All else constant, what would Digbys SG&A/Sales ratio be if the company had spent an additional $1,500,000 for Drats promotional budget and $750,000 for Drats sales budget?

Select: 1

	7.8%
	10.9%
	10.3%
	9.1%

Annual Report	Digby	C59559	Round: 4 Dec. 31, 2022

Balance Sheet

DEFINITIONS: Common Size: The common size column simply represents each item as a percentage of total assets for that year. Cash: Your end-of-year cash position. Accounts Receivable: Reflects the lag between delivery and payment of your products. Inventories: The current value of your inventory across all products. A zero indicates your company stocked out. Unmet demand would, of course, fall to your competitors. Plant & Equipment: The current value of your plant. Accum Deprec: The total accumulated depreciation from your plant. Accts Payable: What the company currently owes suppliers for materials and services. Current Debt: The debt the company is obligated to pay during the next year of operations. It includes emergency loans used to keep your company solvent should you run out of cash during the year. Long Term Debt: The company's long term debt is in the form of bonds, and this represents the total value of your bonds. Common Stock: The amount of capital invested by shareholders in the company. Retained Earnings: The profits that the company chose to keep instead of paying to shareholders as dividends.

ASSETS			2022	2021
			Common Size
Cash	$51,258		22.2%	$38,208
Accounts Receivable	$14,410		6.2%	$13,100
Inventory	$9,675		4.2%	$16,326
Total Current Assets		$75,343	32.7%	$67,634
Plant & Equipment	$269,300		116.8%	$269,300
Accumulated Depreciation	($114,051)		-49.5%	($96,098)
Total Fixed Assets		$155,249	67.3%	$173,202
Total Assets		$230,592	100.0%	$240,837
LIABILITIES & OWNERS' EQUITY
Accounts Payable	$7,623		3.3%	$9,375
Current Debt	$29,864		13.0%	$31,933
Long Term Debt	$96,293		41.8%	$106,771
Total Liabilities		$133,780	58.0%	$148,079
Common Stock	$56,652		24.6%	$56,652
Retained Earnings	$40,160		17.4%	$36,106
Total Equity		$96,812	42.0%	$92,758
Total Liab. & O. Equity		$230,592	100.0%	$240,837

Cash Flow Statement

The Cash Flow Statement examines what happened in the Cash Account during the year. Cash injections appear as positive numbers and cash withdrawals as negative numbers. The Cash Flow Statement is an excellent tool for diagnosing emergency loans. When negative cash flows exceed positives, you are forced to seek emergency funding. For example, if sales are bad and you find yourself carrying an abundance of excess inventory, the report would show the increase in inventory as a huge negative cash flow. Too much unexpected inventory could outstrip your inflows, exhaust your starting cash and force you to beg for money to keep your company afloat.

Cash Flows from Operating Activities:	2022	2021
Net Income (Loss)	$12,368	$140
Depreciation	$17,953	$17,953
Extraordinary gains/losses/writeoffs	($937)	$0
Accounts Payable	($1,752)	$960
Inventory	$6,651	($13,657)
Accounts Receivable	($1,310)	$366
Net cash from operations	$32,973	$5,762
Cash Flows from Investing Activities:
Plant Improvements	$0	($43,700)
Cash Flows from Financing Activities:
Dividends Paid	($8,314)	$0
Sales of Common Stock	$0	$17,553
Purchase of Common Stock	$0	$0
Cash from long term debt	$0	$15,604
Retirement of long term debt	($9,541)	$0
Change in current debt (net)	($2,068)	($11,649)
Net cash from financing activities	($19,923)	$21,508
Net change in cash position	$13,050	($16,430)
Closing cash position	$51,258	$38,208

Annual Report	Page 1

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Annual Report	Digby	C59559	Round: 4 Dec. 31, 2022

2022 Income Statement

(Product Name:)	Dug	Drat	Deal	Dell	Na	Na	Na	Na	2022 Total	Common Size
Sales	$35,324	$35,649	$50,799	$53,555	$0	$0	$0	$0	$175,327	100.0%
Variable Costs:
Direct Labor	$3,740	$3,853	$10,092	$9,304	$0	$0	$0	$0	$26,989	15.4%
Direct Material	$15,611	$16,154	$19,961	$20,688	$0	$0	$0	$0	$72,414	41.3%
Inventory Carry	$157	$205	$371	$428	$0	$0	$0	$0	$1,161	0.7%
Total Variable	$19,508	$20,212	$30,423	$30,420	$0	$0	$0	$0	$100,564	57.4%
Contribution Margin	$15,816	$15,436	$20,376	$23,135	$0	$0	$0	$0	$74,763	42.6%
Period Costs:
Depreciation	$5,060	$5,673	$3,293	$3,927	$0	$0	$0	$0	$17,953	10.2%
SG&A: R&D	$446	$446	$966	$966	$0	$0	$0	$0	$2,824	1.6%
Promotions	$1,300	$1,300	$1,300	$1,300	$0	$0	$0	$0	$5,200	3.0%
Sales	$1,600	$1,600	$1,400	$1,400	$0	$0	$0	$0	$6,000	3.4%
Admin	$377	$381	$542	$572	$0	$0	$0	$0	$1,872	1.1%
Total Period	$8,783	$9,400	$7,502	$8,165	$0	$0	$0	$0	$33,849	19.3%
Net Margin	$7,033	$6,037	$12,874	$14,970	$0	$0	$0	$0	$40,914	23.3%