Financial Statement Information

Group4OLsection342016 2015 2014

Accounts payable $ 6,556 $ 6,556
Accounts receivable $ 176,927 $ 87,000
Amortization expense $ 38,000 $ 38,000
Cash $ 194,928 $ 105,000
Common stock $ 100,000 $ 100,000
Net Sales $ 1,125,000 $ 870,000
Notes payable $ 17,000 $ 55,000
Prepaid expenses $ 14,000 $ 14,000
Office Equipment $ 255,500 $ 255,500
Salaries & Commissions $ 216,000 $ 180,000
Office overhead expenses $ 7,893 $ 7,893
Supplies $ 22,500 $ 17,400
Subcontract fees $ 21,091 $ 19,877
Professional Fees $ 9,111 $ 9,111
Advertising $ 27,060 $ 27,060
Misc. Expense $ 26,871 $ 26,871
Direct Wages and Expenses $ 450,000 $ 348,000
Common Stock Dividends $ 50,000 $ 20,000
Accrued Liabilities $ 8,667 $ 8,667
Accumulated Amortization $ 159,000 $ 121,000
Income Tax Expense $ 76,619 $ 48,947
Opening Retained Earnings 2014 $ 43,436

#REF!

#N/A

'project data'!b
 Other Information that may be useful for ratio analysis
Other Info 2015 2014
# of Common Stock 250000 shares 250000 shares
Industry ratios have
Market share price $ 2.90 per share 2.25 per share provided on ratio tab

Opening Accounts Receivable 76,000

Income tax rate 25% 25%

Other Information that may be useful for 2016 budgeting purposes

General: Assume for budgeting purposes that the loan was approved your group took over the business January 1, 2

Sales:
Average revenue per placement is expected to stay the same for 2016 at $15,000 per placement. However
number of placements are expected to increase by 15% in 2016. The strongest months are September and
where 15% of the annual business is done each of those months. The slowest months are June, July and
December where 4% of the annual business is done in each of those months. The rest of the business is s
out evenly over the rest of the months.

Collections: Sales are all sold on account. 50% of sales are collected in the month after the sale, 25% in the second mo
the sale and 25% in the 3rd month after the sale. Assume all sales are collected (no bad debts). For closin
accounts receivable assume 50% will be collected in January and 50% in February.

Direct Wages: Direct wages in 2016 are expected to continue to be 40% of sales. LFPA pays their employees semi-monthl
that 50% of the wages are paid in the month they are earned and 50% are paid in the month following the m
which they are earned.

Other Expenses:
The cost behaviour for all other expenses are expected to remain the same for 2016 as they were for 2015
2014. Note that some of these expenses are fixed in nature, some are variable and some are mixed. In ad
assume that these expenses are paid in the month they are incurred. Fixed expenses should be allocated e
over the 12 months, variable expenses will vary each month based on sales. Mixed expenses need to be se
into their fixed and variable components and then allocated accordingly.

Dividends: Your group, once the purchase has been completed, expects to pay out dividends of $15,000 to each owne
group members=5 owners, 4 group members=4 owners). Dividends will be paid out in December 2016.

Financing: For the purpose of the budget assume the interest rate negotiated on the $500,000 loan is 5% and is payab
monthly. In addition there are no payments to pay down the loan in 2016. Loan principal payments are to s
2017 at an amount of $8,500 per month. Assume that the note payable of $68,000 is paid off using money
from the loan (so no interest expense related to the note payable)

Equipment: In September of 2016 LFPA is expecting to replace its computer equipment in the office. The expected cos
$75000. Assume it will be paid in cash when purchased.
ysis

Industry ratios have been

provided on ratio tab

purposes

er the business January 1, 2016.

00 per placement. However the

t months are September and March
months are June, July and
The rest of the business is spread

sale, 25% in the second month after

d (no bad debts). For closing 2015
uary.

heir employees semi-monthly such

in the month following the month in

2016 as they were for 2015 and

and some are mixed. In addition
penses should be allocated evenly
xed expenses need to be separated

ds of $15,000 to each owner (5

d out in December 2016.

000 loan is 5% and is payable

n principal payments are to start in
000 is paid off using money received

he office. The expected cost is

Group4OLsection342016
Leap Forward Placement Agency
Income Statement Horizon
For the Year Ended December 31st tal Vertical
2015 2014 analysis analysis

Revenues
Revenues
Net Sales $ 1,125,000 $ 870,000 29% 100%
Total Revenues $ 1,125,000 $ 870,000 29%

Expenses
Supplies $22,500 $17,400 29% 2%
Direct Wages & Expenses $450,000 $348,000 29% 40%
Salaries & Commissions $216,000 $180,000 20% 19%
Office Overhead Expense $7,893 $7,893 0% 1%
Amortization Expense $38,000 $38,000 0% 3%
Advertising $27,060 $27,060 0% 2%
Subcontract Fees $21,091 $19,877 6% 2%
Profesional Fees $9,111 $9,111 0% 1%
Misc. Expense $26,871 $26,871 0% 2%
Income Tax Expenses $76,619 $48,947 57% 7%
Total Expenses $ 895,145 $ 723,159 24% 80%

Net Income $ 229,855 $ 146,841 57% 20%

 2016
(projected)

$ 1,293,750
$ 1,293,750

$ 25,875
$517,500
$239,066
$ 7,893
$ 38,000
$ 27,060
$ 25,875
$ 9,111
$ 26,871
$ 80,625
$ 997,876

$ 295,874
Group4OLsection342016
Leap Forward Placement Agency
Statement of Retained Earnings
For the Year Ended December 31st
2015 2014
Retained Earnings $148,384 $43,436
Add: Net Income $229,855 $146,841
Subtract Dividends $50,000 $20,000
Retained Earnings, Ending December 31 $ 350,132 $ 170,277
 Leap Forward Placement Agency
Balance Sheet Horizon
As At December 31st tal
2015 2014 analysis
Assets:
Current Assets:
Cash $ 194,928 $ 105,000 86%
Accounts Recievable $176,927 $87,000 103%
Prepaid Expense $14,000 $14,000 0%
Total Current Assets: $385,855 $206,000 87%

Long Term Assets:

Office Equipment $ 255,500 $255,500.00 0%
Less: Accumulated Amortization -$159,000 -$121,000 31%
Total Assets $ 482,355 $ 340,500 42%

Liabilities:
Accounts Payable $ 6,556 $ 6,556 0%
Notes Payable $17,000 $55,000 -69%
Accrued Liabilities $8,667 $8,667 0%
Total Liabilities $32,223 $70,223 -54%

Sharholders' Equity
Common Stock 100,000 100,000 0%
Retained Earnings 350,132 170,277 106%
Total Shareholders' Equity 450,132 270,277 67%
Total Liabilites & Shareholders' Equity $ 482,355 $ 340,500 42%

updated March 11, 2016 by Rebecca

Vertical
analysis

40%
37%
3%
80%

53%
-33%
100%

1%
4%
2%
7%

21%
73%
93%
100%
 Group4OLsection342016

2015
Current Assets
Current Ratio 11.97
Current Liab

Current Assets-Inventory
Quick Ratio 11.97
Current Liab

Net Income
Gross Margin 20.4%
Revenue

Net Income
Return on Shareholders Equity 51%
Shareholder equity

Net Credit Sales

Receivable Turnover 8.53
Avge Account Rxable

365
Average Collection Period 42.8
Receivable turnover

Net Income
Earnings Per Share $0.92
No of Share outstanding

Dividend per share

Dividend Yield 6.9%
Share Price

Share Price
P/E Ratio 3.15
Earning per share

Total Debt
Debt to Equity Ratio 0.07
Total Equity

Net Income
Return on Assets 48%
Total Assets

#REF!+H24+#REF!)/sn
2014 Industry

2.93 1.90

2.93 1.70

16.9% 37.9%

54% 27%

10.67 5.89

34.2 62.0

$0.59 $1.25

3.6% 4.0%

3.83 6.20

0.26 1.30

43% 12.3%
 Group4OLsection342016

Leap Forward Placement Agency

Breakeven and Target Profit Calculations

Variable expenses per placement

Fixed Expenses in total

Annual Breakeven in placements sold

Annual Breakeven in $

# of Placements for target profit of $ 200,000

# of Placements for target profit of $ 400,000

# of Placements for target proift of $ 600,000

10% increase in sales for 2017 will mean what increase in 2017 net income

###
###
ons

2016
projected
 Month January February March
% sold each month ==> 8% 8% 16%
Opening Cash Balance $ 194,928 $ 698,768$759,325
Inflows
Total Sales 103,500 ### 207,000
Collections Current month 51,750 51,750
Collections First month 25,875
Collections Second month
Accounts Recevable 88,463 ###
Loan 500,000
Total Inflows 588,463 ### 77,625

Outflows
Payment current 20,700 ### 41,400
payment 1st month 20,700 20,700
Loan Interest 2,083 ### 2,083
Office Overhead 658 ### 658
Supplies 2,070 ### 4,140
Advertising 2,255 ### 2,255
Professional Fees 759 ### 759
Subcontract Fees 2,156 ### 2,156
Misc 2,239 ### 2,239
Salaries & Commission 19,316 ### 33,867
Taxes 6,719 ### 6,719
Dividends - - -
Equipment - - -
Notes Payable 17,000
Accrued Liabilities 8,667
Total Outflows 84,623 79,656 116,977
Net Cash Flow 503,840 60,557 - 39,352
Cash Balance $ 698,768 $ 759,325$719,973
 Leap Forward Placement Agency
April May June July August Sept Oct Nov
8% 8% 4% 4% 8% 16% 8% 8%
$719,973 $774,867 $824,586 $ 892,966 $ 919,946 $ 915,327 $ 800,974 $ 842,930

103,500 103,500 51,750 51,750 103,500 207,000 103,500 103,500

### 51,750 51,750 25,875 ### 51,750 103,500 51,750
25,875 51,750 25,875 25,875 12,937 12,937 25,875 51,750
25,875 25,875 51,750 25,875 ### 12,937 12,937 25,875

155,250 129,375 129,375 77,625 64,687 77,624 142,312 129,375

20,700 20,700 10,350 10,350 20,700 41,400 20,700 20,700

41,400 20,700 20,700 10,350 ### 20,700 41,400 20,700
2,083 2,083 2,083 2,083 ### 2,083 2,083 2,083
658 658 658 658 ### 658 658 658
2,070 2,070 1,035 1,035 2,070 4,140 2,070 2,070
2,255 2,255 2,255 2,255 ### 2,255 2,255 2,255
759 759 759 759 ### 759 759 759
2,156 2,156 2,156 2,156 ### 2,156 2,156 2,156
2,239 2,239 2,239 2,239 ### 2,239 2,239 2,239
19,316 19,316 12,040 12,040 19,316 33,867 19,316 19,316
6,719 6,719 6,719 6,719 ### 6,719 6,719 6,719
- - - - - - - -
- - - - - 75,000 - -

100,356 79,656 60,995 50,645 69,306 191,977 100,356 79,656

54,894 49,719 68,380 26,980 - 4,619 $ (114,353) 41,956 49,719
$774,867 $824,586 $892,966 $ 919,946 $ 915,327 $ 800,974 $ 842,930 $892,649
 Dec Total
4% 100%
$ 892,649

51,750 $ 1,293,750
51,750 $ 621,000
25,875 $ 284,624
51,750 $ 258,749
$ 176,926
$ 500,000
129,375 1,841,299

10,350 $ 258,750
20,700 $ 248,400
2,083 $ 25,000
658 $ 7,894
1,035 $ 25,875
2,255 $ 27,060
759 $ 9,111
2,156 $ 25,875
2,239 $ 26,871
12,040 $ 239,066
6,719 $ 80,625
75,000 $ 75,000
- $ 75,000
$ 17,000
$ 8,667
135,995 $ 1,150,194
- 6,620
$ 886,029 $ 886,029