3rd Session_Tire City Financials (1)

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Exhibit 1 Financial Statements for Tire City, Inc.

For years ending 12/31 1993 1994 1995 1996 1997

INCOME STATEMENT

Net sales $16,230 $20,355 $23,505 $28,206 $33,847

Cost of sales $9,430 $11,898 $13,612 $16,416 $19,699

Gross Profit $6,800 $8,457 $9,893 $11,790 $14,148

Selling, general, and administrative expenses $5,195 $6,352 $7,471 $8,941 $10,730

Depreciation $160 $180 $213 $213 $333.00

Net interest expense $119 $106 $94 $116 $173

Pre-tax income $1,326 $1,819 $2,115 $2,520 $2,913

Income taxes $546 $822 $925 $1,094 $1,264

Net income $780 $997 $1,190 $1,426 $1,649

Dividends $155 $200 $240 $285 $330

BALANCE SHEET

Assets

Cash balances $508 $609 $706 $846 $1,015

Accounts receivable $2,545 $3,095 $3,652 $4,372 $5,246

Inventories $1,630 $1,838 $2,190 $1,625 $3,154

Total current assets $4,683 $5,542 $6,548 $6,843 $9,415

Gross plant & equipment $3,232 $3,795 $4,163 $6,163 $6,563

Accumulated depreciation $1,335 $1,515 $1,728 $1,941 $2,274

Net plant & equipment $1,897 $2,280 $2,435 $4,222 $4,289

Total assets $6,580 $7,822 $8,983 $11,065 $13,704

3



Liabilities

Current maturities $125 $125 $125 $125 $125

Accounts payable $1,042 $1,325 $1,440 $1,777 $2,132

Accrued expenses $1,145 $1,432 $1,653 $1,974 $2,369

Total current liabilities $2,312 $2,882 $3,218 $3,876 $4,627

Long-term debt $1,000 $875 $750 $625 $500

Bank Debt $408 $1,103

Common stock $1,135 $1,135 $1,135 $1,135 $1,135

Retained earnings $2,133 $2,930 $3,880 $5,021 $6,340

Total shareholders' equity $3,268 $4,065 $5,015 $6,156 $7,475

Total liabilities $6,580 $7,822 $8,983 $11,065 $13,704

3



Assumptions:

Sales Growth 20%

COGS 58.20%

Selling, general & distribution 31.70%

Dep. case

tax 43.40%

Dividends 20%

Cash 3%

A/c Recievables 15.50%

Inventory case

Plant & Equipment case

Accumulated Dep. case

Accounts Payable 6.30%

Accrued Expenses 7%

Depreciation Rate 5%

Interest Rate 10%

Percentage of Inventory 0.09

3




For years ending 12/31 1993 1994 1995 1996 1997

INCOME STATEMENT

Net sales $16,230 $20,355 $23,505 $28,206 $33,847

Cost of sales $9,430 $11,898 $13,612 $16,416 $19,699

Gross Profit $6,800 $8,457 $9,893 $11,790 $14,148


Depreciation $160 $180 $213 $213 $333.00


Pre-tax income $1,326 $1,819 $2,115 $2,415 $2,908

Income taxes $546 $822 $925 $1,048 $1,262

Net income $780 $997 $1,190 $1,367 $1,646

Dividends $155 $200 $240 $273 $329

BALANCE SHEET

Assets

Cash balances $508 $609 $706 $846 $1,015


Inventories $1,630 $1,838 $2,190 $2,628 $3,154





Total assets $6,580 $7,822 $8,983 $12,068 $13,704

Liabilities







Long-term debt $1,000 $875 $750 $625 $500

Bank Debt $1,458 $1,152

Common stock $1,135 $1,135 $1,135 $1,135 $1,135






Assumptions:

Sales Growth 20%

COGS 58.20%


Dep. case

tax 43.40%

Dividends 20%

Cash 3%


Inventory case




Accrued Expenses 7%


Interest Rate 10%

0.09

Bank Debt 1458.21 1152.49

5% 998.51 1839.74

6% 703.07 1471.20

7% 407.64 1102.66

8% 112.20 734.13

9% -183.24 365.59

10% -478.68 -2.95

Levels of inventory 1458.21 1152.49

6.00% 478.19 -70.01

7.00% 773.63 298.53



8.00% 1069.07 667.06

9.00% 1364.50 1035.60

10.00% 1659.94 1404.14

11.00% 1955.38 1772.67



What if Dep. Rate is more than 5% for 1997? How does that effect the fund Requirement?


For years ending 12/31 1993 1994 1995 1996 1997

INCOME STATEMENT

Net sales $16,230 $20,355 $23,505 $28,206 $33,847

Cost of sales $9,430 $11,898 $13,612 $16,416 $19,699

Gross Profit $6,800 $8,457 $9,893 $11,790 $14,148


Depreciation $160 $180 $213 $213 $333.00


Pre-tax income $1,326 $1,819 $2,115 $2,415 $2,908

Income taxes $546 $822 $925 $1,048 $1,262

Net income $780 $997 $1,190 $1,367 $1,646

Dividends $155 $200 $240 $273 $329

BALANCE SHEET

Assets

Cash balances $508 $609 $706 $846 $1,015


Inventories $1,630 $1,838 $2,190 $2,628 $3,154





Total assets $6,580 $7,822 $8,983 $12,068 $13,704

Liabilities







Long-term debt $1,000 $875 $750 $625 $500

Bank Debt $1,458 $1,152

Common stock $1,135 $1,135 $1,135 $1,135 $1,135






Assumptions:

Sales Growth 20%

COGS 58.20%


Dep. case

tax 43.40%

Dividends 20%

Cash 3%


Inventory case




Accrued Expenses 7%


Interest Rate 10%

0.09

Level of Dep. 1152.49

6.00% 1138.73

7.00% 1124.98

8.00% 1111.22

9.00% 1097.47



10.00% 1083.71

11.00% 1069.95

What if recievables percentage is higher than % of sales



What if recievables percentage is higher than % of sales?


For years ending 12/31 1993 1994 1995 1996 1997

INCOME STATEMENT

Net sales $16,230 $20,355 $23,505 $28,206 $33,847

Cost of sales $9,430 $11,898 $13,612 $16,416 $19,699

Gross Profit $6,800 $8,457 $9,893 $11,790 $14,148


Depreciation $160 $180 $213 $213 $333.00


Pre-tax income $1,326 $1,819 $2,115 $2,415 $2,908

Income taxes $546 $822 $925 $1,048 $1,262

Net income $780 $997 $1,190 $1,367 $1,646

Dividends $155 $200 $240 $273 $329

BALANCE SHEET

Assets

Cash balances $508 $609 $706 $846 $1,015


Inventories $1,630 $1,838 $2,190 $2,628 $3,154





Total assets $6,580 $7,822 $8,983 $12,068 $13,704

Liabilities







Long-term debt $1,000 $875 $750 $625 $500

Bank Debt $1,458 $1,152

Common stock $1,135 $1,135 $1,135 $1,135 $1,135






Assumptions:

Sales Growth 20%

COGS 58.20%


Dep. case

tax 43.40%

Dividends 20%

Cash 3%


Inventory case




Accrued Expenses 7%


Interest Rate 10%

Percentage of Inventory for last year 9.32%

1996 1997

Higher Level of Recievables 1458.21 1152.49

17% 1901.36 1705.29

18% 2196.80 2073.83

19% 2492.24 2442.37

20% 2787.67 2810.90



21% 3083.11 3179.44

22% 3378.55 3547.98

23% 3673.99 3916.51

24% 3969.42 4285.05

What if payable percentage is lower than % of sales in 1997?



What if payable percentage is lower than % of sales in 1997?


For years ending 12/31 1993 1994 1995 1996 1997

INCOME STATEMENT

Net sales $16,230 $20,355 $23,505 $28,206 $33,847

Cost of sales $9,430 $11,898 $13,612 $16,416 $19,699

Gross Profit $6,800 $8,457 $9,893 $11,790 $14,148


Depreciation $160 $180 $213 $213 $333.00


Pre-tax income $1,326 $1,819 $2,115 $2,415 $2,908

Income taxes $546 $822 $925 $1,048 $1,262

Net income $780 $997 $1,190 $1,367 $1,646

Dividends $155 $200 $240 $273 $329

BALANCE SHEET

Assets

Cash balances $508 $609 $706 $846 $1,015


Inventories $1,630 $1,838 $2,190 $2,628 $3,154





Total assets $6,580 $7,822 $8,983 $12,068 $13,704

Liabilities







Long-term debt $1,000 $875 $750 $625 $500

Bank Debt $1,458 $1,152

Common stock $1,135 $1,135 $1,135 $1,135 $1,135






Assumptions:

Sales Growth 20%

COGS 58.20%


Dep. case

tax 43.40%

Dividends 20%

Cash 3%


Inventory case




Accrued Expenses 7%


Interest Rate 10%


1996 1997

Lower level of Payables 1458.21 1152.49

1% 3024.02 3105.73

2% 2728.59 2737.20

3% 2433.15 2368.66

4% 2137.71 2000.12



5% 1842.28 1631.59




For years ending 12/31 1993 1994 1995 1996 1997

INCOME STATEMENT

Net sales $16,230 $20,355 $23,505 $28,206 $33,847

Cost of sales $9,430 $11,898 $13,612 $16,416 $19,699

Gross Profit $6,800 $8,457 $9,893 $11,790 $14,148


Depreciation $160 $180 $213 $213 $333.00


Pre-tax income $1,326 $1,819 $2,115 $2,520 $2,913

Income taxes $546 $822 $925 $1,094 $1,264

Net income $780 $997 $1,190 $1,426 $1,649

Dividends $155 $200 $240 $285 $330

BALANCE SHEET

Assets

Cash balances $508 $609 $706 $846 $1,015


Inventories $1,630 $1,838 $2,190 $1,625 $3,154





Total assets $6,580 $7,822 $8,983 $11,065 $13,704

Ratio Analysis of



Liabilities





Long-term debt $1,000 $875 $750 $625 $500

Bank Debt $408 $1,103

Common stock $1,135 $1,135 $1,135 $1,135 $1,135




$12,106 $13,964 $15,851 $21,228Purchases



Assumptions:

Sales Growth 20%

COGS 58.20%


Dep. case

tax 43.40%

Dividends 20%

Cash 3%


Inventory case




Accrued Expenses 7%


Interest Rate 10%


1993 1994 1995 1996 1997

Efficiency Ratios

Debtor Turnover Ratio 6.38 6.58 6.44 6.45 6.45

Recievables ( Days) 57.24 55.50 56.71 56.58 56.58

Inventory Turnover Ratio 5.79 6.47 6.22 10.10 6.25

Inventory ( Days) 63.09 56.39 58.72 36.13 58.43

Creditors Turnover Ratio 0.00 9.14 9.70 8.92 9.95

Creditors ( Days) 0.00 39.95 37.64 40.92 36.67

Profitability Ratios

Gross Profit Margin 41.90% 41.55% 42.09% 41.80% 41.80%

Operating Profit Margin 8.90% 9.46% 9.40% 9.34% 9.12%

the forecasted Statement



Net Profit Margin 4.81% 4.90% 5.06% 5.06% 4.87%

Return on Assets (ROA) 11.85% 12.75% 13.25% 12.89% 12.03%

Return on Equity (ROE) 23.87% 24.53% 23.73% 23.17% 22.06%

Liquidity Ratios

Current Ratio 2.03 1.92 2.03 1.77 2.04

Quick Ratio 1.32 1.29 1.35 1.35 1.35

Cash Ratio 0.22 0.21 0.22 0.22 0.22

Leverage Ratios

Interest Coverage Ratio 12.14 18.16 23.50 22.77 17.86

Debt Service Ratio 13.91

Debt to Equity Ratio 0.31 0.22 0.15 0.10 0.07

Documents

3rd Session_Tire City Financials (1)