Hardware Store: Oshkosh Hardware, Inc.

views updated

Hardware Store

FICTIONAL BUSINESS PLAN

OSHKOSH HARDWARE, INC


123 Main St.
Oshkosh, WI 54901

June 1994


The following plan outlines how a small hardware store can survive competition from large discount chains by offering products and providing expert advice in the use of any product it sells. This plan is fictional and has not used to gain funding from a bank or other lending institution.


  • executive summary
  • the business
  • the market
  • sales
  • management
  • goals implementation
  • finance
  • job description-general manager
  • quarterly forecasted balance sheets
  • quarterly forecasted statements of earnings and retained earnings
  • quarterly forecasted statements of changes in financial position
  • financial ratio analysis
  • details for quarterly statements of earnings

EXECUTIVE SUMMARY

Oshkosh Hardware, Inc. is a new corporation which is going to establish a retail hardware store in a strip mall in Oshkosh, Wisconsin. The store will sell hardware of all kinds, quality tools, paint and housewares. The business will make revenue and a profit by servicing its customers not only with needed hardware but also with expert advice in the use of any product it sells.

Oshkosh Hardware, Inc. will be operated by its sole shareholder, James Smith. The company will have a total of four employees. It will sell its products in the local market. Customers will buy our products because we will provide free advice on the use of all of our products and will also furnish a full refund warranty.

Oshkosh Hardware, Inc. will sell its products in the Oshkosh store staffed by three sales representatives. No additional employees will be needed to achieve its short and long range goals. The primary short range goal is to open the store by October 1, 1994. In order to achieve this goal a lease must be signed by July 1, 1994 and the complete inventory ordered by August 1, 1994.

Mr. James Smith will invest $30,000 in the business. In addition the company will have to borrow $150,000 during the first year to cover the investment in inventory, accounts receivable, and furniture and equipment. The company will be profitable after six months of operation and should be able to start repayment of the loan in the second year.

THE BUSINESS

The business will sell hardware of all kinds, quality tools, paint, and housewares. We will purchase our products from three large wholesale buying groups.

In general our customers are homeowners who do their own repair and maintenance, hobbyists, and housewives. Our business is unique in that we will have a complete line of all hardware items and will be able to get special orders by overnight delivery. The business makes revenue and profits by servicing our customers not only with needed hardware but also with expert advice in the use of any product we sell. Our major costs for bringing our products to market are cost of merchandise of 36%, salaries of $45,000, and occupancy costs of $60,000.

Oshkosh Hardware, Inc.'s retail outlet will be located at 1524 Frontage Road, which is in a newly developed retail center of Oshkosh. Our location helps facilitate accessibility from all parts of town and reduces our delivery costs. The store will occupy 7500 square feet of space. The major equipment involved in our business is counters and shelving, a computer, a paint mixing machine, and a truck.

THE MARKET

Oshkosh Hardware, Inc. will operate in the local market. There are 15,000 potential customers in this market area. We have three competitors who control approximately 98% of the market at present. We feel we can capture 25% of the market within the next four years. Our major reason for believing this is that our staff is technically competent to advise our customers in the correct use of all products we sell.

After a careful market analysis we have determined that approximately 60% of our customers are men and 40% are women. The percentage of customers that fall into the following age categories are:

Under 16-0%
17-21-5%
22-30-30%
31-40-30%
41-50-20%
51-60-10%
61-70-5%
Over 70-0%

The reasons our customers prefer our products is our complete knowledge of their use and our full refund warranty.

We get our information about what products our customers want by talking to existing customers. There seems to be an increasing demand for our product. The demand for our product is increasing in size based on the change in population characteristics.

SALES

At Oshkosh Hardware, Inc. we will employ 3 sales people and will not need any additional personnel to achieve our sales goals. These salespeople will need several years experience in home repair and power tool usage. We expect to attract 30% of our customers from newspaper ads, 5% of our customers from local directories, 5% of our customers from the yellow pages, 10% of our customers from family and friends and 50% of our customers from current customers. The most cost effect source will be current customers. In general our industry is growing.

MANAGEMENT

We would evaluate the quality of our management staff as being excellent. Our manager is experienced and very motivated to achieve the various sales and quality assurance objectives we have set. We will use a management information system which produces key inventory, quality assurance and sales data on a weekly basis. All data is compared to previously established goals for that week and deviations are the primary focus of the management staff.

GOALS IMPLEMENTATION

The short term goals of our business are:

  1. Open the store by October 1, 1994
  2. Reach our breakeven point in two months
  3. Have sales of $100,000 in the first six months

In order to achieve our first short term goal we must:

  1. Sign the lease by July 1, 1994
  2. Order a complete inventory by August 1, 1994

In order to achieve our second short term goal we must:

  1. Advertise extensively in Sept. and Oct.
  2. Keep expenses to a minimum

In order to achieve our third short term goal we must:

  1. Promote power tool sales for the Christmas season
  2. Keep good customer traffic in Jan. and Feb.

The long term goals for our business are:

  1. Obtain sales volume of $600,000 in three years
  2. Become the largest hardware dealer in the city
  3. Open a second store in Fond du Lac

The most important thing we must do in order to achieve the long term goals for our business is to develop a highly profitable business with excellent cash flow.

FINANCE

Oshkosh Hardware, Inc. Faces some potential threats or risks to our business. They are discount house competition. We believe we can avoid or compensate for this by providing quality products complimented by quality advice on the use of every product we sell. The financial projections we have prepared are located at the end of this document.

JOB DESCRIPTION-GENERAL MANAGER

The General Manager of the business of the corporation will be the president of the corporation. He will be responsible for the complete operation of the retail hardware store which is owned by the corporation. A detailed description of his duties and responsibilities is as follows:

Sales

Train and supervise the three sales people. Develop programs to motivate and compensate these employees. Coordinate advertising and sales promotion effects to achieve sales totals as outlined in budget. Oversee purchasing function and inventory control procedures to insure adequate merchandise at all times at a reasonable cost.

Finance

Prepare monthly and annual budgets. Secure adequate line of credit from local banks. Supervise office personnel to insure timely preparation of records, statements, all government reports, control of receivables and payables and monthly financial statements.

Administration

Perform duties as required in the areas of personnel, building leasing and maintenance, licenses and permits and public relations.

QUARTERLY FORECASTED BALANCE SHEETS

Beg Bal1st Qtr2nd Qtr3rd Qtr4th Qtr
Assets
Cash30,000418(463)(3,574)4,781
Accounts Receivable020,00013,33333,33333,333
Inventory048,00032,00080,00080,000
Other Current Assets00000
Total Current Assets30,00068,41844,870109,759118,114
Land00000
Building & Improvements00000
Furniture & Equipment075,00075,00075,00075,000
Total Fixed Assets075,00075,00075,00075,000
Less Accum. Depreciation01,8753,7505,6257,500
Net Fixed Assets073,12571,25069,37567,500
Intangible Assets00000
Less Amortization00000
Net Intangible Assets00000
Other Assets00000
Total Assets30,000141,543116,120179,134185,614
Liabilities and Shareholders' Equity
Short-Term Debt00000
Accounts Payable012,72110,54317,07717,077
Dividends Payable00000
Income Taxes Payable0(1,031)(2,867)(2,355)(1,843)
Accured Compensation01,8671,8671,8671,867
Other Current Liabilities00000
Total Current Liabilities013,5579,54316,58917,101
Long-Term Debt0110,000110,000160,000160,000
Other Non-Current Liabilities00000
Total Liabilities0123,557119,543176,589177,101
Common Stock30,00030,00030,00030,00030,000
Retained Earnings0(12,014)(33,423)(27,455)(21,487)
Shareholders' Equity30,00017,986(3,423)2,5458,513
Total Liabilities & Shareholders' Equity30,000141,543116,120179,134185,614

QUARTERLY FORECASTED STATEMENTS OF EARNINGS AND RETAINED EARNINGS

Beg Actuallst Qtr2nd Qtr3rd Qtr4th QtrTotal
Total Sales060,00040,000100,000100,000300,000
Goods/Services021,60014,40036,00036,000108,000
Gross Profit038,40025,60064,00064,000192,000
Operating Expenses047,64545,04552,84552,845198,380
Fixed Expenses
Interest01,9251,9252,8002,8009,450
Depreciation01,8751,8751,8751,8757,500
Amortization000000
Total Fixed Expenses03,8004,6754,67516,950
Operating Profit (Loss)0(13,045)(23,245)6,4806,480(23,330)
Other Income (Expense)000000
Interest Income
Earnings (Loss)
Before Taxes0(13,045)(23,245)6,4806,480(23,330)
Income Taxes0(1,031)(1,836)512512(1,843)
Net Earnings0(12,014)(21,409)5,9685,968(21,487)
Retained Earnings, Beginning00(12,014)(33,423)(27,455)0
Less Dividends000000
Retained Earnings, Ending0(12,014)(33,423)(27,455)(21,487)(21,487)

QUARTERLY FORECASTED STATEMENTS OF CHANGES IN FINANCIAL POSITION

Beg Ballst Qtr2nd Qtr3rd Qtr4th QtrTotal
Sources (Uses) of Cash
Net Earnings (Loss)0(12,014)(21,409)5,9685,968(21,487)
Depreciation & Amortization01,8751,8751,8751,8757,500
Cash Provided by Operations0(10,139)(19,534)7,8347,834(13,987)
Dividends000000
Cash Provided by (Used For) Changes in
Accounts Receivable0(20,000)6,667(20,000)0(33,333)
Inventory0(48,000)16,000(48,000)0(80,000)
Other Current Assets000000
Accounts Payable012,721(2,178)65,34017,077
Income Taxes0(1,031)(1,836)512512(1,843)
Accrued Compensation01,8670001,867
Dividends Payable000000
Other Current Liabilities000000
Other Assests000000
Net Cash Provided by (Used For)
Operating Activities0(54,443)18,653(60,954)512(96,233)
Investment Transactions
Furniture & Equipment0(75,000)000(75,000)
Land000000
Building & Improvements000000
Intangible Assets000000
Net Cash From
Investment Transactions0(75,000)000(75,000)
Financing Transactions
Short-Term Debt000000
Long-Term Debt0110,000050,0000160,000
Other Non-Current Liabilities000000
Sale of Common Stock30,00000000
Net Cash from Financing Transactions30,000110,000050,0000160,000
Net Increase (Decrease) in Cash30,000(29,582)(881)(3,111)8,355(25,219)
Cash-Beginning of Period030,000418(463)(3,574)30,000
Cash-End of Period30,000418(463)(3,574)4,7814,781

FINANCIAL RATIO ANALYSIS

Beg Actlst Qtr2nd Qtr3rd Qtr4th Qtr
Overall Performance
Return on Equity0.00(66.80)625.45234.5070.10
Return on Total Assets0.00(8.49)(18.44)3.333.22
Operating Return0.00(9.22)(20.02)3.623.49
Profitability Measures
Gross Profit Percent0.0064.0064.0064.0064.00
Profit Margin (AIT)0.00(20.02)(53.52)5.975.97
Operating Income per Share0.000.000.000.000.00
Earnings per Share0.000.000.000.000.00
Test of Investment Utilization
Asset Turnover0.000.420.340.560.54
Equity Turnover0.00334(11.69)39.2911.75
Fixed Asset Turnover0.000.820.561.441.48
Average Collection Period0.0030.0030.0030.0030.00
Days Inventory0.00200.00200.00200.00200.00
Inventory Turnover0.000.450.450.450.45
Working Capital Turns0.001.091.131.070.99
Test of Financial Condition
Current Ratio0.005.054.706.626.91
Quick Ratio0.001.511.351.792.23
Working Capital Ratio1.000.430.330.570.60
Dividend Payout0.000.000.000.000.00
Financial Leverage
Total Assets1.007.87(33.92)70.3921.80
Debt/Equity0.006.87(34.92)69.3920.80
Debt to Total Assets0.000.871.030.990.95
Year-End Equity History
Shares Outstanding00000
Market Price per Share0.000.000.000.000.00
(@20x's earnings)
Book Value per Share0.000.000.000.000.00
Altman Analysis Ratio
1.2x (1)1.200.470.370.620.65
1.4x (2)0.00(0.12)(0.40)(0.21)(0.16)
3.3x (3)0.00(0.35)(0.72)0.070.07
0.6x (4)0.000.000.000.000.00
1.0x (5)0.000.420.340.560.54
Z Value1.20.042(.041)1.041.10

DETAILS FOR QUARTERLY STATEMENTS OF EARNINGS

Beg Actlst Qtr2nd Qtr3rd Qtr4th QtrTotal% SalesFixed
Sales
Dollars Sales Forecasted
Product 1060,00040,000100,000100,000300,000
Product 2000000
Product 3000000
Product 4000000
Product 5000000
Product 6000000
Total Sales060,00040,000100,000100,000300,000
Cost of Sales
Dollar Cost Forecasted
Product 1021,60014,40036,00036,000108,00036.00%0
Product 20000000.00%0
Product 30000000.00%0
Product 40000000.00%0
Product 50000000.00%0
Product 60000000.00%0
Total Cost of Sales021,60014,40036,00036,000108,000
Operating Expenses
Payroll012,00012,00012,00012,00048,0000.00%12,000
Paroll Taxes09509509509503,8000.00%950
Advertising04,8003,2008,0008,00024,0008.00%0
Automobile Expenses000000.00%0
Bad Debts0000000.00%0
Commissions03,0002,0005,0005,00015,0005.00%0
Computer Rental01,2001,2001,2001,2004,8000.00%1,200
Computer Supplies02202202202208800.00%220
Computer Maintenance01001001001004000.00%100
Dealer Training01,0001,0001,0001,0004,0000.00%1,000
Electricity03,0003,0003,0003,00012,0000.00%3,000
Employment Ads and Fees0000000.00%0
Entertainment: Business01,5001,5001,5001,5006,0000.00%1,500
General Insurance080080080080032,0000.00%800
Health & W/C Insurance000000.00%0
Interest-LT Debt02,5002,5002,5002,50010,0000.00%2,500
Legal & Accounting01,5001,5001,5001,5006,0000.00%1,500
Maintenance & Repairs04604604604601,8400.00%460
Beg Actlst Qtr2nd Qtr3rd Qtr4th QtrTotal% SalesFixed
Office Supplies02702702702701,0800.00%270
Postage0858585853400.00%85
Prof. Development0000000.00%0
Professional Fees01,0001,0001,0001,0004,0000.00%1,000
Rent08,0008,0008,0008,00032,0000.00%8,000
Shows & Conferences0000000.00%0
Subscriptions & Dues02852852852851,1400.00%285
Telephone01,2251,2251,2251,2254,9000.00%1,225
Temporary Employees0000000.00%0
Travel Expenses07507507507503,0000.00%750
Utilities03,0003,0003,0003,00012,0000.00%3,000
Research & Devlpmnt.0000000.00%0
Royalties0000000.00%0
Other 10000000.00%0
Other 20000000.00%0
Other 30000000.00%0
Total Operating
Expenses047,64545,04552,84552,845198,380
Percent of Sales0.0079.41112.6152.8552.8566.13

Hardware Store: Oshkosh Hardware, Inc.

views updated

Hardware Store

BUSINESS PLAN

OSHKOSH HARDWARE, INC


123 Main St.
Oshkosh, WI 54901

June 1994


The following plan outlines how a small hardware store can survive competition from large discount chains by offering products and providing expert advice in the use of any product it sells. This plan is fictional and has not used to gain funding from a bank or other lending institution.


  • executive summary
  • the business
  • the market
  • sales
  • management
  • goals implementation
  • finance
  • job description-general manager
  • quarterly forecasted balance sheets
  • quarterly forecasted statements of earnings and retained earnings
  • quarterly forecasted statements of changes in financial position
  • financial ratio analysis
  • details for quarterly statements of earnings

EXECUTIVE SUMMARY

Oshkosh Hardware, Inc. is a new corporation which is going to establish a retail hardware store in a strip mall in Oshkosh, Wisconsin. The store will sell hardware of all kinds, quality tools, paint and housewares. The business will make revenue and a profit by servicing its customers not only with needed hardware but also with expert advice in the use of any product it sells.

Oshkosh Hardware, Inc. will be operated by its sole shareholder, James Smith. The company will have a total of four employees. It will sell its products in the local market. Customers will buy our products because we will provide free advice on the use of all of our products and will also furnish a full refund warranty.

Oshkosh Hardware, Inc. will sell its products in the Oshkosh store staffed by three sales representatives. No additional employees will be needed to achieve its short and long range goals. The primary short range goal is to open the store by October 1, 1994. In order to achieve this goal a lease must be signed by July 1, 1994 and the complete inventory ordered by August 1, 1994.

Mr. James Smith will invest $30,000 in the business. In addition the company will have to borrow $150,000 during the first year to cover the investment in inventory, accounts receivable, and furniture and equipment. The company will be profitable after six months of operation and should be able to start repayment of the loan in the second year.

THE BUSINESS

The business will sell hardware of all kinds, quality tools, paint, and housewares. We will purchase our products from three large wholesale buying groups.

In general our customers are homeowners who do their own repair and maintenance, hobbyists, and housewives. Our business is unique in that we will have a complete line of all hardware items and will be able to get special orders by overnight delivery. The business makes revenue and profits by servicing our customers not only with needed hardware but also with expert advice in the use of any product we sell. Our major costs for bringing our products to market are cost of merchandise of 36%, salaries of $45,000, and occupancy costs of $60,000.

Oshkosh Hardware, Inc.'s retail outlet will be located at 1524 Frontage Road, which is in a newly developed retail center of Oshkosh. Our location helps facilitate accessibility from all parts of town and reduces our delivery costs. The store will occupy 7500 square feet of space. The major equipment involved in our business is counters and shelving, a computer, a paint mixing machine, and a truck.

THE MARKET

Oshkosh Hardware, Inc. will operate in the local market. There are 15,000 potential customers in this market area. We have three competitors who control approximately 98% of the market at present. We feel we can capture 25% of the market within the next four years. Our major reason for believing this is that our staff is technically competent to advise our customers in the correct use of all products we sell.

After a careful market analysis we have determined that approximately 60% of our customers are men and 40% are women. The percentage of customers that fall into the following age categories are:

Under 16-0%
17-21-5%
22-30-30%
31-40-30%
41-50-20%
51-60-10%
61-70-5%
Over 70-0%

The reasons our customers prefer our products is our complete knowledge of their use and our full refund warranty.

We get our information about what products our customers want by talking to existing customers. There seems to be an increasing demand for our product. The demand for our product is increasing in size based on the change in population characteristics.

SALES

At Oshkosh Hardware, Inc. we will employ 3 sales people and will not need any additional personnel to achieve our sales goals. These salespeople will need several years experience in home repair and power tool usage. We expect to attract 30% of our customers from newspaper ads, 5% of our customers from local directories, 5% of our customers from the yellow pages, 10% of our customers from family and friends and 50% of our customers from current customers. The most cost effect source will be current customers. In general our industry is growing.

MANAGEMENT

We would evaluate the quality of our management staff as being excellent. Our manager is experienced and very motivated to achieve the various sales and quality assurance objectives we have set. We will use a management information system which produces key inventory, quality assurance and sales data on a weekly basis. All data is compared to previously established goals for that week and deviations are the primary focus of the management staff.

GOALS IMPLEMENTATION

The short term goals of our business are:

  1. Open the store by October 1, 1994
  2. Reach our breakeven point in two months
  3. Have sales of $ 100,000 in the first six months

In order to achieve our first short term goal we must:

  1. Sign the lease by July 1, 1994
  2. Order a complete inventory by August 1, 1994

In order to achieve our second short term goal we must:

  1. Advertise extensively in Sept. and Oct.
  2. Keep expenses to a minimum

In order to achieve our third short term goal we must:

  1. Promote power tool sales for the Christmas season
  2. Keep good customer traffic in Jan. and Feb.

The long term goals for our business are:

  1. Obtain sales volume of $600,000 in three years
  2. Become the largest hardware dealer in the city
  3. Open a second store in Fond du Lac

The most important thing we must do in order to achieve the long term goals for our business is to develop a highly profitable business with excellent cash flow.

FINANCE

Oshkosh Hardware, Inc. Faces some potential threats or risks to our business. They are discount house competition. We believe we can avoid or compensate for this by providing quality products complimented by quality advice on the use of every product we sell. The financial projections we have prepared are located at the end of this document.

JOB DESCRIPTION - GENERAL MANAGER

Sales

The General Manager of the business of the corporation will be the president of the corporation. He will be responsible for the complete operation of the retail hardware store which is owned by the corporation. A detailed description of his duties and responsibilities is as follows:

Train and supervise the three sales people. Develop programs to motivate and compensate these employees. Coordinate advertising and sales promotion effects to achieve sales totals as outlined in budget. Oversee purchasing function and inventory control procedures to insure adequate merchandise at all times at a reasonable cost.

Finance

Prepare monthly and annual budgets. Secure adequate line of credit from local banks. Supervise office personnel to insure timely preparation of records, statements, all government reports, control of receivables and payables and monthly financial statements.

Administration

Perform duties as required in the areas of personnel, building leasing and maintenance, licenses and permits and public relations.

QUARTERLY FORECASTED BALANCE SHEETS

Beg Bal1st Qtr2nd Qtr3rd Qtr4th Qtr
Assets
Cash30,000418(463)(3,574)4,781
Accounts Receivable020,00013,33333,33333,333
Inventory048,00032,00080,00080,000
Other Current Assets00000
Total Current Assets30,00068,41844,870109,759118,114
Land00000
Building & Improvements00000
Furniture & Equipment075,00075,00075,00075,000
Total Fixed Assets075,00075,00075,00075,000
Less Accum. Depreciation01,8753,7505,6257,500
Net Fixed Assets073,12571,25069,37567,500
Intangible Assets00000
Less Amortization00000
Net Intangible Assets00000
Other Assets00000
Total Assets30,000141,543116,120179,134185,614
Liabilities and Shareholders' Equity
Short-Term Debt00000
Accounts Payable012,72110,54317,07717,077
Dividends Payable00000
Income Taxes Payable0(1,031)(2,867)(2,355)(1,843)
Accured Compensation01,8671,8671,8671,867
Other Current Liabilities00000
Total Current Liabilities013,5579,54316,58917,101
Long-Term Debt0110,000110,000160,000160,000
Other Non-Current Liabilities00000
Total Liabilities0123,557119,543176,589177,101
Common Stock30,00030,00030,00030,00030,000
Retained Earnings0(12,014)(33,423)(27,455)(21,487)
Shareholders' Equity30,00017,986(3,423)2,5458,513
Total Liabilities & Shareholders' Equity30,000141,543116,120179,134185,614

QUARTERLY FORECASTED STATEMENTS OF EARNINGS AND RETAINED EARNINGS

Beg Actual1st Qtr2nd Qtr3rd Qtr4th QtrTotal
Total Sales060,00040,000100,000100,000300,000
Goods/Services021,60014,40036,00036,000108,000
Gross Profit038,40025,60064,00064,000192,000
Operating Expenses047,64545,04552,84552,845198,380
Fixed Expenses
Interest01,9251,9252,8002,8009,450
Depreciation01,8751,8751,8751,8757,500
Amortization000000
Total Fixed Expenses03,8003,8004,6754,67516,950
Operating Profit
(Loss)0(13,045)(23,245)6,4806,480(23,330)
Other Income
(Expense)000000
Interest Income
Earnings (Loss) Before Taxes0(13,045)(23,245)6,4806,480(23,330)
Income Taxes0(1,031)(1,836)512512(1,843)
Net Earnings0(12,014)(21,409)5,9685,968(21,487)
Retained Earnings, Beginning00(12,014)(33,423)(27,455)0
Less Dividends000000
Retained Earnings, Ending0(12,014)(33,423)(27,455)(21,487)(21,487)

QUARTERLY FORECASTED STATEMENTS OF CHANGES IN FINANCIAL POSITION

Beg Bal1st Qtr2nd Qtr3rd Qtr4th QtrTotal
Sources (Uses) of Cash
Net Earnings (Loss)0(12,014)(21,409)5,9685,968(21,487)
Depreciation & Amortization01,8751,8751,8751,8757,500
Cash Provided by Operations0(10,139)(19,534)7,8347,834(13,987)
Dividends000000
Cash Provided by (Used For) Changes in
Accounts Receivable0(20,000)6,667(20,000)0(33,333)
Inventory0(48,000)16,000(48,000)0(80,000)
Other Current Assets000000
Accounts Payable012,721(2,178)6,534017,077
Income Taxes0(1,031)(1,836)512512(1,843)
Accrued Compensation01,8670001,867
Dividends Payable000000
Other Current Liabilities000000
Other Assests000000
Net Cash Provided by (Used For)
Operating Activities0(54,443)18,653(60,954)512(96,233)
Investment Transactions
Furniture & Equipment0(75,000)000(75,000)
Land000000
Building & Improvements000000
Intangible Assets000000
Net Cash From Investment Transactions0(75,000)000(75,000)
Financing Transactions
Short-Term Debt000000
Long-Term Debt0110,000050,0000160,000
Other Non-Current Liabilities000000
Sale of Common Stock30,00000000
Net Cash from Financing Transactions30,000110,000050,0000160,000
Net Increase (Decrease) in Cash30,000(29,582)(881)(3,111)8,355(25,219)
Cash-Beginning of Period030,000418(463)(3,574)30,000
Cash-End of Period30,000418(463)(3,574)4,7814,781

FINANCIAL RATIO ANALYSIS

Beg Act1st Qtr2nd Qtr3rd Qtr4th Qtr
Overall Performance
Return on Equity0.00(66.80)625.45234.5070.10
Return on Total Assets0.00(8.49)(18.44)3.33322
Operating Return0.00(9.22)(20.02)3.623.49
Profitability Measures
Gross Profit Percent0.0064.0064.0064.0064.00
Profit Margin (AIT)0.00(20.02)(53.52)5.975.97
Operating Income per Share0.000.000.000.000.00
Earnings per Share0.000.000.000.000.00
Test of Investment Utilization
Asset Turnover0.000.420340.560.54
Equity Turnover0.003.34(11.69)392911.75
Fixed Asset Turnover0.000.820.561.441.48
Average Collection Period0.0030.0030.0030.0030.00
Days Inventory0.00200.00200.00200.00200.00
Inventory Turnover0.000.450.450.450.45
Working Capital Turns0.001.091.131.070.99
Test of Financial Condition
Current Ratio0.005.054.706.626.91
Quick Ratio0.001511351.79223
Working Capital Ratio1.000.430.330.570.60
Dividend Payout0.000.000.000.000.00
Financial Leverage
Total Assets1.007.87(33.92)70.3921.80
Debt/Equity0.006.87(34.92)69.3920.80
Debt to Total Assets0.000.871.030.990.95
Year-End Equity History
Shares Outstanding00000
Market Price per Share
(@20x's earnings)
0.000.000.000.000.00
Book Value per Share0.000.000.000.000.00
Altman Analysis Ratio
1.2×(l)1200.470.370.620.65
1.4×(2)0.00(0.12)(0.40)(0.21)(0.16)
3.3×(3)0.00(0.35)(0.72)0.070.07
0.6×(4)0.000.000.000.000.00
1.0×(5)0.000.420.340.560.54
Z Value120.042(.041)1.041.10

DETAILS FOR QUARTERLY STATEMENTS OF EARNINGS

Beg Act1st Qtr2nd Qtr3rd Qtr4th QtrTotal%SalesFixed
Sales
Dollars Sales Forecasted
Product 1060,00040,000100,000100,000300,000
Product 2000000
Product 3000000
Product 4000000
Product 5000000
Product 6000000
Total Sales060,00040,000100,000100,000300,000
Cost of Sales
Dollar Cost Forecasted
Product 1021,60014,40036,00036,000108,00036.00%0
Product 20000000.00%0
Product 30000000.00%0
Product 40000000.00%0
Product 50000000.00%0
Product 60000000.00%0
Total Cost of Sales021,60014,40036,00036,000108,000
Operating Expenses
Payroll012,00012,00012,00012,00048,0000.00%12,000
Paroll Taxes09509509509503,8000.00%950
Advertising04,8003,2008,0008,00024,0008.00%0
Automobile Expenses000000.00%0
Bad Debts0000000.00%0
Commissions03,0002,0005,0005,00015,0005.00%0
Computer Rental01,2001,2001,2001,2004,8000.00%1,200
Computer Supplies02202202202208800.00%220
Computer Maintenance01001001001004000.00%100
Dealer Training01,0001,0001,0001,0004,0000.00%1,000
Electricity03,0003,0003,0003,00012,0000.00%3,000
Employment Ads and Fees0000000.00%0
Entertainment: Business01,5001,5001,5001,5006,0000.00%1,500
General Insurance080080080080032,0000.00%800
Health & W/C Insurance000000.00%0
Interest-LT Debt02,5002,5002,5002,50010,0000.00%2,500
Legal & Accounting01,5001,5001,5001,5006,0000.00%1,500
Maintenance & Repairs04604604604601,8400.00%460
Beg Act1st Qtr2nd Qtr3rd Qtr4th QtrTotal%SalesFixed
Office Supplies02702702702701,0800.00%270
Postage0858585853400.00%85
Prof. Development0000000.00%0
Professional Fees01,0001,0001,0001,0004,0000.00%1,000
Rent08,0008,0008,0008,00032,0000.00%8,000
Shows & Conferences0000000.00%0
Subscriptions & Dues02852852852851,1400.00%285
Telephone01,2251,2251,2251,2254,9000.00%1,225
Temporary Employees0000000.00%0
Travel Expenses07507507507503,0000.00%750
Utilities03,0003,0003,0003,00012,0000.00%3,000
Research & Devlpmnt.0000000.00%0
Royalties0000000.00%0
Other 10000000.00%0
Other 20000000.00%0
Other 30000000.00%0
Total Operating Expenses047,64545,04552,84552,845198,380
Percent of Sales0.0079.41112.6152.8552.8566.13