Income Statement ( in $ thousands) -Current Year = CY -Last Year = LY Year Ended

Current Year Last Year Revenues (Sales) $ 3,000 $ 2,700 Cost of Goods Sold $ (1,800) $ (1,600) Gross Profit (Margin) $ 1,200 $ 1,100 Selling Expenses $ (440) $ (400) Advertising Expense $ (140) $ (120) Administrative Expenses $ (230) $ (220) Depreciation Expense $ (50) $ (40) Operating Income (EBIT) $ 340 $ 320 Interest Expense $ (30) $ (35) Gain on Sale of PPE $ 5 $ - Earnings Before Taxes $ 315 $ 285 Tax Expense $ (66) $ (60) Net Income (Profit) $ 249 $ 225 GO TO RATIO TAB (at bottom of the sheet) TO DO HOMEWORK CALCULATIONS Other Data: Number of Shares Outstanding (000's) 300 Share Price as of 12/31/Current Year $ 11.00 Share Price as of 12/31/Last Year $ 9.00 Tax Rate 21% Total Dividends Paid Current Year (000's) $ 60 Capital Expenditures Current Year (000's) $ 70 Sold old equipment for $20,000 with an original cost of $25,000 and A/D of $10,000

Rush Creek Company Balance Sheet

( in $ thousands)

Current Year = CY ( in $ thousands) Last Year = LY

12/31/CY 12/31/LY Assets Cash. $ 142 $ 40 Accounts Receivable $ 312 $ 275 Inventories $ 170 $ 145 Current Assets $ 624 $ 460 Land $ 75 $ 75 Buildings $ 125 $ 125 Equipment $ 325 $ 280 Accumulated Depreciation $ (180) $ (140) Net PP&E $ 345 $ 340 Other L/T assets $ 25 $ 20 Total Assets $ 994 $ 820 Liabilities and Shareholders' Equity Accounts Payable $ 30 $ 25 Accrued Liabilties $ 15 $ 10 Notes Payable $ 20 $ 15 Current Maturities on L/T Debt $ 30 $ 30 Current Liabilities $ 95 $ 80 Long Term Debt $ 340 $ 370 Capital Lease Obligations $ - $ - Total Liabilities $ 435 $ 450 Common Stock (Par) $ 50 $ 50 Additional Paid-In Capital $ 200 $ 200 Retain Earnings $ 309 $ 120 Total Equity $ 559 $ 370 Total Liabilities and Equity $ 994 $ 820

Rush Creek Company Statement of Cash Flows ( in $ thousands)

Current Year = CY

Year Ended 12/31/CY Operating Activities: Net Income $ 249 Depreciation $ 50 Cash Effect of Changes in: Accounts Receivable $ (37) Inventories $ (25) Accounts Payable & Acc. Liab. $ 10 Net Change in Net Working Capital $ (52) Other $ (5) Cash From Operating Activities $ 242 Investment Activities: Capital Expenditures $ (70) Proceeds from Sale $ 20 Gain on Sale $ (5) Cash From Investing Activities $ (55) Financing Activities: Dividends Paid $ (60) Payment of L/T Debt $ (30) Increase in S/T Borrowing $ 5 Cash From Financing Activities. $ (85) Change In Cash $ 102

Rush Creek Company Statement of Retained Earnings ( in $ thousands)

Year Ended 12/31/CY Beginning Retained Earnings $ 120 Add Net Income $ 249 Less Dividends Paid $ 60 Ending Retained Earnings $ 309

Rush Creek Company Ratio Analysis

Current Year = CY Last Year = LY

CY LY

Calculations

Liquidity Ratios Current Ratio CA / CL Quick Ratio (CA - Inv. ) / CL

Asset Management Ratios Inventory Turnover COGS / Inv. Days Sales Outstanding (DSO) A/R / Avg. Daily Sales Total Asset Turnover Sales / TA Debt Management Ratios Debt to Equity Ratio Debt / Equity Debt Ratio Debt / Total Assets Times Interest Earned EBIT / Interst Exp. A/P Days A/P / Avg. Daily COGS

Profitability Ratios Profit Margin Net Income / Sales Return on Assets Net Income / TA Return on Equity Net Income / Equity Return on Invested Capital EBIT (1-TR) / Invested Capital (use total liabs & equity for invested capital)

Market / Valuation Ratios Earnings Per Share (EPS) Net Income / # Shares Price / Earnings Ratio Share Price / EPS Market Capitalization # Shares * Share Price Total Shareholder Return N/A (Dividends + SPA) / Original Investment (spa = share price appreciation)

1) What two things should always be done in conjuction with any ratio analysis? 2) What are some limitations / issues with ratio analysis?

Rush Creek Monthly Results January - Current Year

(000's)

Favorable or (Unfavorable) Versus: Budget Last Year Actual $ % $ % Sales: United States $ 180 (15) -8% 20 13% Europe $ 50 (7) -12% 6 14% Canada $ 20 (3) -13% 3 18% Total Sales $ 250 (25) -9% 29 13% COGS: Labor $ 50 4 7% (5) -11% Raw Materials $ 20 2 9% (2) -11% Production $ 80 9 10% (10) -14% Total COGS $ 150 15 9% (17) -16% Other Expenses: Selling $ 36 3 8% (4) -13% Advertising $ 12 1 8% (2) -20% Administrative $ 24 0 0% (2) -9% Total Expenses $ 72 4 5% (8) -13% Operating Income $ 28 $ (6) -18% $ 4 17