Assumptions:

Sales growth rate 20%

COGS/Sales 53.26%
Operating expense/Sales 28.43%
Interest expense/Sales 5.19%
Tax rate 40%

Hanson Industries
Income Statement (1979-1983)
(in $000)

1979 1980 1981

Revenue $ 13,095 $ 15,714 $ 18,857

COGS $ 6,974 $ 8,369 $ 10,042
Gross Margin $ 6,121 $ 7,345 $ 8,814
Less: Operating Expenses $ 3,723 $ 4,467 $ 5,361
Operating Earnings $ 2,398 $ 2,878 $ 3,453
Less: Interest Expense $ 680 $ 816 $ 979
Income Before Taxes $ 1,719 $ 2,062 $ 2,475
Taxes $ 687 $ 824.93 $ 990
Net Income $ 1,031 $ 1,237 $ 1,485

Assumptions:
Account Receivables/Sales 15.50%
Inventory/Sales 20.00%
Account Payable in 1979 $ 944
Account Payable/Sales (1980-1983) 10.13%
Prepaid expenses/Sales 2.68%
Annual capital expenditures $ 500
Depreciation $ 500

Hanson Ski Industries

Balance Sheet (1979-1983)
(in $000)

1979 1980 1981

Current assets: 104% 45% 37%

Cash $ 598 $ 1,217 $ 1,767
Accounts receivable $ 2,030 $ 2,436 $ 2,923
 Inventories $ 2,619 $ 3,143 $ 3,771
Prepaid expenses $ 351 $ 421 $ 505
Total current assets $ 5,598 $ 7,217 $ 8,967
Fixed assets:
Property, plant & equipment $ 2,638 $ 2,638 $ 2,638
Less: Accumulated depreciation $ 500 $ 500 $ 500
Net fixed assets $ 2,138 $ 2,138 $ 2,138
Total assets $ 7,736 $ 9,355 $ 11,105
21% 19% 19%
Liabilities:
Accounts payable $ 944 $ 1,326 $ 1,591
Notes payable $ 4,005 $ 4,005 $ 4,005
Total liabilities $ 4,949 $ 5,331 $ 5,596
Stockholder's equity:
Capital stocks $ 1,354 $ 1,354 $ 1,354
Retained earnings $ 1,433 $ 2,671 $ 4,155
Total equity $ 2,787 $ 4,025 $ 5,509
Total liabilities & Stockholder's Equity $ 7,736 $ 9,355 $ 11,105

1978 1979 1980 1981

Net working capital $ 2,603 $ 4,056 $ 4,674 $ 5,608

Change in working capital $ 1,453 $ 618 $ 935

Less: Change in Retained earnings $ 1,031 $ 1,237 $ 1,485
Outside funds needed $ 422 $ (619) $ (550)
 1982 1983

$ 22,628 $ 27,154
$ 12,051 $ 14,461
$ 10,577 $ 12,693
$ 6,433 $ 7,720
$ 4,144 $ 4,973
$ 1,174 $ 1,409
$ 2,970 $ 3,564
$ 1,188 $ 1,425
$ 1,782 $ 2,138

1982 1983

33% 55%
$ 2,427 $ 3,219
$ 3,507 $ 4,209
$ 4,526 $ 5,431
$ 606 $ 728
$ 11,066 $ 13,586

$ 2,638 $ 2,638
$ 500 $ 500
$ 2,138 $ 2,138
$ 13,204 $ 15,724
19% 19%

$ 1,909 $ 2,291
$ 4,005 $ 4,005
$ 5,914 $ 6,296

$ 1,354 $ 1,354
$ 5,937 $ 8,075
$ 7,291 $ 9,429
$ 13,206 $ 15,726

1982 1983
$ 6,730 $ 8,076

$ 1,122 $ 1,346
$ 1,782 $ 2,138
$ (660) $ (792)