Problem 1.6: Table 3.1 in Chapter 3 presents financial statements over the period 2014 through 2017 for R&E Supplies, Inc.
a. Construct a sources and uses statement for the company over this period (one statement covering all three years).
b. What insights, if any, does the sources and uses statement give you the financial position of about R&E Supplies?

R&E Supplies, Inc.
	Income Statements		Changes
	2014	2015	2016	2017*	2017 - 2014
Net sales	$11,190	$13,764	$16,104	$20,613
Cost of goods sold	$9,400	$11,699	$13,688	$17,727
Gross profit	$1,790	$2,065	$2,416	$2,886
Expenses:
General, selling, and administrative (SG&A) expenses	$1,019	$1,239	$1,610	$2,267
Net interest expense	$100	$103	$110	$90
Earnings before tax	$671	$723	$696	$529
Tax	$302	$325	$313	$238
Earnings after tax	$369	$398	$383	$291
Supplemental figures:
Earnings before interest and taxes	$771	$826	$806	$619
Tax rate (%)	45.0%	45.0%	45.0%	45.0%
	Balance Sheets
Assets
Current assets:
Cash and securities	$671	$551	$644	$412
Accounts receivable	$1,343	$1,789	$2,094	$2,886
Inventories	$1,119	$1,376	$1,932	$2,267
Prepaid expenses	$14	$12	$15	$18
Total current assets	$3,147	$3,728	$4,685	$5,583
Net fixed assets	$128	$124	$295	$287
Total assets	$3,275	$3,852	$4,980	$5,870
Liabilities and Owners' Equity
Current Liabilities:
Bank loan	$50	$50	$50	$50
Accounts payable	$1,007	$1,443	$2,426	$3,212
Current portion long-term debt	$60	$50	$50	$100
Accrued wages	$5	$7	$10	$18
Total current liabilities	$1,122	$1,550	$2,536	$3,380
Long-term debt	$960	$910	$860	$760
Common stock	$150	$150	$150	$150
Retained earnings	$1,043	$1,242	$1,434	$1,580
Total liabilities and owners' equity	$3,275	$3,852	$4,980	$5,870
*Estimate
Supplemental figures:
Interest-bearing debt	$1,070	$1,010	$960	$910
Owners' equity	$1,193	$1,392	$1,584	$1,730
Invested capital	$2,263	$2,402	$2,544	$2,640
Principal payment	NA	-$60	-$50	-$50
Sources and Uses Statement:
Sources of Funds
Total sources of funds	0
Uses of Funds
Total uses of Funds	0