3:50 PM Sun Sep 25 . . . all 45% a services.hbsp.harvard.edu 911-412 Assessing a Company's Future Financial Health Exhibit 1 SciTronics, Inc. Consolidated Income Statements 2005-2008 ($ in thousands) 2004 2005 2006 2007 2008 Sales $1 15,000 $147,000 $171,000 $205,000 $244,000 Cost of goods sold 43,000 50,00 63,000 74,000 Gross margin 104,000 121,000 142,000 170,000 Research & development 15,000 20,000 26,000 28,000 Sell, general & administrative 79,000 92,000 106,000 16,000 Operating income 10,000 9,000 10,000 26,000 Interest expense 1,00 2,000 2,000 2,000 Profit before tax 9,000 7,000 8,000 24,000 Income tax 4,000 2,000 3,000 10,000 Net income $ 5,000 $ 5,000 5,000 $ 14,000 Source: Company documents. Exhibit 2 SciTronics, Inc. Consolidated Balance Sheet at December 31, 2005-2008 ($ in thousands) 2005 2006 2007 2008 Cash $ 9,000 $ 10,000 $ 15,000 $ 18,000 Accounts receivable 42,000 53,000 61,000 66,000 Inventories 21,000 28,000 30,000 29,000 Other current assets 10,000 13,000 21,000 20,000 Total current assets 82,000 104,000 127,000 133,000 Net property & equipment 9,00 12,000 13,000 18,000 Other 2,000 2,000 6,000 8,000 Total assets $93,000 $118,000 $146,000 $159,000 Notes payable $ 3,000 $ 18,000 $ 8,000 $ 10,000 Accounts payable 5,000 6,00 7,000 6,000 Accrued expenses 10,000 13,000 21,000 28,000 Other current liabilities 3,000 3,000 4,000 4,000 Total current liabilities 21,000 40,000 40,000 48,000 Long-term senior debt 10,000 9,000 8,000 7,000 Subordinated convertible debt 20,000 20,000 Other liabilities 1,000 3,000 7,000 9,000 Owners' equity 61,000 66,000 71,000 85,000 Treasury stock (10,000) Owners' equity 61,000 66,000 71,000 75,000 Total liabilities and equity $93,000 $118,000 $146,000 $159,000 Source: Company documents. 12 This document is authorized for use only by Melissa Adamson in FIN-320-X1211 Principles of Finance 22EW1 at Southern New Hampshire University, 2022. Assessing a Company's Future Financial Health 911-412