Review this Excel spreadsheet. In the Horizontal worksheet, highlight the cells for the year 2003 that indicate the need for further examination. Then review the Vertical worksheet and calculate the key ratios for each year as appropriate (you will not be able to calculate all ratios for year 2001).

Add comments for the ratios that indicate the need for further investigation.

Horizontal Analysis
Balance Sheet		2003	% Change	$ Change	2002	% Change	$ Change	2001
Assets
Current Assets
Cash		$ 2,388.00			$ 1,695.00			$ 453.00
Accounts receivable		$ 5,592.00			$ 3,432.00			$ 2,094.00
Inventories		$ 9,434.00			$ 5,034.00			$ 3,266.00
Notes Receivable		$ 2,681.00			$ 1,592.00			$ 622.00
Deferred Net Taxes		$ 211.00			$ 209.00			$ 299.00
Intangible Assets		$ 1,157.00			$ 971.00			$ 552.00
Total Current Assets		$ 21,463.00			$ 12,933.00			$ 7,286.00
Equipment		$ 6,940.00			$ 910.00			$ 600.00
Other Assets		$ 183.00			$ 167.00			$ 163.00
Deferred Income Taxes		$ 222.00			$ 126.00			$ 34.00
Intangible Assets		$ 274.00			$ 251.00			$ 252.00
Total Assets		$ 29,082.00			$ 14,387.00			$ 8,335.00
Liabilities and Stockholder's Equity
Current Liabilities
Notes Payable		$ 1,625.00			$ 1,328.00			$ 1,021.00
Long-Term Obligations		$ 136.00			$ 103.00			$ 95.00
Accounts Payable		$ 5,862.00			$ 3,871.00			$ 2,307.00
Income taxes payable		$ 614.00			$ 591.00			$ 86.00
Total Current Liabilities		$ 8,237.00			$ 5,893.00			$ 3,509.00
Long-Term Obligations		$ 367.00			$ 161.00			$ 79.00
Deferred income taxes		$ 242.00			$ -			$ -
Total Liabilities		$ 8,846.00			$ 6,054.00			$ 3,588.00
Stockholder's Equity
Common Stock		$ 183.00			$ 56.00			$ 37.00
Additional Paid-in Capital		$ 14,213.00			$ 7,086.00			$ 3,810.00
Retained Earnings		$ 5,840.00			$ 1,191.00			$ 900.00
Total Stockholder's Equity		$ 20,236.00			$ 8,333.00			$ 4,747.00
Total Liabilities Stockholder's Equity		$ 29,082.00			$ 14,387.00			$ 8,335.00
Income Statement		2003	% Change	$ Change	2002	% Change	$ Change	2001
Sales		$ 18,848.00			$ 12,445.00			$ 8,213.00
Cost of Goods Sold		$ 10,598.00			$ 6,833.00			$ 4,523.00
Gross Margin		$ 8,250.00			$ 5,612.00			$ 3,690.00
General & Administrative Expenses		$ 967.00			$ 3,366.00			$ 1,889.00
Research & Developmental Costs		$ 149.00			$ 1,335.00			$ 895.00
Income From Operations		$ 7,134.00			$ 911.00			$ 906.00
Net Interest Expense		$ 217.00			$ 64.00			$ 161.00
Loss on Sale or Receivables		$ -			$ -			$ 77.00
Income Before Taxes		$ 6,917.00			$ 847.00			$ 668.00
Provision for Income Taxes		$ 2,268.00			$ 556.00			$ 284.00
Net Income		$ 4,649.00			$ 291.00			$ 384.00