Scarpin Co

Sales
For the Year Ended December 31
Month
January February March April May June
Unit sales 30,000 20,000 35,000 38,000 26,000 22,000
Multiply by: Sales price $ 100 $ 100 $ 100 $ 100 $ 100 $ 100
Total sales revenue $ 3,000,000 $ 2,000,000 $ 3,500,000 $ 3,800,000 $ 2,600,000 $ 2,200,000

Percentage of sales
Cash sales 30.00% 30.00% 30.00% 30.00% 30.00% 20.00%
Credit sales 70.00% 70.00% 70.00% 70.00% 70.00% 80.00%

Type of sale
Cash sales $ 900,000 $ 600,000 $ 1,050,000 $ 1,140,000 $ 780,000 $ 440,000
Credit sales $ 2,100,000 $ 1,400,000 $ 2,450,000 $ 2,660,000 $ 1,820,000 $ 1,760,000
Total sales revenue $ 3,000,000 $ 2,000,000 $ 3,500,000 $ 3,800,000 $ 2,600,000 $ 2,200,000

Sales tax (7%) $ 210,000 $ 140,000 $ 245,000 $ 266,000 $ 182,000 $ 154,000

 Scarpin Co
Sales
ar Ended December 31
Month
July August September October November December Total
27,000 25,500 22,000 19,000 15,000 16,500 296,000
$ 100 $ 105 $ 105 $ 105 $ 105 $ 105 $ 105
$ 2,700,000 $ 2,677,500 $ 2,310,000 $ 1,995,000 $ 1,575,000 $ 1,732,500 $ 31,080,000

20.00% 25.00% 25.00% 40.00% 40.00% 20.00%

80.00% 75.00% 75.00% 60.00% 60.00% 80.00%

$ 540,000 $ 669,375 $ 577,500 $ 798,000 $ 630,000 $ 346,500 $ 8,471,375

$ 2,160,000 $ 2,008,125 $ 1,732,500 $ 1,197,000 $ 945,000 $ 1,386,000 $ 21,618,625
$ 2,700,000 $ 2,677,500 $ 2,310,000 $ 1,995,000 $ 1,575,000 $ 1,732,500 $ 30,090,000

$ 189,000 $ 187,425 $ 161,700 $ 139,650 $ 110,250 $ 121,275 $ 2,106,300

 Scarpin Co
Production
For the Year Ended December 31
Month
January February March April May
Beginning inventory - 15,000 21,000 4,000 1,000
Plus: Purchase 45,000 26,000 18,000 35,000 30,000
Less: Unit sales 30,000 20,000 35,000 38,000 26,000
(=) Ending inventory 15,000 21,000 4,000 1,000 5,000

Purchase price $ 40 $ 40 $ 40 $ 40 $ 40
Total inventory purchase $ 1,800,000 $ 1,040,000 $ 720,000 $ 1,400,000 $ 1,200,000

Purchase payment $ - $ 1,800,000 $ 1,040,000 $ 720,000 $ 1,400,000

Average purchase price $ 40.67

 Scarpin Co
Production
For the Year Ended December 31
Month
June July August September October November December
5,000 16,000 15,000 14,500 16,500 24,500 35,500
33,000 26,000 25,000 24,000 27,000 26,000 6,000
22,000 27,000 25,500 22,000 19,000 15,000 16,500
16,000 15,000 14,500 16,500 24,500 35,500 25,000

$ 40 $ 40 $ 42 $ 42 $ 42 $ 42 $ 42
$ 1,320,000 $ 1,040,000 $ 1,050,000 $ 1,008,000 $ 1,134,000 $ 1,092,000 $ 252,000

$ 1,200,000 $ 1,320,000 $ 1,040,000 $ 1,050,000 $ 1,008,000 $ 1,134,000 $ 1,092,000

Total
-
321,000
296,000
25,000

$ 13,056,000

$ 12,804,000
 Scarpin Co
Operating Expenses
For the Year Ended December
M
January February March April
Number of cases to be sold 30,000 20,000 35,000 38,000
Variable Operating Expenses
Sales comission expenses (5% total sales) $ 150,000 $ 100,000 $ 175,000 $ 190,000
Shipping expense ($10.00 per case) $ 300,000 $ 200,000 $ 350,000 $ 380,000
Total variable Operating Expenses $ 450,000 $ 300,000 $ 525,000 $ 570,000

Fixed Operating Expenses

Salaries $ 80,000 $ 80,000 $ 80,000 $ 80,000
Insurance and property tax $ 6,000 $ 6,000 $ 6,000 $ 6,000
Utilities $ 1,500 $ 1,500 $ 1,500 $ 1,500
Office rent $ 8,000 $ 8,000 $ 8,000 $ 8,000
Depreciation $ 28,250 $ 28,250 $ 28,250 $ 28,250
Advertising $ 15,000 $ 15,000 $ 15,000 $ 15,000
Telephone and internet $ 12,000 $ 12,000 $ 12,000 $ 12,000
Total fixed Operating Expenses $ 150,750 $ 150,750 $ 150,750 $ 150,750

Total operating expenses $ 600,750 $ 450,750 $ 675,750 $ 720,750

 Scarpin Co
Operating Expenses
For the Year Ended December 31
Month
May June July August September October November December
26,000 22,000 27,000 25,500 22,000 19,000 15,000 16,500

$ 130,000 $ 110,000 $ 135,000 $ 133,875 $ 115,500 $ 99,750 $ 78,750 $ 86,625

$ 260,000 $ 220,000 $ 270,000 $ 255,000 $ 220,000 $ 190,000 $ 150,000 $ 165,000
$ 390,000 $ 330,000 $ 405,000 $ 388,875 $ 335,500 $ 289,750 $ 228,750 $ 251,625

$ 80,000 $ 80,000 $ 80,000 $ 80,000 $ 80,000 $ 80,000 $ 80,000 $ 80,000

$ 6,000 $ 6,000 $ 6,000 $ 6,000 $ 6,000 $ 6,000 $ 6,000 $ 6,000
$ 1,500 $ 1,500 $ 1,500 $ 1,500 $ 1,500 $ 1,500 $ 1,500 $ 1,500
$ 8,000 $ 8,000 $ 8,000 $ 8,000 $ 8,000 $ 8,000 $ 8,000 $ 8,000
$ 28,250 $ 28,250 $ 28,250 $ 28,250 $ 28,250 $ 28,250 $ 28,250 $ 28,250
$ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000
$ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000
$ 150,750 $ 150,750 $ 150,750 $ 150,750 $ 150,750 $ 150,750 $ 150,750 $ 150,750

$ 540,750 $ 480,750 $ 555,750 $ 539,625 $ 486,250 $ 440,500 $ 379,500 $ 402,375

Total
296,000

$ 4,440,000
$ 3,552,000
$ 7,992,000

$ 960,000
$ 72,000
$ 18,000
$ 96,000
$ 339,000
$ 180,000
$ 144,000
$ 1,809,000

$ 9,801,000

Beginning Balance January
Facilities $ - $ 3,000,000
Equipment $ - $ 1,200,000
Total new capital investments $ - $ 4,200,000
Scarpin Co
Capital Expenditures
For the Year Ended December 31
Month
February March April May June
$ - $ - $ - $ - $ -
$ - $ - $ - $ - $ -
$ - $ - $ - $ - $ -

Facilities
Useful life 20 years
Residual value $ 300,000
Depreciation (Month) $ 11,250

Equipment
Useful life 5 years
Residual value $ 180,000
Depreciation (Month) $ 17,000
n Co
enditures
d December 31
Month
July August September October November December Total
$ - $ - $ - $ - $ - $ - $ 3,000,000
$ - $ - $ - $ - $ - $ - $ 1,200,000
$ - $ - $ - $ - $ - $ - $ 4,200,000
 Scarpin Co
Cash Collections
For the Year Ended December 3
Month
January February March April May
Cash sales in current month $ 900,000 $ 600,000 $ 1,050,000 $ 1,140,000 $ 780,000
Collection on credit sales:
credit sales made one month ago $ 2,100,000 $ 1,400,000 $ 2,450,000 $ 2,660,000
Sales Cash Collections $ 900,000 $ 2,700,000 $ 2,450,000 $ 3,590,000 $ 3,440,000
 Scarpin Co
Cash Collections
r the Year Ended December 31
Month
June July August September October November December Total
$ 440,000 $ 540,000 $ 669,375 $ 577,500 $ 798,000 $ 630,000 $ 346,500 $ 8,471,375

$ 1,820,000 $ 1,760,000 $ 2,160,000 $ 2,008,125 $ 1,732,500 $ 1,197,000 $ 945,000 $ 20,232,625

$ 2,260,000 $ 2,300,000 $ 2,829,375 $ 2,585,625 $ 2,530,500 $ 1,827,000 $ 1,291,500 $ 28,704,000
 Scarpin Co
Cash Payme
For the Year Ended D

January February March April

Cash payments for sales tax $ - $ 210,000 $ 140,000 $ 245,000
Cash payments for purchases $ - $ 1,800,000 $ 1,040,000 $ 720,000
Cash payments for operating expenses $ 572,500 $ 422,500 $ 647,500 $ 692,500
Cash payments for capital investments $ 4,200,000 $ - $ - $ -
Cash payments for income tax $ - $ 242,266 $ 146,642 $ 286,658
Cash payments for dividends $ - $ - $ - $ -
Total cash payments $ 4,772,500 $ 2,674,766 $ 1,974,142 $ 1,944,158
 Scarpin Co
Cash Payments
For the Year Ended December 31
Month
May June July August September October November
$ 266,000 $ 182,000 $ 154,000 $ 189,000 $ 187,425 $ 161,700 $ 139,650
$ 1,400,000 $ 1,200,000 $ 1,320,000 $ 1,040,000 $ 1,050,000 $ 1,008,000 $ 1,134,000
$ 512,500 $ 452,500 $ 527,500 $ 511,375 $ 458,000 $ 412,250 $ 351,250
$ - $ - $ - $ - $ - $ - $ -
$ 315,821 $ 204,939 $ 167,612 $ 214,270 $ 228,323 $ 191,812 $ 160,516
$ - $ 250,000 $ - $ - $ - $ - $ -
$ 2,494,321 $ 2,289,439 $ 2,169,112 $ 1,954,645 $ 1,923,748 $ 1,773,762 $ 1,785,416
December Total
$ 110,250 $ 1,985,025
$ 1,092,000 $ 12,804,000
$ 374,125 $ 5,934,500
$ - $ 4,200,000
$ 118,789 $ 2,277,647
$ 250,000 $ 500,000
$ 1,945,164 $ 27,701,172
 Scarpin Co
Combined Cash
For the Year Ended Decem

January February March April

Beginning cash balance $ - $ 50,000 $ 50,000 $ 50,000
Plus: Owners' capital $ 3,000,000 $ - $ - $ -
Plus: Cash collections $ 900,000 $ 2,700,000 $ 2,450,000 $ 3,590,000
Total cash available $ 3,900,000 $ 2,750,000 $ 2,500,000 $ 3,640,000
Less: Cash payments $ 4,772,500 $ 2,674,766 $ 1,974,142 $ 1,944,158
Ending cash balance before financing $ (872,500) $ 75,234 $ 525,858 $ 1,695,842
Financing
Plus: New borrowings $ 922,500 $ 906,491 $ 439,697 $ -
Less: Debt repayments $ - $ 922,500 $ 906,491 $ 439,697
Less: Interest payments $ - $ 9,225 $ 9,065 $ 4,397
Ending cash balance $ 50,000 $ 50,000 $ 50,000 $ 1,251,747

Minimum cash balance $ 50,000

 Scarpin Co
Combined Cash
For the Year Ended December 31
Month
May June July August September October November
$ 1,251,747 $ 2,197,426 $ 2,167,988 $ 2,298,876 $ 3,173,606 $ 3,835,483 $ 4,592,221
$ - $ - $ - $ - $ - $ - $ -
$ 3,440,000 $ 2,260,000 $ 2,300,000 $ 2,829,375 $ 2,585,625 $ 2,530,500 $ 1,827,000
$ 4,691,747 $ 4,457,426 $ 4,467,988 $ 5,128,251 $ 5,759,231 $ 6,365,983 $ 6,419,221
$ 2,494,321 $ 2,289,439 $ 2,169,112 $ 1,954,645 $ 1,923,748 $ 1,773,762 $ 1,785,416
$ 2,197,426 $ 2,167,988 $ 2,298,876 $ 3,173,606 $ 3,835,483 $ 4,592,221 $ 4,633,805

$ - $ - $ - $ - $ - $ - $ -
$ - $ - $ - $ - $ - $ - $ -
$ - $ - $ - $ - $ - $ - $ -
$ 2,197,426 $ 2,167,988 $ 2,298,876 $ 3,173,606 $ 3,835,483 $ 4,592,221 $ 4,633,805
December Total
$ 4,633,805 $ -
$ - $ 3,000,000
$ 1,291,500 $ 28,704,000
$ 5,925,305 $ 31,704,000
$ 1,945,164 $ 27,701,172
$ 3,980,141 $ 4,002,828

$ - $ 2,268,688
$ - $ 2,268,688
$ - $ 22,687
$ 3,980,141 $ 3,980,141
 Scarpin Co
Income Statement
For the Year Ended December 31
Month
January February March April May June
Net Sales revenue $ 2,790,000 $ 1,860,000 $ 3,255,000 $ 3,534,000 $ 2,418,000 $ 2,046,000
Less: COGS $ 1,220,187 $ 813,458 $ 1,423,551 $ 1,545,570 $ 1,057,495 $ 894,804
Gross profit $ 1,569,813 $ 1,046,542 $ 1,831,449 $ 1,988,430 $ 1,360,505 $ 1,151,196
Less: Operating expenses $ 600,750 $ 450,750 $ 675,750 $ 720,750 $ 540,750 $ 480,750
Operating income $ 969,063 $ 595,792 $ 1,155,699 $ 1,267,680 $ 819,755 $ 670,446
Less: Interest expense $ - $ 9,225 $ 9,065 $ 4,397 $ - $ -
Pretax Income $ 969,063 $ 586,567 $ 1,146,634 $ 1,263,283 $ 819,755 $ 670,446
Income Tax (25%) $ 242,266 $ 146,642 $ 286,658 $ 315,821 $ 204,939 $ 167,612
Net Income $ 726,797 $ 439,925 $ 859,975 $ 947,462 $ 614,816 $ 502,835
Scarpin Co
me Statement
r Ended December 31
Month
July August September October November December Total
$ 2,511,000 $ 2,490,075 $ 2,148,300 $ 1,855,350 $ 1,464,750 $ 1,611,225 $ 27,983,700
$ 1,098,168 $ 1,037,159 $ 894,804 $ 772,785 $ 610,093 $ 671,103 $ 12,039,178
$ 1,412,832 $ 1,452,916 $ 1,253,496 $ 1,082,565 $ 854,657 $ 940,122 $ 15,944,522
$ 555,750 $ 539,625 $ 486,250 $ 440,500 $ 379,500 $ 402,375 $ 6,273,500
$ 857,082 $ 913,291 $ 767,246 $ 642,065 $ 475,157 $ 537,747 $ 9,671,022
$ - $ - $ - $ - $ - $ - $ 22,687
$ 857,082 $ 913,291 $ 767,246 $ 642,065 $ 475,157 $ 537,747 $ 9,648,336
$ 214,270 $ 228,323 $ 191,812 $ 160,516 $ 118,789 $ 134,437 $ 2,412,084
$ 642,811 $ 684,968 $ 575,435 $ 481,549 $ 356,367 $ 403,310 $ 7,236,252
 Scarp
Statement of Cash Fl
For the Year End

January February March April

Cash flow from operating activities
Sales Cash Collections $ 900,000 $ 2,700,000 $ 2,450,000 $ 3,590,000
Cash payments for sales tax $ - $ (210,000) $ (140,000) $ (245,000)
Cash payments for purchases $ - $ (1,800,000) $ (1,040,000) $ (720,000)
Cash payments for operating expenses $ (572,500) $ (422,500) $ (647,500) $ (692,500)
Cash payments for income tax $ - $ (242,266) $ (146,642) $ (286,658)
Interest payments $ - $ (9,225) $ (9,065) $ (4,397)
Cash provided by operating activities $ 327,500 $ 16,009 $ 466,793 $ 1,641,445

Cash flow from investing activities

Purchase of Facilities $ (3,000,000) $ - $ - $ -
Purchase of Equipment $ (1,200,000) $ - $ - $ -
Cash used in investing activities $ (4,200,000) $ - $ - $ -

Cash flow from financing activities

Investment from owners (Capital) $ 3,000,000 $ - $ - $ -
Issuance of Debts $ 922,500 $ 906,491 $ 439,697 $ -
Payments of Debts $ - $ (922,500) $ (906,491) $ (439,697)
Dividends $ - $ - $ - $ -
Cash provided by (used in) financing activities $ 3,922,500 $ (16,009) $ (466,793) $ (439,697)

Net increase (decrease) in cash $ 50,000 $ - $ - $ 1,201,747

Cash at the beginning of the month $ - $ 50,000 $ 50,000 $ 50,000
Cash at the endinng of the month $ 50,000 $ 50,000 $ 50,000 $ 1,251,747
 Scarpin Co
Statement of Cash Flows - Direct Method
For the Year Ended December 31
Month
May June July August September October November

$ 3,440,000 $ 2,260,000 $ 2,300,000 $ 2,829,375 $ 2,585,625 $ 2,530,500 $ 1,827,000

$ (266,000) $ (182,000) $ (154,000) $ (189,000) $ (187,425) $ (161,700) $ (139,650)
$ (1,400,000) $ (1,200,000) $ (1,320,000) $ (1,040,000) $ (1,050,000) $ (1,008,000) $ (1,134,000)
$ (512,500) $ (452,500) $ (527,500) $ (511,375) $ (458,000) $ (412,250) $ (351,250)
$ (315,821) $ (204,939) $ (167,612) $ (214,270) $ (228,323) $ (191,812) $ (160,516)
$ - $ - $ - $ - $ - $ - $ -
$ 945,679 $ 220,561 $ 130,888 $ 874,730 $ 661,877 $ 756,738 $ 41,584

$ - $ - $ - $ - $ - $ - $ -
$ - $ - $ - $ - $ - $ - $ -
$ - $ - $ - $ - $ - $ - $ -

$ - $ - $ - $ - $ - $ - $ -
$ - $ - $ - $ - $ - $ - $ -
$ - $ - $ - $ - $ - $ - $ -
$ - $ (250,000) $ - $ - $ - $ - $ -
$ - $ (250,000) $ - $ - $ - $ - $ -

$ 945,679 $ (29,439) $ 130,888 $ 874,730 $ 661,877 $ 756,738 $ 41,584

$ 1,251,747 $ 2,197,426 $ 2,167,988 $ 2,298,876 $ 3,173,606 $ 3,835,483 $ 4,592,221
$ 2,197,426 $ 2,167,988 $ 2,298,876 $ 3,173,606 $ 3,835,483 $ 4,592,221 $ 4,633,805
December Total

$ 1,291,500 $ 28,704,000
$ (110,250) $ (1,985,025)
$ (1,092,000) $ (12,804,000)
$ (374,125) $ (5,934,500)
$ (118,789) $ (2,277,647)
$ - $ (22,687)
$ (403,664) $ 5,680,141

$ - $ (3,000,000)
$ - $ (1,200,000)
$ - $ (4,200,000)

$ - $ 3,000,000
$ - $ 2,268,688
$ - $ (2,268,688)
$ (250,000) $ (500,000)
$ (250,000) $ 2,500,000

$ (653,664) $ 3,980,141
$ 4,633,805 $ -
$ 3,980,141 $ 3,980,141
 Scarpin Co
Balance Sheet
December, 31
Assets:
Cash $ 3,980,141
Accounts receivable $ 1,386,000
Inventory $ 1,016,822
Total current assets $ 6,382,963
Property, plant and equipment, net of accumulated depreciation $ 3,861,000
Total assets $ 10,243,963

Liabilities and Stockholders' Equity

Accounts payable $ 252,000
Sales tax payable $ 121,275
Income tax payable $ 134,437
Other current liabilities (line of credit) $ -
Total current liabilities $ 507,712
Owners's Capital $ 3,000,000
Retained Earnings $ 6,736,252
Total Stockholders equity $ 9,736,252
Total liabilities and stockholders' equity $ 10,243,963
 January February March
Revenue $ 2,790,000 $ 1,860,000 $ 3,255,000
Gross Profit $ 1,569,813 $ 1,046,542 $ 1,831,449
EBITDA $ 997,313 $ 624,042 $ 1,183,949
Net Income $ 726,797 $ 439,925 $ 859,975

Cash flow from operating activities $ 327,500 $ 16,009 $ 466,793

January February March

Gross Margin 56.27% 56.27% 56.27%
EBITDA Margin 35.75% 33.55% 36.37%
Net Income Margin 26.05% 23.65% 26.42%

Revenue and Incomes

$4000 000 70.00%
$3500 000 60.00%
$3000 000 50.00%
$2500 000 40.00%
$2000 000
30.00%
$1500 000
20.00%
$1000 000
$500 000 10.00%
$- 0.00%
ry ry h ril ay ne ly st r er r r ar
y
ar
y ch ril
ua ua a rc Ap M Ju Ju gu be ob be be nu ru ar Ap
n r M u em t m m a b M
Ja F eb A pt Oc ve ce J Fe
S e No De

Revenue Gross Profit EBITDA Net Income Gross Margin

Cash vs Income Cash flow from operating activities

Cash flow from operating activities $ 5,680,141 Sales Cash Collections
Net Income $ 7,236,252 Cash payments for sales tax
Difference $ (1,556,111) Cash payments for purchases
Where is the money? Cash payments for operating expen
Non cash expense (depreciation) $ 339,000 Interest payments
Adjusted Net Income $ 7,575,252 Cash payments for income tax
Adjusted difference $ (1,895,111) Cash provided by op. activities
Now it is worse, where is the money?
Accounts receivable $ (1,386,000)
Inventory $ (1,016,822)
Accounts payable $ 252,000
Sales tax payable $ 121,275
Income tax payable $ 134,437
Total $ (1,895,111)
 April May June July August September
$ 3,534,000 $ 2,418,000 $ 2,046,000 $ 2,511,000 $ 2,490,075 $ 2,148,300
$ 1,988,430 $ 1,360,505 $ 1,151,196 $ 1,412,832 $ 1,452,916 $ 1,253,496
$ 1,295,930 $ 848,005 $ 698,696 $ 885,332 $ 941,541 $ 795,496
$ 947,462 $ 614,816 $ 502,835 $ 642,811 $ 684,968 $ 575,435

$ 1,641,445 $ 945,679 $ 220,561 $ 130,888 $ 874,730 $ 661,877

April May June July August September

56.27% 56.27% 56.27% 56.27% 58.35% 58.35%
36.67% 35.07% 34.15% 35.26% 37.81% 37.03%
26.81% 25.43% 24.58% 25.60% 27.51% 26.79%

Margins
70.00%
$2000 000
60.00%
50.00% $1500 000
40.00%
$1000 000
30.00%
20.00% $500 000
10.00%
$-
0.00% y y ch
ar ar ar
ar
y
ar
y ch ril ay ne Ju
ly st be
r er be
r
be
r
nu ru
nu ru ar Ap M Ju ugu m tob m m J a
$(500 000)
Fe
b M
a b M A e Oc ve ce
J Fe pt De
Se No
$(1000 000)

Gross Margin EBITDA Margin Net Income Margin Net Inco

Cash flow from operating activities

Cash Collections $ 28,704,000
payments for sales tax $ (1,985,025)
payments for purchases $ (12,804,000)
payments for operating expen $ (5,934,500)
st payments $ (22,687)
payments for income tax $ (2,277,647)
provided by op. activities $ 5,680,141
 October November December Total
$ 1,855,350 $ 1,464,750 $ 1,611,225 $ 31,080,000
$ 1,082,565 $ 854,657 $ 940,122 $ 15,944,522
$ 670,315 $ 503,407 $ 565,997 $ 9,332,022
$ 481,549 $ 356,367 $ 403,310 $ 7,236,252

$ 756,738 $ 41,584 $ (403,664) $ 5,680,141

October November December Total

58.35% 58.35% 58.35% 51.30%
36.13% 34.37% 35.13% 30.03%
25.95% 24.33% 25.03% 23.28%

Cash vs Income
$2000 000

$1500 000

$1000 000

$500 000

$-
ar
y
ar
y ch ril ay ne Ju
ly st be
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be
r
nu ru ar Ap M Ju gu ob m
a
$(500 000) b M A u em Oc
t
ve
m
ce
J Fe pt
Se No De
$(1000 000)

Net Income Cash flow from operating activities