EXHIBIT - 1
INCOME STATEMENTS1993 % 1994 % 1995 % 1996-Q1 %
$2,921.00 19.0% $3,477.00 30.0% $4,519.00 $1,062.00
Beginning inventory $330.00 $337.00 $432.00 $587.00Purchases $2,209.00 75.6% $2,729.00 78.5% $3,579.00 79.2% $819.00 77.1%Total Inventory $2,539.00 $3,066.00 $4,011.00 $1,406.00Ending inventory $337.00 $432.00 $587.00 $607.00
$2,202.00 75.4% $2,634.00 75.8% $3,424.00 75.8% $799.00 75.2%$719.00 24.6% $843.00 24.2% $1,095.00 24.2% $263.00 24.8%
Operating expenses $547.00 18.7% $637.00 18.3% $855.00 18.9% $221.50 20.9%Salary Expenses $75.00 $80.00 $85.00 $22.50Earnings before interest and taxes $97.00 $126.00 $155.00 $19.00
$23.00 $42.00 $56.00 $13.00$74.00 $84.00 $99.00 $6.00
Provision for income taxes $14.00 $16.00 $22.00 $1.00$60.00 2.1% $68.00 2.0% $77.00 1.7% $5.00 0.5%
Net sales
Cost of Goods Sold:
Total Cost of Goods Sold
Gross profit
Interest expense
Net income before income taxes
Net income
EXHIBIT - 2
BALANCE SHEETS
1993 % Sales 1994 % Sales 1995 % Sales 1996 % Sales
$43.00 1.47% $52.00 1.50% $56.00 1.24% $53.00 4.99%$306.00 10.48% $411.00 11.82% $606.00 13.41% $583.00 54.90% E$337.00 11.54% $432.00 12.42% $587.00 12.99% $607.00 57.16%$686.00 $895.00 $1,249.00 $1,243.00$233.00 7.98% $262.00 7.54% $388.00 8.59% $384.00 36.16%$919.00 31.46% $1,157.00 33.28% $1,637.00 36.22% $1,627.00 153.20%
$0.00 $60.00 $390.00 $399.00Note payable to Holtz, (C/P) $0.00 $100.00 $100.00 $100.00Notes payable, trade $0.00 $0.00 $127.00 $123.00
$213.00 $340.00 $376.00 $364.00$42.00 1.44% $45.00 1.29% $75.00 1.66% $67.00 1.48%
Term loan, current portion $20.00 $20.00 $20.00 $20.00$275.00 29.92% $565.00 48.83% $1,088.00 66.46% $1,073.00 65.95%
Term loan $140.0015.23%
$120.0019.01%
$100.006.11%
$100.006.15%
Note payable, Mr. Holtz $0.00 $100.00 $0.00 $0.00$415.00 $785.00 $1,188.00 $1,173.00$504.00 54.84% $372.00 32.15% $449.00 27.43% $454.00 27.90%
Total Liabilities + Net Worth $919.00 $1,157.00 $1,637.00 $1,627.00
Return on Sales (Profit %) 2.1% 2.0% 1.7% 0.5%Return on Assets 6.5% 5.9% 4.7% 0.3%Return on Equity 11.9% 18.3% 17.1% 1.1%
Profit Margin 2.1% 2.0% 1.7% 0.5%Asset Turnover 3.2 3.0 2.8 0.7Equity Multiplier 1.8 3.1 3.6 3.6
% Assets
% Assets
% Assets
% Assets
Cash
Accounts receivable, net
Inventory
Current assets
Property, net
Total Assets
Notes payable, bank
Accounts payable
Accrued expenses
Current liabilities
Total Liabilities
Net worth
EXHIBIT - 3
CASH FLOW STATEMENTS1994 1995 1996-Q1
Net Income $68.00 $77.00 $5.00
Cash Flow in Operating Activities
Change in A/C Receivables N.A -$105.00 -$195.00 $23.00Change in Inventory N.A -$95.00 -$155.00 -$20.00Change in Notes Payable, trade N.A $0.00 $127.00 -$4.00Change in A/C Payables N.A $127.00 $36.00 -$12.00Change in Accrued Expenses N.A $3.00 $30.00 -$8.00TOTAL N.A -$70.00 -$157.00 -$21.00
Cash Flow in Investing Activities
Change in PPE N.A -$29.00 -$126.00 $4.00TOTAL N.A -$29.00 -$126.00 $4.00
Cash Flow in Financing Activities
Change in Notes Payable Bank N.A $60.00 $330.00 $9.00Change in Notes Payable Holtz (Current Portion) N.A $100.00 $0.00 $0.00Change in Term Loan (Current Portion) N.A $0.00 $0.00 $0.00Change in Long Term Loan N.A -$20.00 -$20.00 $0.00Change in Note Payable, Holtz (Long term) N.A $100.00 -$100.00 $0.00Equity Buyout N.A -$200.00 $0.00 $0.00TOTAL N.A $40.00 $210.00 $9.00
Net Cash Flow N.A $9.00 $4.00 -$3.00Opening Cash Balance N.A $43.00 $52.00 $56.00Closing Cash Balance N.A $52.00 $56.00 $53.00
DISCOOUNTING AND CASH BALANCESOpening Cash Balance (from closing of year 9x) N.A $52.00 -$2.58 -$74.16Discounts Available on Purchase @ 2 % $44.18 $54.58 $71.58 $16.38Closing Cash Balance (if discount is availed) N.A -$2.58 -$74.16 -$90.54
(*) 1993 Cash Flow not possible because data not given for 1992
1993 *
EXHIBIT - 4
COMPARISON WITH INDUSTRIAL AVERAGESIndustrial Preview Clarkson Lumber Co.
Low Profit High Profit 1993 1994 1995 Performance Comments (on Current-1995)Percent of Total Sales
76.90% 75.10% 75.4% 75.8% 75.8% N.A In between lower and higher profit outlets22.00% 20.60% 18.7% 18.3% 18.9% N.A Better than high profit outlets1.30% 1.10% 1.5% 1.5% 1.2% N.A Worse than lower profit outlets
13.70% 12.40% 10.5% 11.8% 13.4% N.A In between lower and higher profit outlets12.00% 11.60% 11.5% 12.4% 13.0% N.A Worse than lower profit outlets12.10% 9.20% 8.0% 7.5% 8.6% N.A In between lower and higher profit outlets39.10% 34.30% 31.5% 33.3% 36.2% N.A In between lower and higher profit outlets
Percent of Total Assets52.70% 29.20% 29.9% 48.8% 66.5% N.A Worse than lower profit outlets34.80% 16.00% 15.2% 19.0% 6.1% N.A Better than high profit outlets12.50% 54.80% 54.8% 32.2% 27.4% N.A In between lower and higher profit outlets
Ratios1.31 2.52 2.5 1.6 1.1 N.A In between lower and higher profit outlets
2.1% 2.0% 1.7% N.A In between lower and higher profit outlets6.5% 5.9% 4.7% N.A In between lower and higher profit outlets
11.9% 18.3% 17.1% N.A In between lower and higher profit outlets
Other RatiosAcid Test Ratio 1.3 0.8 0.6 N.AInventory T/O Days 41.5 44.7 46.8 N.ADays Sales Outstanding 37.7 42.6 48.3 N.APayable Deferred Period 34.7 44.9 37.8 N.ACash Conversion Cycle 44.5 42.4 57.2 N.A
(*) 1996 Full Year Data not available so it is not added here.
Inventory T/O Days = Inventory*360/COGSDSO = A/C Rec*360/Sales
Inventory T/O Days = A/C Payable*360/Purchases
1996*
Cost of goods
Operating expense
Cash
Accounts receivable
Inventory
Fixed assets, net
Total Assets
Current liabilities
Long-term liabilities
Equity
Current ratio
Return on sales (0.7%) 4.3%Return on assets (1.8%) 12.2%Return on equity (14.3%) 22.1%
BAR CHARTS FOR EXHIBIT -4
EXHIBIT - 5
PROFORMA INCOME STATEMENT -19961993 % 1994 % 1995 % Average 1996
$2,921.00 19.03% $3,477.00 29.97% $4,519.00 21.71% $5,500.00
Beginning inventory $330.00 $337.00 $432.00 $587.00Purchases $2,209.00 75.6% $2,729.00 78.5% $3,579.00 79.2% 77.8% $4,277.37 77.8%Total Inventory $2,539.00 $3,066.00 $4,011.00 $4,864.37Ending inventory $337.00 $432.00 $587.00 $704.37
$2,202.00 75.4% $2,634.00 75.8% $3,424.00 75.8% 75.6% $4,160.00 75.6%$0.00 $0.00 $0.00 $85.55
$719.00 24.6% $843.00 24.2% $1,095.00 24.2% 24.4% $1,425.55 24.4%Operating expenses $547.00 18.7% $637.00 18.3% $855.00 18.9% 18.7% $1,026.06 18.7%Salary Expenses $75.00 $80.00 $85.00 $90.00Earnings before interest and taxes $97.00 $126.00 $155.00 $309.49
$23.00 $42.00 $56.00 $110.49$74.00 $84.00 $99.00 $199.00
Provision for income taxes (Note -2) $14.00 $16.00 $22.00 $60.86$60.00 2.1% $68.00 2.0% $77.00 1.7% 1.9% $138.14 2.5%
ASSUMPTIONS FOR INCOME STATEMENTS
Net sales
Cost of Goods Sold:
Total Cost of Goods Sold
Disconuts added back @ 2% (3)
Gross profit
Interest expense (Note -1)
Net income before income taxes
Net income
1. Many Items like Purchases, Gross Profit and Operating Expenses are varying on a very small scale w.r.t sales therefore the avegare of 3 back years are taken to minimize these differences. In our studies only last year is taken as a reference but since 3 years data is given, so I made use of all the data.2. For the Interest Expenses and Taxes, please see NOTE-1 and Note-2 respectively.3. Discounts are not subtracted from the purchase directly because the COGS %(average) is getting changed. For simplicity the discount is added back in the Gross profit instead which will have the similar impact.4. Discounts are taken only after the 1st quarter of 1996, so a 2% Discount for 1st Qtr is subtracted from the 1996 year (can be seen in the formula bar as well).5. Salary Expenses of Mr. Clarkson is a fixed amount therefore seperated from the Variable Operating exp. This step brought the operating %ages to sales even closer than before.
EXHIBIT - 6
PROFORMA BALANCE SHEET - 19961993 % Sales 1994 % Sales 1995 % Sales Average 1996 % Sales
$43.00 1.47% $52.00 1.50% $56.00 1.24% 1.4% $77.13 1.40%$306.00 10.48% $411.00 11.82% $606.00 13.41% 11.9% $654.62 11.90%$337.00 11.54% $432.00 12.42% $587.00 12.99% $704.37 12.81%$686.00 $895.00 $1,249.00 $1,436.11$233.00 7.98% $262.00 7.54% $388.00 8.59% 8.0% $441.80 8.03%$919.00 31.46% $1,157.00 33.28% $1,637.00 36.22% 33.7% $1,850.98 33.65%
$0.00 $60.00 $390.00 $966.89Note payable to Holtz, current portion $0.00 $100.00 $100.00 $0.00
$0.00 $0.00 $127.00 $0.00$213.00 $340.00 $376.00 $116.44$42.00 1.44% $45.00 1.29% $75.00 1.66% 1.5% $80.52 1.46%
Term loan, current portion $20.00 $20.00 $20.00 $20.00$275.00 $565.00 $1,088.00 $1,183.84
Term loan $140.00 $120.00 $100.00 $80.00$0.00 $100.00 $0.00 $0.00
$415.00 $785.00 $1,188.00 $1,263.84$504.00 $372.00 $449.00 $587.14$919.00 $1,157.00 $1,637.00 $1,850.98
AFN $0.00
ASSUMPTIONS FOR BALANCE SHEET
PROFORMA CASH CONVERSION CYCLE -1996 COMMENTSInventory Days 61.0 The company needs to reduce its inventory days or inventory level.DSO 42.8 Better than last year.PDP 10.0 10 Days, so taking in all discountsCash Conversion Cycle 93.8 (1) Major: Inventory Days or Invenotry Level of Stock (2) Improve DSO
Cash
Accounts receivable, net
Inventory
Current assets
Property, net
Total Assets
Notes payable, bank
Notes payable, trade
Accounts payable
Accrued expenses
Current liabilities
Note payable, Mr. Holtz
Total Liabilities
Net worth
Total Liabilities + Net Worth
1. Spontaneous Liabilites are increased as a percentage of sales so do the current assets. Here we can see in past three years that their relevant %ages w.r.t sales are approximately the same. So averaging of all %ages are taken out and it is then multiplied to the forecates $ 5500 sales to get the forecasted current assets and liabilities.2. It is assumed that after availing the O/D - Running finance facilities the company will not be left with any notes payable to trade at all.3. It is also assumed here that expenses do increased as a result of increased sales and that’s why the step # 01 calculation is done with it.4. Since the company is taking all the discounts (2/10 net 30), so at the year end company will only be left with 10 days worth of average payables which is equal to Purchases* (10/360).
NOTE -1 - Interest Expenses Period (mon) AFN Amt Paid Interest % Amount9 $966.89 $0.00 11% $79.773 $0.00 $399.00 11% $10.97
6+6 $0.00 $10+$10 10% $11.506+6 $0.00 $50+$50 11% $8.25
Total Interest Expense for 1996 $110.49
NOTE -2 - Tax Expenses Tax % Amount AmountUpto 50 15% $50.00 $7.5Above 50 and upto 75 25% $25.00 $6.3Above 75 and upto 100 34% $25.00 $8.5Above 100 to 339 39% $99.0 $38.6
Total Tax Expense for 1996 $199.00 $60.86
ASSUMPTIONS FOR NOTE-1
Northrup National Bank (2)
Suburban National Bank (1)
Term Loan (3)
Holtz Equity Payment (4)
1. Since the Interest Rates for Suburban National Bank are not given so we assumed it to 11%. Moreover there is one more assumption that the Suburban Bank Runnung Credit is used for 3 months in 1996 (Jan to March).2. As mentioned in the case for first year i.e 1996 the interest %age ill be 11%. Here we assumed that after 1st quarter the company took the loan from Northrup National Bank.3. Term loan: Opening = $120 (for first 6 months) and $110 (for last 6 months). By 31st Dec 1996 the closing will be $100 (with $80 as long term and $20 as Current portion of long term).4. Holtz opening balance = $100 (for first 6 months) and $50 (for last six months) and by 31st Dec, 1996 this $50 will be paid to Holtz. The closing balance will be $0.5. For simplicity the case of simple/normal interest is used for computing interest percentages.6. The formula line should be checked for detailed information about calculation.
EXHIBIT - 7
PROFORMA INCOME STATEMENT 1996- QUARTERLY1996 - 1st Qtr 1996 - 2nd Qtr 1996 - 3rd Qtr 1996 - 4th Qtr
Particulars Amounts % Sales Amounts % Sales Amounts % Sales Amounts % Sales
$1,062.00 42.42% $1,512.50 0.00% $1,512.50 -6.58% $1,413.00
$587.00 $607.00 $635.48 $663.97$819.00 77.12% $1,166.42 77.12% $1,166.42 77.12% $1,089.69 77.12%
$1,406.00 $1,773.42 $1,801.90 $1,753.65$607.00 $635.48 $663.97 $690.58$799.00 75.24% $1,137.94 75.24% $1,137.94 75.24% $1,063.08 75.24%
Add: Disounts @ 2% of purchases $0.00 $23.33 $23.33 $21.79$263.00 $397.89 $397.89 $371.72$221.50 20.86% $282.17 18.66% $282.17 18.66% $263.60 18.66%
Salary Expenses $22.50 $22.50 $22.50 $22.50$19.00 $93.23 $93.23 $85.61$13.00 $38.42 $36.80 $36.54$6.00 $6.00 $54.80 $60.80 $56.43 $117.23 $49.07 $166.30
Provision for income taxes $1.00 $9.30 $18.77 $19.14$5.00 $45.50 $37.66 $29.93
ASSUMPTIONS FOR INCOME STATEMENT - QUARTERLY FORECAST
Net sales (1)
Cost of Goods Sold:
Beginning inventory
Purchases
Ending inventory
Total Cost of Goods Sold
Gross profit
Operating expenses (5 & Note-3)
Earnings before interest and taxes
Interest expense
Net income before income taxes
Net income
1. As mentioned in the case that Q2 & Q3 comprises of 50% of the total year sales thats why the sales distribution are made on the following basis. Q2 Sales = Q3 Sales = 5,500 * 0.5 / 2 = $ 1512.5 Q4 Sales = 5,500 - Q1 Sales - Q2 Sales - Q3 Sales = $ 1413.0 2. All the items in income statement are carried from the Q1 1996 except the operating expenses.3. For the Interest Expenses and Taxes, please see NOTE-4 and Note-5 respectively.4. Salary Expenses of Mr. Clarkson is a fixed amount therefore seperated from the Variable Operating exp. This step will help us compute the operating cost only on variable expenses. Salary per quarter = 90/4 = $ 22.5.5. The operating expenses for this organisation is a variable cost (since the salary of Mr. Clarkson is already subtracted) and it is assumed that it is the function of inventory stock and inventory turnover days. As seen in Note-3 the invenotry days in Q1 is 68 days far more than any other period before, that is why the operating costs were very high in this quarter. Later in Q2, Q3 & Q4 it has gone back to the regular level (even lower). For this we used the average operating cost (as %age of sales) to forecast the subsequent quarters.6. Discounts are taken only after the 1st quarter of 1996, and to make the calculations simple it is added back to COGS when computing the gross profit. In this way we can make the COGS (%age to sales) easier to compute.
EXHIBIT - 8
PROFORMA BALANCE SHEET 1996- QUARTERLY$53.00 142% $75.48 100.0% $75.48 93.4% $70.52
$583.00 142% $830.31 100.0% $830.31 93.4% $775.69$607.00 $635.48 $663.97 $690.58
$1,243.00 $1,541.27 $1,569.76 $1,536.78$384.00 142% $546.89 100.0% $546.89 93.4% $510.92
$1,627.00 $2,088.17 $2,116.65 $2,047.70Notes payable, banks $399.00 $1,206.23 $1,197.06 $1,172.80Note payable to Holtz, current portion $100.00 $50.00 $50.00 $0.00
$123.00 $0.00 $0.00 $0.00$364.00 $127.01 $127.01 $118.65$67.00 142% $95.42 100.0% $95.42 93.4% $89.14
Term loan, current portion $20.00 $20.00 $20.00 $20.00$1,073.00 $1,498.66 $1,489.49 $1,400.60
Term loan $100.00 $90.00 $90.00 $80.00$0.00 $0.00 $0.00 $0.00
$1,173.00 $1,588.66 $1,579.49 $1,480.60$454.00 $499.50 $537.16 $567.10
$1,627.00 $2,088.17 $2,116.65 $2,047.69AFN $0.00 $0.00 $0.00 $0.00
ASSUMPTIONS FOR BALANCE SHEET - QUARTERLY FORECAST
NOTE -3: Operating Expenses as a function of Inventory DaysInventory Days 68.4 50.3 52.5 58.5DSO 49.4 49.4 49.4 49.4PDP 40.0 10.0 10.0 10.0
Cash
Accounts receivable, net
Inventory
Current assets
Property, net
Total Assets
Notes payable, trade
Accounts payable
Accrued expenses
Current liabilities
Note payable, Mr. Holtz
Total Liabilities
Net worth
Total Liabilities + OE
1. Spontaneous Liabilites are increased as a percentage of sales so do the current assets. Here we have used the amount in the previous quarter and mulitplied it by the increase in sales (in % age). This step will relate the change in spontaneous liabilities and current assets to change in sales in quarters.2. As seen clearly above that the company requires external additional financing far more than $ 400 (from Suburban National Bank), so the company will pay this off after 1st quarter and will look upto Northrup Bank for this excess financing requirements.3. It is also assumed here that expenses do increased as a result of increased sales and that’s why the step # 01 calculation is done with it.4. Since the company is taking all the discounts (2/10 net 30), so at the year end company will only be left with 10 days worth of average payables which is equal to Purchases* (10/360).5. All the loan payments are made in the quarters required and so as the interest calculated is based on quarters (NOTE - 4).
Cash Conversion Cycle 77.8 89.7 91.9 97.9
NOTE -4: Interest ExpensesQuarters Q1 -1996 Q2 -1996 Q3-1996 Q4 -1996
Liability Northrup National BankInterest Rates 11%Opening Balance $0.00 $0.00 $1,206.23 $1,197.06Loan Taken $0.00 $1,206.23 -$9.17 -$24.26Payments $0.00 $0.00 $0.00 $0.00Closing Balance $0.00 $1,206.23 $1,197.06 $1,172.80Interest Expenses $33.17 $33.17 $32.92
Liability Holt'zInterest Rates 11%Opening Balance $100.00 $100.00 $50.00 $50.00Loan Taken $0.00 $0.00 $0.00 $0.00Payments $0.00 $50.00 $0.00 $50.00Closing Balance $100.00 $50.00 $50.00 $0.00Interest Expenses $2.75 $1.38 $1.38
Liability Term LoanInterest Rates 10%Opening Balance $100.00 $100.00 $90.00 $90.00Loan Taken $0.00 $0.00 $0.00 $0.00Payments $0.00 $10.00 $0.00 $10.00Closing Balance $100.00 $90.00 $90.00 $80.00Interest Expenses $0.00 $2.50 $2.25 $2.25
Grand Total N.A $38.42 $36.80 $36.54
ASSUMPTIONS FOR NOTE-4
NOTE-5: Tax Expenses Tax % 96-Q1 96-Q2 96-Q3 96-Q4Upto $ 50 15% $6.00 $0.90 $44.00 $6.60 $0.00 $0.00 $0.00 $0.00Above $ 50 upto $ 75 25% $0.00 $0.00 $10.80 $2.70 $14.20 $3.55 $0.00 $0.00Above $ 75 upto $ 100 34% $0.00 $0.00 $0.00 $0.00 $25.00 $8.50 $0.00 $0.00
1. Since the company has to get the AFN from Northrup Bank therefore the loan or AFN is not considered from the Suburban National Bank.2. Interest expenses for Q1-1996 is not calculated here because it is already given in the case.3. As mentioned in the case for first year i.e 1996 the interest %age will be 11%. Here we assumed that after 1st quarter the company took the loan from Northrup National Bank.4. Term loan: Opening = $120 (for first 6 months) and $110 (for last 6 months). By 31st Dec 1996 the closing will be $100 (with $80 as long term and $20 as Current portion of long term).5. Holtz opening balance = $100 (for first 6 months) and $50 (for last six months) and by 31st Dec, 1996 this $50 will be paid to Holtz. The closing balance will be $0.6. For simplicity the case of simple/normal interest is used for computing interest percentages.7. Loans/Running Finance (from bank) are taken on the 1st day of quarter and is repaid on the last day of quarter.8. The formula line should be checked for detailed information about calculation.
Above $ 100 upto $ 339 39% $0.00 $0.00 $0.00 $0.00 $17.23 $6.72 $49.07 $19.14Total - $6.00 $0.90 $54.80 $9.30 $56.43 $18.77 $49.07 $19.14Grand Total (Net Income) $6.00 $60.80 $117.23 $166.30
EXHIBIT -9PROFORMA INCOME STATEMENT 1996 -
Method (a) -Yearly Method (b) - Qtrly CombinedParticulars Amounts % Sales Prev Aver 93-95 Amounts % Sales Prev Aver 93-95
$5,500.00 $5,500.00
$587.00 $2,493.45$4,277.37 77.77% 77.8% $4,241.53 77.12% 77.8%$4,864.37 $6,734.98$704.37 $2,597.03
$4,160.00 75.64% 75.6% $4,137.95 75.24% 75.6%Add: Disounts @ 2% of purchases $85.55 $68.45
$1,425.55 $1,430.50Operating expenses $1,026.06 18.66% 18.7% $1,049.44 19.08% 18.7%Salary $90.00 $90.00
$309.49 $291.07$110.49 $124.76$199.00 $166.30
Provision for income taxes $60.86 $48.21$138.14 2.51% 1.9% $118.10 2.15% 1.9%
Net sales
Cost of Goods Sold:
Beginning inventory
Purchases
Ending inventory
Total Cost of Goods Sold
Gross profit
Earnings before interest and taxes
Interest expense
Net income before income taxes
Net income
EXHIBIT - 10PROFORMA BALANCE SHEET 1996
Method (a) -Yearly Method (b) - Year EndParticulars Amounts % Sales Prev Aver 93-95 Amounts % Sales Prev Aver 93-95
$77.13 1.40% 1.40% $70.52 1.3% 1.40%$654.62 11.90% 11.90% $775.69 14.1% 11.90%$704.37 12.81% 12.81% $690.58 12.6% 12.81%
$1,436.11 $1,536.78$441.80 8.03% 8.03% $510.92 9.3% 8.03%
$1,850.98 33.65% 33.65% $2,047.70 37.2% 33.65%$966.89 $1,172.80
Note payable to Holtz, current portion $0.00 $0.00$0.00 $0.00
$116.44 $118.65$80.52 1.46% 1.46% $89.14 1.6% 1.46%
Term loan, current portion $20.00 $20.00$1,183.84 $1,400.60
Term loan $80.00 $80.00$0.00 $0.00
$1,263.84 $1,480.60$587.14 $567.10
$1,850.98 $2,047.69
Year -1996 (Northrup National Bank) AFN Taken Paid Ending BalanceQ1 N.A N.A N.A N.AQ2 $1,206.23 $1,206.23 $0.00 $1,206.23 Q3 $1,197.06 $0.00 $9.17 $1,197.06 Q4 $1,172.80 $0.00 $24.26 $1,172.80
Cash
Accounts receivable, net
Inventory
Current assets
Property, net
Total Assets
Notes payable, bank
Notes payable, trade
Accounts payable
Accrued expenses
Current liabilities
Note payable, Mr. Holtz
Total Liabilities
Net worth
Total Liabilities + Net Worth
EXHIBIT - 11
COMPARISON WITH INDUSTRIAL AVERAGESIndustrial Preview Clarkson Lumber Co.
Low Profit High Profit 1993 1994 1995 1996 (b)Percent of Total Sales
76.90% 75.10% 75.4% 75.8% 75.8% 75.24%22.00% 20.60% 18.7% 18.3% 18.9% 19.08%1.30% 1.10% 1.5% 1.5% 1.2% 1.28%
13.70% 12.40% 10.5% 11.8% 13.4% 14.10%12.00% 11.60% 11.5% 12.4% 13.0% 12.56%12.10% 9.20% 8.0% 7.5% 8.6% 9.29%39.10% 34.30% 31.5% 33.3% 36.2% 37.23%
Percent of Total Assets52.70% 29.20% 29.9% 48.8% 66.5% 68.40%34.80% 16.00% 15.2% 19.0% 6.1% 3.91%12.50% 54.80% 54.8% 32.2% 27.4% 27.69%
Ratios1.31 2.52 2.5 1.6 1.1 1.10
2.1% 2.0% 1.7% 2.15%6.5% 5.9% 4.7% 5.77%
11.9% 18.3% 17.1% 20.82%
Other RatiosAcid Test Ratio 1.3 0.8 0.6 0.60Inventory T/O Days 41.5 44.7 46.8 58.5Days Sales Outstanding 37.7 42.6 48.3 49.4Payable Deferred Period 34.7 44.9 37.8 10.0Cash Conversion Cycle 44.5 42.4 57.2 97.9
Cost of goodsOperating expenseCashAccounts receivableInventoryFixed assets, netTotal Assets
Current liabilitiesLong-term liabilitiesEquity
Current ratioReturn on sales (0.7%) 4.3%Return on assets (1.8%) 12.2%Return on equity (14.3%) 22.1%