Financial Analysis

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1. At the beginning of 2009, CanGo purchased the online gaming company. This purchase was for cash, paid for through the proceeds of the IPO and results in goodwill.

2. 90% of the online book sales comes from JIT, the other 10% through the inventory which CanGo possesses. 100% of the CD/DVD/MP3 come through CanGo inventory. The result is that 80% of ALL sales is JIT and 20% is inventory.

3. There is one warehouse for shipping of books and one plant for manufacturing.

4. There are three divisions: a CD/DVD/MP3 division, an online gaming division and a books division. All manufacturing takes place in the CD/DVD/MP3 division.

5. The IPO took place at the beginning of 2009.

6. The CD/DVDs were customized beginning in 2008. The MP3 players were built beginning in the start of 2009.

7. The online gaming company was purchased for $30,000,000 and both Elizabeth and Andrew initiated the process.

8. The company began in 2006, has a VC infusion in 2007 and 2008. It showed a profit in 2008 and 2009. Its only profitable division is the online book sales division.

9. It has some type of international operations, hence the need for a "translation gain or loss" in owner's equity.

10. It has an extraordinary loss from fire and a sale of a segment of its business in 2009.

Balance Sheet

ASSETS	December 31, 2009
Cash	$20,900,000
Marketable Securities	$117,000,000
Accounts Receivable	$33,000,000
Less: Allowance for Bad Debts	$(880,000)
Net Accounts Receivable	$32,120,000

Inventory
Raw Materials	$2,000,000
Work-in-process	$1,000,000
Finished Goods	$5,000,000
Inventory Purchased for Resale	$24,000,000
Total Inventory	$32,000,000

Plant, Property and Equipment	$6,700,000
Less: Accumulated Depreciation	$(320,000)
Net Plant, Property and Equipment	$6,380,000

Prepaid Expenses	$200,000

Goodwill and Other Purchased Intangibles	$28,000,000
Less: Amortization	$(700,000)
Net Goodwill and Other Purchased Intangibles	$27,300,000

Total Assets	$235,900,000

LIABILITIES AND OWNERS' EQUITY
Accounts Payable	$22,000,000
Accrued Advertising	$11,800,000
Other Liabilities and Accrued Expense	$1,400,000
Current Portion of Long-Term Debt	$2,300,000

Long Term Debt	$57,400,000

Preferred Stock, $100 par value per share,
100,000 authorized, 0 shares issued and outstanding	$0

Common Stock, $1 par value per share,
250,000,000 shares authorized, 13,000,000 shares
issued, 12,900,000 outstanding	$13,000,000

Additional Paid-in-Capital in excess of par value, Common Stock	$117,000,000

Treasury Stock	$(1,000,000)

Retained Earnings (less Cash Dividends Paid)	$12,000,000	$11,000,000

Total Liabilities and Owner's Equity	$235,900,000

Income Statement

	December 31, 2009	December 31, 2008
Sales Revenues	$51,000,000	$10,300,000
Less: Sales Returns	$(1,000,000)	$(300,000)
Net Sales Revenues	$50,000,000	$10,000,000
Less: Cost of Goods Sold	$(9,000,000)	$(4,000,000)
Gross Profit	$41,000,000	$6,000,000

Operating Expenses:
Advertising and Sales	$(26,000,000)	$(3,000,000)
Depreciation	$(160,000)
Salaries and Wages	$(1,700,000)	$(1,400,000)
Product Development	$(4,000,000)	$(1,200,000)
Merger and Acquisition Related Costs, including
Amortization of Goodwill and Other Intangibles	$(700,000)	$0
Total Operating Expenses	$(32,560,000)

Income from Continuing Operations Before Income Taxes	$8,440,000

Less: Income Taxes at 35%	$(2,954,000)
Income from Continuing Operations	$5,486,000

Discontinued Operations:
Income from Operations of Discontinued Division
(less applicable income taxes)	$350,000
Loss on Disposal of Discontinued Division
(less applicable income taxes)	$(150,000)
Total Gain from Discontinued Operations	$200,000

Extraordinary Items:
Loss from fire (less applicable income taxes)	$(200,000)

Net Income	$5,486,000

Divisional Revenues
Books	$15,000,000	$7,000,000
Online gaming	$25,000,000
Customized MP3/CD/DVD	$10,000,000	$3,000,000
Customized MP3/CD/DVD Inventory at end of 2009	$8,000,000

CanGo, Inc. is a fictional Internet company that exists to support the Mastering Series project.