
Intangible Assets 54,945 54,945 54,945
Total NonCurrent Assets 1,169,888 1,338,093 1,459,002
Total Assets 4,181,679 4,659,035 5,135,130
- - -
Liabilities
Current Liabilities
Line of credit ($50,000) - - -
Accounts Payable 543,916 661,454 808,091
Customer Deposits 86,711 85,444 88,807
Accrued expenses payable 75,489 77,303 76,575
Current Portion of LTD 105,003 105,003 105,003
Total 811,119 929,204 1,078,476
Long-term Debt 463,748 358,745 253,742
Total Liabilities 1,274,867 1,287,949 1,332,218

Shareholder's Equity
Capital, Brandon Wood 10,000 10,000 10,000
Capital, Katherine Yates 15,000 15,000 15,000
Retained Earnings 2,881,812 3,346,086 3,777,912
Shareholder's Equity 2,906,812 3,371,086 3,802,912
Total Liabilities & Shareholder's Equity 4,181,679 4,659,035 5,135,130
- - -
Check - - -

Cash Flow Statement

Operating Cash Flow
Net Earnings 804,339 767,033
Plus: Depreciation & Amortization 99,934 111,855
Plus (Less): Changes in Working Capital 208,499 209,410
Net Cash Flow From Operating Activities 695,774 669,478

Investing Cash Flow

Investments in Property & Equipment (268,139) (232,764)
Net Cash Flow from Investing Activities (268,139) (232,764)

Financing Cash Flow

Availment of Loan - -
Repayment of debt (105,003) (105,003)
Payment of dividends (340,065) (335,207)
Net Cash Flow from Financing Activities (445,068) (440,210)

Net Increase (decrease) in Cash (17,433) (3,496)

Opening Cash Balance 33,205 15,772
Closing Cash Balance 33,205 15,772 12,276
Check - - -

Supporting Schedules
Working Capital Schedule
Accounts Receivable 1,502,707 1,697,974 2,047,376
Inventory 1,424,515 1,552,180 1,563,464
Prepaid Expenses 51,364 55,016 53,012
Accounts Payable 543,916 661,454 808,091
Customer Deposits 86,711 85,444 88,807
Accrued expenses payable 75,489 77,303 76,575
Net Working Capital (NWC) 2,272,470 2,480,969 2,690,379
Change in NWC 2,272,470 208,499 209,410

Depreciation Schedule (Equipments & Leasehold)

Equipments & Leasehold Opening 1,214,877 1,114,943 1,283,148
Plus Capex - 268,139 232,764
Less Depreciation 99,934 99,934 111,855
Equipments & Leasehold Closing 1,114,943 1,283,148 1,404,057
To check against BS: - - -

Debt & Interest Schedule

Debt Opening 568,751 463,748
Loan Availment - -
Repayment - (105,003) (105,003)
Debt Closing 568,751 463,748 358,745
Interest Expense 40,811 39,114 38,517
To check against BS: - - -

Retained Earnings Schedule

RE, Beginning 2,377,027 2,881,812 3,346,086
Net Income (Loss) 795,102 804,339 767,033
Dividends (290,317) (340,065) (335,207)
RE, Ending 2,881,812 3,346,086 3,777,912
To check against BS: - - -

Financial Ratios
Liquidity
Current Ratio 3.71 3.57 3.41
Acid-test 1.89 1.84 1.91
Working Capital 2,200,672 2,391,738 2,597,652
Cash ratio (Cash divided by current liab) 0.04 0.02 0.01

Efficiency
Age of AR 59 66 78
Age of Payables 32 39 46
Age of inventory 85 91 89

Stability
Net Worth/ Total Assets 69.5% 72.4% 74.1%
Interest Coverage 26 27 27
Debt to EBITDA - 0.6 0.6
DEBT to Cash Flow - 0.5 0.5

Growth
Sales 1.01% 2.04%
Net income 1.16% (4.64%)
Total Assets 11.42% 10.22%
Equity 15.97% 12.81%
Profitability
Gross Margin 34.20% 33.70% 32.93%
EBITDA 1,160,107 1,174,278 1,166,139
EBITDA Margin 12.48% 12.51% 12.17%
Profitability Margin 8.55% 8.57% 8.00%
Sales Turnover 2.22 2.02 1.87
ROA 19.01% 17.26% 14.94%
ROE 27.35% 23.86% 20.17%
 Projections
2017 2018 2019
###
###
OK OK OK
OK OK OK

2% 10.0% 10.0%
67% 65.8% 65.8%####
##
8.6% 8.6% 8.6%####
##
160,854 - -
- 105,000 105,000
2.9% 5.0% 5.0%
4.0% 4.0% 4.0%
- 86,667 86,667
39,481 119,481 119,481###
###
25.0% 25.0% 25.0%####
##

78 60 60
90 90 90
3 3 3
46 30 30
3 3 3
5 5 5
(250,452) (2,000,000) (300,542)
- 1,500,000 -
(105,003) (326,871) (326,871)
(337,636) (500,000) (500,000)

9,777,499 10,755,249 11,830,774

###
6,557,737 7,076,954 7,784,649
###
###
3,219,762 3,678,295 4,046,124
###
###

965,371 1,070,371 1,070,371

###
###
236,125 236,125 236,125
###
###
279,468 537,762 591,539
391,100 430,210 473,231
160,854 - -
120,298 206,965 227,001
2,153,216 2,481,433 2,598,267
###
###
 1,066,546 1,196,862 1,447,858
###
###
12,195 12,195 12,195
39,481 119,481 119,481
1,039,261 1,089,576 1,340,572
###
###
266,637 299,215 361,964
###
###
772,624 790,360 978,608
###
###

137,230 (231,203) (433,421)

###
###
2,089,159 1,767,986 1,944,785
###
###
1,616,976 1,745,002 1,919,503
53,899 58,167 63,983
###
###
3,897,265 3,339,953 3,494,850
###
###

2,737,834 4,037,834 4,338,375

(1,203,623) (1,410,588) (1,637,589)
1,534,210 2,627,245 2,700,786
###
###
- 700,000 700,000
54,945 54,945 54,945
1,589,155 3,382,190 3,455,731
###
5,486,420 6,722,143 6,950,581
###
###

- - ###
###
-
824,583 581,667 639,834
###
###
80,363 88,399 97,239
89,832 96,945 106,639
126,871 326,871 200,000
1,121,649 1,093,882 1,043,712
###
###
126,871 1,100,000 900,000
###
###
1,248,520 2,193,882 1,943,712
###
###

10,000 10,000 10,000

###
###
15,000 15,000 15,000
4,212,900 4,503,261 4,981,868
###
###
4,237,900 4,528,261 5,006,868
###
###
5,486,420 6,722,143 6,950,581
###
###

- - ###
###
-

772,624 790,360 978,608

###
###
120,298 206,965 227,001
###
###
74,878 38,887 280,414
###
###
818,045 958,438 925,194
###
###

(250,452) (2,000,000) (300,542)

###
###
(250,452) (2,000,000) (300,542)
###
###

- ### -
(105,003) (326,871) (326,871)
###
###
(337,636) (500,000) (500,000)
###
###
(442,639) 673,129 (826,871)
###
###

124,954 (368,433) (202,219)

###
###
12,276 137,230 (231,203)
###
###
137,230 (231,203) (433,421)
###
###
- - ###
###
-

2,089,159 1,767,986 1,944,785

1,616,976 1,745,002 1,919,503
53,899 58,167 63,983
###
###
824,583 581,667 639,834
80,363 88,399 97,239
89,832 96,945 106,639
2,765,257 2,804,144 3,084,558
###
###
74,878 38,887 280,414
###
###

1,404,057 1,534,210 2,627,245

###
###
250,452 1,300,000 300,542
###
###
 120,298 206,965 227,001
###
###
1,534,210 2,627,245 2,700,786
###
###
- - -

358,745 253,742 1,426,871

###
###
- 1,500,000 -
(105,003) (326,871) (326,871)
###
###
253,742 1,426,871 1,100,000
###
###
39,481 119,481 119,481
###
###
- - -

3,777,912 4,212,900 4,503,261

772,624 790,360 978,608
(337,636) (500,000) (500,000)
4,212,900 4,503,261 4,981,868
###
###
- - -

Industry Ave.
3.47 3.05 3.35 1.29
1.98 1.40 1.45 0.87
2,775,616 2,246,070 2,451,137
0.12 (0.21) (0.42)

Industry Ave.
78 60 60 65
46 30 30 52
90 90 90

77.2% 67.4% 72.0%

27 10 12
0.7 0.7 0.5
0.7 0.4 0.5

Industry Ave.
2.04% 10.00% 10.00%
0.73% 2.30% 23.82%
6.84% 22.52% 3.40%
11.44% 6.85% 10.57%
 Industry Ave.
32.93% 34.20% 34.20% 29.90%
1,199,040 1,416,021 1,687,054
12.26% 13.17% 14.26%
7.90% 7.35% 8.27% 6.60%
1.78 1.60 1.70
14.08% 11.76% 14.08%
18.23% 17.45% 19.55%
 Historical Results
FINANCIAL STATEMENTS 2014 2015 2016
Balance Sheet Check OK OK OK
Cash Flow Check OK OK OK

Assumptions
Income statement
Revenue Growth (% Change) 1.0% 2.0%
Cost of Goods Sold (% of Revenue) 65.8% 66.3% 67.1%
Depreciation - existing 8.2% 9.0% 8.7%
Rent expense (Reduced to Zero) 160,854 160,854 160,854
Additional Administrative expenses (2 Acctg. Empl.) - - -
R&D (% of Revenue) 3.0% 2.9% 2.7%
Sales & Marketing (% of Revenue) 4.1% 3.9% 3.9%
Depreciation of new Building (15 years) - - -
Interest 40,811 39,114 38,517
Tax Rate (% of Earnings Before Tax) 22.0% 22.3% 24.5%
Balance Sheet
Accounts Receivable (Days) 59 66 78
Inventory (Days) 85 91 89
Prepayments (Days) 3 3 3
Accounts Payable (Days) 32 39 46
Customer Deposits (Days) 3 3 3
Accrued expenses payable (Days) 5 5 4
Capital Expenditures - (268,139) (232,764)
Debt Issuance (Repayment) - - -
Debt Repayment - (105,003) (105,003)
Equity Issued (Dividends Paid) - (340,065) (335,207)

Income Statement
Revenue 9,296,407 9,390,310 9,581,949
Cost of Goods Sold (COGS) 6,117,036 6,225,776 6,426,582
Gross Profit 3,179,371 3,164,534 3,155,367
Operating Expenses
Administrative 963,544 966,981 965,589
Miscellaneous 241,707 225,367 241,300
R&D 278,892 272,319 256,300
Sales & Marketing 381,153 369,833 377,380
Rent 160,854 160,854 160,854
Depreciation 99,934 99,934 111,855
Total Operating Expenses 2,126,084 2,095,288 2,113,278
Operating Income 1,053,287 1,069,246 1,042,089
Other Income 6,886 5,098 12,195
Interest and Bank Charges 40,811 39,114 38,517
Net Income Before Taxes 1,019,362 1,035,230 1,015,767
Taxes 224,260 230,891 248,734
Net Earnings 795,102 804,339 767,033
Check against Case Study Amounts: - - -

Balance Sheet
Assets
Current Assets
Cash 33,205 15,772 12,276
Accounts Receivable 1,502,707 1,697,974 2,047,376
Inventory 1,424,515 1,552,180 1,563,464
Prepaid Expenses 51,364 55,016 53,012
Total Current Assets 3,011,791 3,320,942 3,676,128

NonCurrent Assets
Equipment & Leasehold
Equipments & Leasehold - Cost 1,986,479 2,254,618 2,487,382
Equipments & Leasehold - AD (871,536) (971,470) (1,083,325)
Equipment & Leasehold - Net 1,114,943 1,283,148 1,404,057
Land - - -
Intangible Assets 54,945 54,945 54,945
Total NonCurrent Assets 1,169,888 1,338,093 1,459,002
Total Assets 4,181,679 4,659,035 5,135,130
- - -
Liabilities
Current Liabilities
Line of credit ($50,000) - - -
Accounts Payable 543,916 661,454 808,091
Customer Deposits 86,711 85,444 88,807
Accrued expenses payable 75,489 77,303 76,575
Current Portion of LTD 105,003 105,003 105,003
Total 811,119 929,204 1,078,476
Long-term Debt 463,748 358,745 253,742
Total Liabilities 1,274,867 1,287,949 1,332,218

Shareholder's Equity
Capital, Brandon Wood 10,000 10,000 10,000
Capital, Katherine Yates 15,000 15,000 15,000
Retained Earnings 2,881,812 3,346,086 3,777,912
Shareholder's Equity 2,906,812 3,371,086 3,802,912
Total Liabilities & Shareholder's Equity 4,181,679 4,659,035 5,135,130
- - -
Check - - -

Cash Flow Statement

Operating Cash Flow
Net Earnings 804,339 767,033
Plus: Depreciation & Amortization 99,934 111,855
Plus (Less): Changes in Working Capital 208,499 209,410
Net Cash Flow From Operating Activities 695,774 669,478

Investing Cash Flow

Investments in Property & Equipment (268,139) (232,764)
Net Cash Flow from Investing Activities (268,139) (232,764)

Financing Cash Flow

Availment of Loan - -
Repayment of debt (105,003) (105,003)
Payment of dividends (340,065) (335,207)
Net Cash Flow from Financing Activities (445,068) (440,210)

Net Increase (decrease) in Cash (17,433) (3,496)

Opening Cash Balance 33,205 15,772
Closing Cash Balance 33,205 15,772 12,276
Check - - -

Supporting Schedules
Working Capital Schedule
Accounts Receivable 1,502,707 1,697,974 2,047,376
Inventory 1,424,515 1,552,180 1,563,464
Prepaid Expenses 51,364 55,016 53,012
Accounts Payable 543,916 661,454 808,091
Customer Deposits 86,711 85,444 88,807
Accrued expenses payable 75,489 77,303 76,575
Net Working Capital (NWC) 2,272,470 2,480,969 2,690,379
Change in NWC 2,272,470 208,499 209,410

Depreciation Schedule (Equipments & Leasehold)

Equipments & Leasehold Opening 1,214,877 1,114,943 1,283,148
Plus Capex - 268,139 232,764
Less Depreciation 99,934 99,934 111,855
Equipments & Leasehold Closing 1,114,943 1,283,148 1,404,057
To check against BS: - - -

Debt & Interest Schedule

Debt Opening 568,751 463,748
Loan Availment - -
Repayment - (105,003) (105,003)
Debt Closing 568,751 463,748 358,745
Interest Expense 40,811 39,114 38,517
To check against BS: - - -

Retained Earnings Schedule

RE, Beginning 2,377,027 2,881,812 3,346,086
Net Income (Loss) 795,102 804,339 767,033
Dividends (290,317) (340,065) (335,207)
RE, Ending 2,881,812 3,346,086 3,777,912
To check against BS: - - -

Financial Ratios
Liquidity
Current Ratio 3.71 3.57 3.41
Acid-test 1.89 1.84 1.91
Working Capital 2,200,672 2,391,738 2,597,652
Cash ratio (Cash divided by current liab) 0.04 0.02 0.01

Efficiency
Age of AR 59 66 78
Age of Payables 32 39 46
Age of inventory 85 91 89

Stability
Net Worth/ Total Assets 69.5% 72.4% 74.1%
Interest Coverage 26 27 27
Debt to EBITDA - 0.6 0.6
DEBT to Cash Flow - 0.5 0.5

Growth
Sales 1.01% 2.04%
Net income 1.16% (4.64%)
Total Assets 11.42% 10.22%
Equity 15.97% 12.81%
Profitability
Gross Margin 34.20% 33.70% 32.93%
EBITDA 1,160,107 1,174,278 1,166,139
EBITDA Margin 12.48% 12.51% 12.17%
Profitability Margin 8.55% 8.57% 8.00%
Sales Turnover 2.22 2.02 1.87
ROA 19.01% 17.26% 14.94%
ROE 27.35% 23.86% 20.17%
 Projections
2017 2018 2019
###
###
OK OK OK
OK OK OK

2% 10.0% 10.0%
67% 65.8% 65.8%####
##
8.6% 8.6% 8.6%####
##
160,854 - -
- 105,000 105,000
2.9% 5.0% 5.0%
4.0% 4.0% 4.0%
- 86,667 86,667
39,481 119,481 119,481###
###
25.0% 25.0% 25.0%####
##

78 60 60
90 90 90
3 3 3
46 30 30
3 3 3
5 5 5
(250,452) (2,000,000) (300,542)
- 1,500,000 -
(105,003) (326,871) (326,871)
(337,636) (200,000) (200,000)

9,777,499 10,755,249 11,830,774

###
6,557,737 7,076,954 7,784,649
###
###
3,219,762 3,678,295 4,046,124
###
###

965,371 1,070,371 1,070,371

###
###
236,125 236,125 236,125
###
###
279,468 537,762 591,539
391,100 430,210 473,231
160,854 - -
120,298 206,965 227,001
2,153,216 2,481,433 2,598,267
###
###
 1,066,546 1,196,862 1,447,858
###
###
12,195 12,195 12,195
39,481 119,481 119,481
1,039,261 1,089,576 1,340,572
###
###
266,637 299,215 361,964
###
###
772,624 790,360 978,608
###
###

137,230 68,797 166,579

###
###
2,089,159 1,767,986 1,944,785
###
###
1,616,976 1,745,002 1,919,503
53,899 58,167 63,983
###
###
3,897,265 3,639,953 4,094,850
###
###

2,737,834 4,037,834 4,338,375

(1,203,623) (1,410,588) (1,637,589)
1,534,210 2,627,245 2,700,786
###
###
- 700,000 700,000
54,945 54,945 54,945
1,589,155 3,382,190 3,455,731
###
5,486,420 7,022,143 7,550,581
###
###

- - ###
###
-
824,583 581,667 639,834
###
###
80,363 88,399 97,239
89,832 96,945 106,639
126,871 326,871 200,000
1,121,649 1,093,882 1,043,712
###
###
126,871 1,100,000 900,000
###
###
1,248,520 2,193,882 1,943,712
###
###

10,000 10,000 10,000

###
###
15,000 15,000 15,000
4,212,900 4,803,261 5,581,868
###
###
4,237,900 4,828,261 5,606,868
###
###
5,486,420 7,022,143 7,550,581
###
###

- - ###
###
-

772,624 790,360 978,608

###
###
120,298 206,965 227,001
###
###
74,878 38,887 280,414
###
###
818,045 958,438 925,194
###
###

(250,452) (2,000,000) (300,542)

###
###
(250,452) (2,000,000) (300,542)
###
###

- ### -
(105,003) (326,871) (326,871)
###
###
(337,636) (200,000) (200,000)
###
###
(442,639) 973,129 (526,871)
###
###

124,954 (68,433) 97,781

###
###
12,276 137,230 68,797
###
###
137,230 68,797 166,579
###
###
- - ###
###
-

2,089,159 1,767,986 1,944,785

1,616,976 1,745,002 1,919,503
53,899 58,167 63,983
###
###
824,583 581,667 639,834
80,363 88,399 97,239
89,832 96,945 106,639
2,765,257 2,804,144 3,084,558
###
###
74,878 38,887 280,414
###
###

1,404,057 1,534,210 2,627,245

###
###
250,452 1,300,000 300,542
###
###
 120,298 206,965 227,001
###
###
1,534,210 2,627,245 2,700,786
###
###
- - -

358,745 253,742 1,426,871

###
###
- 1,500,000 -
(105,003) (326,871) (326,871)
###
###
253,742 1,426,871 1,100,000
###
###
39,481 119,481 119,481
###
###
- - -

3,777,912 4,212,900 4,803,261

772,624 790,360 978,608
(337,636) (200,000) (200,000)
4,212,900 4,803,261 5,581,868
###
###
- - -

Industry Ave.
3.47 3.33 3.92 1.29
1.98 1.68 2.02 0.87
2,775,616 2,546,070 3,051,137
0.12 0.06 0.16

Industry Ave.
78 60 60 65
46 30 30 52
90 90 90

77.2% 68.8% 74.3%

27 10 12
0.7 0.7 0.5
0.7 0.4 0.5

Industry Ave.
2.04% 10.00% 10.00%
0.73% 2.30% 23.82%
6.84% 27.99% 7.53%
11.44% 13.93% 16.13%
 Industry Ave.
32.93% 34.20% 34.20% 29.90%
1,199,040 1,416,021 1,687,054
12.26% 13.17% 14.26%
7.90% 7.35% 8.27% 6.60%
1.78 1.53 1.57
14.08% 11.26% 12.96%
18.23% 16.37% 17.45%
Sales Growth
Yates Forecast 10%
Industry Growth 3.90%
Canada Growth 3%

Recommendations
Dividends Payment (Negotiate with Wood
Amount
since he'll benefit as well to the success of the grow
Company Plan - 500,000
Remain around 350k Level - 350,000
Cut to 200k - 200,000
Cut to 150k - 150,000
Cut to 100k - 100,000
Don't pay -

Negotiate longer purchase terms wPayment terms CGS Level

Agreed purchase term 30 66%
Possible negotiated purchase term - 40 66%
Possible negotiated purchase term- 50 67.10%

Cost control measures (cons,

level R&D
of forecasted R&D might 2018 2019
be highly Based
correlated withyears
on recent the 0.03 0.03
success ofMiinimize
the forecasted
to 2% sales 0.02 0.02
growth) Based on percentage of sal 0.05 0.05
DEPRECIATION
- Depreciation Methodology Used:
- Years remaining for depreciation of existing assets:
- Years used for depreciation of new assets:

Category Amount 2017

Depreciation to Existing Assets $ 1,404,057 $ 103,602
New Depreciable Assets
2017 (Same as prior year) 250,452 16,697
2018 (Capex amount is indicated in case) 1,300,000 -
2019 (2017 capex level adjusted to 2017-2019 sales growth) 300,542 -
Grand Total $ 120,298
 Straight Line
xisting assets: 14 years
15 years

2018 2019
$ 103,602 $ 103,602

16,697 16,697
86,667 86,667
- 20,036
$ 206,965 $ 227,001
 2014 2015 2016
Beginning 2,377,027 2,881,812 3,346,086
Net income 795,102 804,339 767,033
Dividends - 290,317 - 340,065 - 335,207
Ending 2,881,812 3,346,086 3,777,912
to check: - - -

Net income checking - - -