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Notes & Questions

Financial Statements

ABC CompanyBALANCE SHEET

As of December 31, 2009

For Internal Management Use OnlyStatement is for presentation only and does not represent actual or accurate financial information

ASSETS

CURRENT ASSETSCash on Hand $ 43,435.26Cash in Checking 97,501.89Cash in Savings 1,125,572.85Operating Account 172,559.94Accounts Receivable 34,143.74Inventory 609,164.26

Total Current Assets 2,082,377.94

PROPERTY AND EQUIPMENTFixtures & Equipment 735,791.27Buildings 359,070.29

Less: Accumulated Depreciation (784,523.27)

Net Property and Equipment 310,338.29

TOTAL ASSETS $ 2,392,716.23

ABC CompanyBALANCE SHEET

As of December 31, 2009

For Internal Management Use OnlyStatement is for presentation only and does not represent actual or accurate financial information

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIESAccounts Payable $ 1,950.00Payroll Payable 8,815.50Fed & FICA W/H Payable 923.90FUTA Payable 287.49SUTA Payable 90.43Sales Tax Payable 5,123.91

Total Current Liabilities 17,191.23

LONG-TERM LIABILITIES

Total Liabilities 17,191.23

STOCKHOLDERS' EQUITYCapital Stock 1,135,544.56Beginning Retained Earnings 912,016.33Net Income (Loss) 327,964.11

Total Stockholders' Equity 2,375,525.00

TOTAL LIABILITIES ANDSTOCKHOLDERS' EQUITY $ 2,392,716.23

ABC CompanyINCOME STATEMENT

December 31, 2009

For Internal Management Use OnlyStatement is for presentation only and does not represent actual or accurate financial information

1 Month Ended 1 Month Ended 12 Months Ended 12 Months Ended12/31/09 12/31/08 12/31/09 12/31/08

SalesSale of Product $ 1,482,468.53 100 $ 360,863.90 100 $ 4,876,639.15 100 $ 4,239,516.53 100Less Returns & Allowances 0.00 0.0 0.00 0.0 0.00 0.0 0.00 0.0

Total Sales 1,482,468.53 100 360,863.90 100 4,876,639.15 100 4,239,516.53 100

Cost of Goods SoldPurchase - Product 265,328.06 17.9 296,160.80 82.1 3,493,193.80 71.6 3,360,862.46 79.3Freight 2,543.18 0.2 2,862.63 0.8 38,035.42 0.8 35,387.71 0.8

Total Cost of Goods Sold 267,871.24 18.1 299,023.43 82.9 3,531,229.22 72.4 3,396,250.17 80.1

Gross Profit 1,214,597.29 81.9 61,840.47 17.1 1,345,409.93 27.6 843,266.36 19.9

Operating ExpensesLabor Expense 52,777.83 3.6 44,511.09 12.3 558,206.47 11.4 511,987.68 12.1Payroll Tax 4,676.77 0.3 4,155.95 1.2 49,193.52 1.0 44,057.94 1.0Advertising 1,973.88 0.1 1,671.26 0.5 45,013.06 0.9 25,064.39 0.6Automobile Expense 0.00 0.0 148.38 0.0 5,104.88 0.1 1,462.54 0.0Credit, Debit, EBT Card Fees 1,386.93 0.1 0.00 0.0 18,210.45 0.4 3,759.69 0.1Depreciation 6,816.76 0.5 8,534.50 2.4 104,326.53 2.1 134,165.37 3.2Dues & Subscriptions 156.50 0.0 240.00 0.1 2,884.79 0.1 885.00 0.0Electric 2,770.81 0.2 2,918.63 0.8 31,393.62 0.6 32,403.69 0.8Gas -Questar 877.23 0.1 1,159.34 0.3 7,399.08 0.2 10,615.93 0.3Insurance 18,481.40 1.2 6,053.00 1.7 68,900.82 1.4 89,158.40 2.1Janitorial Expense 979.00 0.1 775.00 0.2 9,526.47 0.2 9,455.18 0.2Repairs and Maint Bldgs 1,518.00 0.1 0.00 0.0 17,546.73 0.4 26,371.27 0.6Repairs and Maint Equip 2,222.50 0.1 1,246.06 0.3 69,768.57 1.4 15,110.97 0.4Rent 6,000.00 0.4 2,000.00 0.6 30,000.00 0.6 22,000.00 0.5Telephone 361.65 0.0 370.75 0.1 3,764.13 0.1 3,888.71 0.1Travel 192.95 0.0 192.95 0.1 2,799.40 0.1 3,919.50 0.1Water 181.50 0.0 0.00 0.0 3,702.75 0.1 0.00 0.0

Total Operating Expenses 101,373.71 6.8 73,976.91 20.5 1,027,741.27 21.1 934,306.26 22.0

Operating Income (Loss) 1,113,223.58 75.1 (12,136.44) (3.4) 317,668.66 6.5 (91,039.90) (2.1)

Total Other Income (Loss) 0.00 0.0 0.00 0.0 10,295.45 0.2 10,017.58 0.2

Net Income (Loss) $ 1,113,223.58 75.1 $ (12,136.44) (3.4) $ 327,964.11 6.7 $ (81,022.32) (1.9)

ABC CompanySTATEMENT OF CASH FLOWS

For the 1 Month and 12 Months Ended December 31, 2009

For Internal Management Use OnlyStatement is for presentation only and does not represent actual or accurate financial information

For the Month Ended For the Year Ended

December 31, 2009 December 31, 2009

CASH FLOWS FROM OPERATING ACTIVITIESNet Income (Loss) $ 1,113,223.58 $ 327,964.11Adjustments to reconcile Net Income(Loss) to net Cash provided by(used in) operating activities:Depreciation and Amortization 6,816.76 104,326.53Losses (Gains) on sales ofFixed Assets 0.00 595,000.00Decrease (Increase) in Operating Assets:Accounts Receivable 1,629.48 (9,081.07)Inventory (378,822.61) (381,648.25)Increase (Decrease) inOperating Liabilities:Accounts Payable (15,000.00) (108,050.00)Accrued Liabilities (3,159.07) 2,236.69Total Adjustments (388,535.44) 202,783.90

Net Cash Provided By (Used in)Operating Activities 724,688.14 530,748.01

CASH FLOWS FROM INVESTING ACTIVITIESPurchase Of Fixed Assets 0.00 (3,699.63)Proceeds From Sale of Fixed Assets 0.00 0.00

Net Cash Provided By (Used In)Investing Activities 0.00 (3,699.63)

CASH FLOWS FROM FINANCING ACTIVITIESShareholder Capital Contributions 53,183.24 511,853.10

Net Cash Provided By (Used In)Financing Activities 53,183.24 511,853.10

NET INCREASE (DECREASE) IN CASHAND CASH EQUIVALENTS 777,871.38 1,038,901.48

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 661,198.56 400,168.46

CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,439,069.94 $ 1,439,069.94

ABC CompanyINCOME STATEMENT

12 Month Comparison For 2009

For Internal Management Use Only

Statement is for presentation only and does not represent actual or accurate financial information

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD TotalSalesSale of Product 320,895 284,872 330,115 315,907 352,566 343,211 389,925 35,698 369,844 350,581 300,559 1,482,469 4,876,639Less Returns & Allowances 0 0 0 0 0 0 0 0 0 0 0 0 0

Total Sales 320,895 284,872 330,115 315,907 352,566 343,211 389,925 35,698 369,844 350,581 300,559 1,482,469 4,876,639

Cost of Goods SoldPurchase - Product 223,315 242,129 407,433 230,243 261,146 243,422 326,254 527,717 305,189 233,094 227,924 265,328 3,493,194Freight 2,741 2,377 2,481 3,282 3,396 3,330 4,634 2,817 4,527 2,641 3,267 2,543 38,035

Total COGS 226,056 244,506 409,914 233,525 264,542 246,752 330,888 530,534 309,716 235,735 231,191 267,871 3,531,229

Gross Profit 94,839 40,366 (79,799) 82,382 88,024 96,459 59,037 (494,836) 60,128 114,846 69,368 1,214,598 1,345,410

Operating ExpensesLabor Expense 38,844 39,701 39,070 58,258 38,826 56,652 40,448 48,906 61,135 42,426 41,164 52,778 558,206Payroll Tax 3,299 3,328 3,154 4,699 3,130 5,163 3,233 3,564 4,747 6,195 4,006 4,677 49,194Advertising 2,080 1,961 2,351 3,168 13,164 2,246 4,792 1,671 2,935 4,577 4,096 1,974 45,013Automobile Expense 133 519 450 556 1,522 550 105 659 128 187 296 0 5,105Credit, Debit, EBT Card Fees 0 2,148 5,224 13 10 1,435 2,199 (177) 2,691 1,674 1,605 1,387 18,210Depreciation 5,901 3,513 40,724 7,375 5,035 9,697 7,976 1,845 3,987 7,940 3,518 6,817 104,327Dues & Subscriptions 150 0 0 692 360 0 500 456 0 0 571 157 2,885Electric 960 210 5,116 2,490 2,775 3,724 3,536 0 3,629 3,147 3,036 2,771 31,394Gas -Questar 1,418 975 736 535 313 280 555 474 393 554 289 877 7,399Insurance 4,930 5,663 (1,477) 15,351 (1,291) 6,224 10,361 4,170 (2,021) 6,430 2,079 18,481 68,901Janitorial Expense 620 620 775 1,034 620 819 627 775 947 687 1,023 979 9,526Repairs and Maint Bldgs 1,042 128 210 114 0 6,575 7,062 0 232 361 307 1,518 17,547Repairs and Maint Equip 17 180 89 194 1,111 3,675 59,605 263 0 621 1,792 2,223 69,769Rent 2,000 2,000 2,000 2,000 2,000 2,000 2,000 0 0 6,000 4,000 6,000 30,000Telephone 349 338 358 414 338 287 347 0 343 325 303 362 3,764Travel 193 193 193 193 193 677 193 193 193 193 193 193 2,799Water 2,017 0 204 183 189 0 182 191 186 189 182 182 3,703

Total Operating Expense 63,953 61,477 99,177 97,269 68,295 100,004 143,721 62,990 79,525 81,506 68,460 101,376 1,027,742

Operating Inc (Loss) 30,886 (21,111) (178,976) (14,887) 19,729 (3,545) (84,684) (557,826) (19,397) 33,340 908 1,113,222 317,668

Net Income (Loss) $ 30,886 $ (21,111) $(165,801) $ (14,887) $ 19,729 $ (3,545) $ (84,684) $(557,226) $ (18,397) $ 33,340 $ 908 $1,113,222 $ 332,443

Charts & Graphs

Apr

May

Jun

Jul

Aug

Sept

Oct

-$120,000

-$100,000

-$80,000

-$60,000

-$40,000

-$20,000

$0

$20,000

$40,000

Net IncomeApril - October

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

Apr May Jun Jul Aug Sep Oct

COGS Compared to Sales

Total Income

Total COGS

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

$180,000

Apr May Jun Jul Aug Sep Oct

Monthly ExpensesApril - October

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

Apr May Jun Jul Aug Sep Oct

Monthly IncomeApril - October

Advertising & Marketing

15%Bad Debt

7%

Corporate Office10%

Payroll37%

Misc 2%Phones & Internet

1%

Sales Expense6%

Sponsorships5%

Warehouse & Shipping

13%

Other4%

Expenses

Financial Analysis

Report prepared for: ABC Company Industry: Sporting Goods Retail Revenue: $1M - $10M Periods: 3 months against the same 3 months from the previous year

LIQUIDITY PROFITS & PROFIT MARGIN SALES BORROWING ASSETS EMPLOYEES

INDUSTRY-SPECIFIC PERFORMANCE RATIOS

What are the Key Performance Indicators for the business? This section of the report provides Key Performance Indicators (or KPIs) for the business being analyzed. A KPI can be either a financial or a non-financial metric, but it is typically a number or ratio that is easily obtained and tracked by the business as an early indicator of how well it is performing. The ratio calculations, graphs, and benchmarks displayed below are specific to the particular industry this business operates in. Tracking these KPIs over time as a trend and also as they relate to the industry comparison benchmark can help lead to more effective management of the business, although it is important to be aware that a KPI may be more of a rough measure of effectiveness than a precise indicator.

Average Weekly Sales = Sales* / 52 Average Sales per Customer Transaction = Sales /

Number of Customer Transactions

INDUSTRY SCORECARD

Financial Indicator Current Period Industry RangeDistance from

Industry

Current Ratio 4.37 1.70 to 2.90 +50.69%= Total Current Assets / Total Current Liabilities

Explanation: Generally, this metric measures the overall liquidity position of a company. It is certainly not a perfect barometer, but it is a good one. Watch for big decreases in this number over time. Make sure the accounts listed in "current assets" are collectible. The higher the ratio, the more liquid the company is.

Quick Ratio 3.50 0.70 to 1.40 +150.00%= (Cash + Accounts Receivable) / Total Current Liabilities

Explanation: This is another good indicator of liquidity, although by itself, it is not a perfect one. If there are receivable accounts included in the numerator, they should be collectible. Look at the length of time the company has to pay the amount listed in the denominator (current liabilities). The higher the number, the stronger the company.

Inventory Days* 24.76 Days 15.00 to 45.00 Days 0.00%= (Inventory / COGS) * 365

Explanation: This metric shows how much inventory (in days) is on hand. It indicates how quickly a company can respond to market and/or product changes. Not all companies have inventory for this metric. The lower the better.

Accounts Receivable Days* 2.04 Days 1.00 to 5.00 Days 0.00%= (Accounts Receivable / Sales) * 365

Explanation: This number reflects the average length of time between credit sales and payment receipts. It is crucial to maintaining positive liquidity. The lower the better.

Accounts Payable Days* 25.14 Days 5.00 to 30.00 Days 0.00%= (Accounts Payable / COGS) * 365

Explanation: This ratio shows the average number of days that lapse between the purchase of material and labor, and payment for them. It is a rough measure of how timely a company is in meeting payment obligations. Lower is normally better.

Gross Profit Margin 21.97% 20.00% to 32.00% 0.00%= Gross Profit / Sales

Explanation: This number indicates the percentage of sales revenue that is paid out in direct costs (costs of sales). It is an important statistic that can be used in business planning because it indicates how many cents of gross profit can be generated by each dollar of future sales. Higher is normally better (the company is more efficient).

Net Profit Margin -8.52% 0.50% to 4.00% -1,804.00%= Adjusted Net Profit before Taxes / Sales

Explanation: This is an important metric. In fact, over time, it is one of the more important barometers that we look at. It measures how many cents of profit the company is generating for every dollar it sells. Track it carefully against industry competitors. This is a very important number in preparing forecasts. The higher the better.

Interest Coverage Ratio N/A 5.00 to 10.00 N/A= EBITDA / Interest Expense

Explanation: This ratio measures a company's ability to service debt payments from operating cash flow (EBITDA). An increasing ratio is a good indicator of improving credit quality. The higher the better.

Debt-to-Equity Ratio 0.50 1.00 to 2.50 +50.00%= Total Liabilities / Total Equity

Explanation: This Balance Sheet leverage ratio indicates the composition of a company’s total capitalization -- the balance between money or assets owed versus the money or assets owned. Generally, creditors prefer a lower ratio to decrease financial risk while investors prefer a higher ratio to realize the return benefits of financial leverage.

Industry Comparison

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

12/31/2005 12/31/2006 12/31/2007 12/31/2008 Industry

Current Ratio

Liquidity Ratios

0.00

0.20

0.40

0.60

0.80

1.00

1.20

12/31/2005 12/31/2006 12/31/2007 12/31/2008 Industry

Quick Ratio

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

12/31/2005 12/31/2006 12/31/2007 12/31/2008 Industry

Debt-to-Equity Ratio

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

12/31/2005 12/31/2006 12/31/2007 12/31/2008 Industry

Interest Coverage Ratio

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

12/31/2005 12/31/2006 12/31/2007 12/31/2008

Debt Leverage Ratio

Financial Leverage / Coverage Ratios

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

12/31/2005 12/31/2006 12/31/2007 12/31/2008 Industry

Gross Prof it Margin

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

5.00%

12/31/2005 12/31/2006 12/31/2007 12/31/2008 Industry

Net Prof it Margin

-10.00%

-8.00%

-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12/31/2005 12/31/2006 12/31/2007 12/31/2008 Industry

Return on Assets

Profitability Ratios

0.00

10.00

20.00

30.00

40.00

50.00

60.00

12/31/2005 12/31/2006 12/31/2007 12/31/2008 Industry

Accounts Receivable Days

0.00

10.00

20.00

30.00

40.00

50.00

60.00

12/31/2005 12/31/2006 12/31/2007 12/31/2008 Industry

Accounts Payable Days

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

12/31/2005 12/31/2006 12/31/2007 12/31/2008 Industry

Inventory Days

Activity / Efficiency Ratios