No Investment Income Statement ($1000s except earnings per share)

|
| 2010 | 2011 | 2012 |
Net Sales
| $120,000 | $144,000 | $144,000 |
Cost of goods sold
| $97,320 | $116,784 | $116,784 |
Gross Margin
| $22,680 | $27,216 | $27,216 |
| | | |
Research and development
| $6,000 | $7,200 | $7,200 |
Selling, general and administrative
| $10,032 | $12,038 | $12,038 |
Operating Income | $6,648 | $7,978 | $7,978 |
| | | |
Interest expense
| $735 | $1,311 | $1,553 |
Other income (expenses) | $50 | $50 | $50 |
| | | |
Income before income taxes
| $5,863 | $6,616 | $6,375 |
| | | |
Income taxes (at 40%) | $2,345 | $2,647 | $2,550 |
Net income
| $3,518 | $3,970 | $3,825 |
| | | |
Earnings per share
| $2.36 | $2.66 | $2.56 |
No Investment Balance Sheet ($1000s except number of shares outstanding) |
| 2010 | 2011 | 2012 |
Cash
| $3,960 | $4,752 | $4,752 |
Accounts receivable
| $19,726 | $23,671 | $23,671 |
Inventories
| $13,865 | $16,638 | $16,638 |
Prepaid expenses
| $480 | $576 | $576 |
Total current assets | $38,031 | $45,637 | $45,637 |
| | | |
Property, plant & equipment at cost
| $8,182 | $9,082 | $9,982 |
less: Accumulated depreciation | $2,179 | $2,793 | $3,474 |
Net property, plant & equipment | $6,003 | $6,289 | $6,508 |
| | | |
Total assets
| $44,034 | $51,926 | $52,145 |
| | | |
Accounts payable
| $4,799 | $5,759 | $5,759 |
Notes payable | $14,176 | $16,784 | $13,188 |
Accrued expenses
| $876 | $1,051 | $1,051 |
Income taxes payable
| $235 | $265 | $255 |
Other current liabilities
| $744 | $893 | $893 |
Total current liabilities
| $20,830 | $24,752 | $21,146 |
| | | |
Common stock at par value
| $15 | $15 | $15 |
Paid in capital in excess of par value | $7,980 | $7,980 | $7,980 |
Retained earnings
| $15,209 | $19,179 | $23,004 |
Total shareholders' equity | $23,204 | $27,174 | $30,999 |
| | | |
Total liabilities & shareholders' equity | $44,034 | $51,926 | $52,145 |
| | | |
Number of shares outstanding | 1,491,662
| 1,491,662
| 1,491,662
|
Sales | |
2011
| 2012 | 2013 | 2014 | 2015 | Total | |
$21,600 | $28,000 | $28,000 | $11,000 | $5,000 | $93,600 | |
$5,648 | $7,322 | $7,322 | $2,877 | $1,308 | $24,476 | |
| | | | | | |
Cash Flow
|
| 2010 | 2011 | 2012 | 2013 | 2014 | 2015 |
Income Before Taxes& SGA
| ($2,200)
| $4,536 | $5,880 | $5,880 | $2,
310 | $1,050 |

Other Expenses |
| ($300)
|
|
|
|
|
SG&A Expenses |
| ($1,806)
| ($2,341)
| ($2,341)
| ($920)
| ($418)
|
Depreciation
|
| $440 | $440 | $440 | $440 | $440 |
Change in Networking Capital | ($5,648) | ($1,674)
| $0 | $4,446 | $1,569 |
$1,308 |
Networking Capital
| $5,648 | $7,322 | $7,322 | $2,877 | $1,308 | $0 |
Total Cash Flow | ($7,848)
| $1,197 | $3,979 | $8,425 | $3,399 | $2,380 |
NPV
| $6,078 | | | | | |
IRR
| 36% | | | | | |
| | | | | | |
Discount Rate: | | | | | |
|
| | | | | |
Beta=Industry Avg: | 1.2
| | | | | |
Risk Free Rate: | 0.037 | | | | | |
Market Risk Premium: | 0.06
| | | | | |
| | | | | |
Expected Return on Equity: | 0.109
| | | | | |
Expected Return on Debt: | 0.0925
| | | | | |
Ideal Debt to Capital Ratio
| 0.18 | | | | | |
Ideal Equity to Capital Ratio | 0.82 | | | | | |
Tax Rate: | 0.4 | | | | | |
WACC: | 0.09937 | | | | | |
Income Statement With Investment ($1000s except earnings per share)
|
| 2010 | 2011 | 2012 |
Net Sales
| $120,000 | $165,600 | $172,000 |
Cost of goods sold
| $97,320 | $133,848 | $138,904 |
Gross Margin
| $22,680 | $31,752 | $33,096 |
| | | |
Research and development
| $6,000 | $8,280 | $8,600 |
Selling, general and administrative
| $10,032 | $13,844 | $14,379 |
Operating Income | $6,648 | $9,628 | $10,117 |
| | | |
Interest expense
| $735 | $1,442 | $1,585 |
Other income (expenses) | $50 | $50 | $50 |
| | | |
Income before income taxes
| $5,863 | $8,136 | $8,481 |
| | | |
Income taxes (at 40%) | $2,345 | $3,254 | $3,393 |
Net income
| $3,518 | $4,882 | $5,089 |
| | | |
Earnings per share
| $2.36 | $2.76 | $2.84 |
| | | |
Balance Sheet With Investment ($1000s except number of shares outstanding) |
| 2010 | 2011 | 2012 |
Cash
| $3,960 | $4,308 | $5,676 |
Accounts receivable
| $19,726 | $27,222 | $28,274 |
Inventories
| $13,865 | $19,069 | $19,789 |
Prepaid expenses
| $6,134 | $2,636 | $688 |
Total current assets | $43,685 | $53,234 | $54,427 |
| | | |
Property, plant & equipment at cost
| $10,382 | $11,282 | $12,182 |
less: Accumulated depreciation | $2,179 | $3,233 | $4,354 |
Net property, plant & equipment | $8,203 | $8,049 | $7,828 |
| | | |
Total assets
| $51,888 | $61,284 | $62,255 |
| | | |
Accounts payable
| $4,799 | $6,601 | $6,850 |

Notes payable | $15,589 | $17,133 | $12,840 |

Accrued expenses
| $876 | $1,209 | $1,256 |
Income taxes payable
| $235 | $325 | $339 |
Other current liabilities
| $744 | $1,027 | $893 |
Total current liabilities
| $22,243 | $26,295 | $22,178 |
| | | |
Common stock at par value
| $18 | $18 | $18 |
Paid in capital in excess of par value | $14,419 | $14,880 | $14,880 |
Retained earnings
| $15,209 | $20,091 | $25,179 |
Total shareholders' equity | $29,646 | $34,989 | $40,077 |
| | | |
Total liabilities & shareholders' equity | $51,888 | $61,284 | $62,255 |
| | | |
Number of shares outstanding | 1,771,605
| 1,791,662
| 1,791,662 |