Business Management Final

Round: 2 Dec. 31, 2015 C58538

Andrews Eugene Ellis Philip Mull

Baldwin Lisa Chastain Monica Dalke matt rix

Chester

Digby Erie Ferris

Selected Financial Statistics Andrews Baldwin Chester Digby Erie Ferris

ROS -17.5% -3.1% 7.6% 7.5% 6.9% 7.3% Asset Turnover 0.50 0.97 1.26 1.19 1.02 1.33 ROA -8.7% -3.0% 9.6% 9.0% 7.0% 9.6% Leverage (Assets/Equity)

4.6 2.1 2.0 2.0 2.0 2.0

ROE -40.1% -6.4% 18.7% 17.7% 14.3% 19.1% Emergency Loan $90,856,063 $0 $0 $0 $0 $0 Sales $84,906,613 $101,934,574 $160,473,126 $164,573,195 $126,745,923 $141,932,500 EBIT ($4,019,505) $575,275 $25,536,640 $26,615,239 $20,679,294 $21,642,788 Profits ($14,819,574) ($3,131,651) $12,120,371 $12,397,854 $8,787,171 $10,296,970 Cumulative Profit ($15,705,998) $5,376,139 $21,409,632 $24,098,279 $18,874,712 $22,067,437 SG&A / Sales 13.0% 11.5% 10.0% 11.3% 8.9% 12.5% Contrib. Margin % 16.7% 19.5% 30.7% 32.2% 31.3% 31.4%

CAPSTONE® COURIER Page 1

Stock & Bonds C58538 Round: 2Dec. 31, 2015

Stock Market Summary

Company Close Change Shares MarketCap

($M) Book Value EPS Dividend Yield P/E

Andrews $1.00 ($16.30) 2,291,939 $2 $16.14 ($6.47) $0.00 0.0% -0.1 Baldwin $24.19 ($14.61) 2,000,000 $48 $24.56 ($1.57) $0.00 0.0% -15.5 Chester $55.14 $14.77 2,069,366 $114 $31.29 $5.86 $1.35 2.4% 9.4 Digby $59.71 $14.57 2,050,451 $122 $34.12 $6.05 $0.00 0.0% 9.9 Erie $49.42 $7.56 2,128,085 $105 $28.94 $4.13 $2.55 5.2% 12.0 Ferris $55.88 $10.61 2,000,000 $112 $26.93 $5.15 $2.13 3.8% 10.8

Bond Market Summary Company Series# Face Yield Close$ S&P Company Series# Face Yield Close$ S&P Andrews Digby

12.5S2017 $10,924,506 12.9% 97.21 DDD 12.5S2017 $13,828,904 12.4% 100.51 B 14.0S2019 $20,850,000 14.1% 99.42 DDD 14.0S2019 $20,850,000 13.3% 105.44 B

Baldwin 11.6S2025 $3,523,690 12.0% 96.64 B 12.5S2017 $13,900,000 12.5% 99.83 CCC Erie 14.0S2019 $20,850,000 13.4% 104.20 CCC 12.5S2017 $13,900,000 12.5% 100.34 B

Chester 14.0S2019 $20,850,000 13.3% 105.13 B 12.5S2017 $13,900,000 12.4% 100.67 B 11.7S2025 $1,722,021 12.1% 96.65 B 14.0S2019 $20,850,000 13.2% 105.76 B Ferris

12.5S2017 $4,616,365 12.4% 100.51 B 14.0S2019 $20,850,000 13.3% 105.44 B

Next Year's Prime Rate 8.00%

CAPSTONE® COURIER Page 2

Financial Summary C58538 Round: 2Dec. 31, 2015 Cash Flow Statement Survey Andrews Baldwin Chester Digby Erie Ferris CashFlows from operating activities Net Income(Loss) ($14,820) ($3,132) $12,120 $12,398 $8,787 $10,297 Adjustment for non-cash items: Depreciation $7,227 $7,587 $7,707 $7,653 $8,255 $5,987 Extraordinary gains/losses/writeoffs $0 $0 $8 $7 ($539) ($802) Changes in current assets and liablilities Acounts payable $3,651 $12 $2,546 $3,222 $571 $1,977 Inventory ($75,921) ($5,906) ($3,356) ($6,085) $2,160 ($4,336) Accounts Receivable $135 $3,847 ($3,151) ($3,515) ($1,014) ($1,929) Net cash from operations ($79,728) $2,408 $15,874 $13,680 $18,219 $11,194

Cash flows from investing activities Plant improvements(net) $0 $0 ($5,640) ($22,620) ($7,792) ($7,810) Cash flows from financing activities Dividends paid $0 $0 ($2,790) $0 ($5,433) ($4,265) Sales of common stock $0 $0 $0 $1,588 $0 $0 Purchase of common stock $0 $0 $0 $0 $0 $0 Cash from long term debt issued $0 $0 $0 $3,524 $1,722 $0 Early retirement of long term debt $0 $0 ($858) $0 $0 ($1,311) Retirement of current debt ($11,128) $0 ($11,359) ($11,359) ($11,359) ($11,359) Cash from current debt borrowing $0 $0 $17,065 $20,549 $15,867 $19,431 Cash from emergency loan $90,856 $0 $0 $0 $0 $0

Net cash from financing activities $79,728 $0 $2,057 $14,302 $798 $2,496

Net change in cash position $0 $2,408 $12,291 $5,362 $11,225 $5,881 Balance Sheet Survey Andrews Baldwin Chester Digby Erie Ferris Cash $0 $21,426 $33,226 $28,693 $32,320 $27,119 Accounts Receivable $3,489 $16,756 $13,190 $13,527 $10,417 $11,666 Inventory $109,294 $6,296 $9,644 $11,949 $5,031 $11,285 Total Current Assets $112,783 $44,478 $56,060 $54,169 $47,768 $50,070

Plant and equipment $108,400 $113,800 $115,600 $129,800 $123,818 $89,800 Accumulated Depreciation ($50,587) ($53,107) ($44,853) ($45,707) ($46,928) ($32,867) Total Fixed Assets $57,813 $60,693 $70,747 $84,093 $76,890 $56,933

Total Assets $170,597 $105,172 $126,806 $138,262 $124,658 $107,004

Account Payable $10,973 $14,342 $9,318 $9,548 $6,926 $8,250 CurrentDebt $90,856 $6,950 $17,989 $20,549 $19,677 $19,431 Long Term Debt $31,775 $34,750 $34,750 $38,203 $36,472 $25,466 Total Liabilities $133,604 $56,042 $62,057 $68,299 $63,075 $53,147

Common Stock $28,360 $18,360 $20,736 $20,471 $22,747 $18,360 Retained Earnings $8,633 $30,770 $44,013 $49,492 $38,836 $35,497 Total Equity $36,993 $49,129 $64,749 $69,963 $61,583 $53,857

Total Liabilities & Owners'' Equity $170,597 $105,172 $126,806 $138,262 $124,658 $107,004

Income Statement Survey Andrews Baldwin Chester Digby Erie Ferris Sales $84,907 $101,935 $160,473 $164,573 $126,746 $141,933 Variable Costs(Labor,Material,Carry) $70,701 $82,098 $111,175 $111,513 $87,035 $97,389 Depreciation $7,227 $7,587 $7,707 $7,653 $8,255 $5,987 SGA(R&D,Promo,Sales,Admin) $10,999 $11,674 $16,034 $18,529 $11,230 $17,696 Other(Fees,Writeoffs,TQM,Bonuses) $0 $0 $21 $262 ($453) ($782) EBIT ($4,020) $575 $25,537 $26,615 $20,679 $21,643 Interest(Short term,Long term) $18,780 $5,393 $6,509 $7,152 $6,885 $5,478 Taxes ($7,980) ($1,686) $6,660 $6,812 $4,828 $5,658 Profit Sharing $0 $0 $247 $253 $179 $210 Net Profit ($14,820) ($3,132) $12,120 $12,398 $8,787 $10,297

CAPSTONE® COURIER Page 3

Production Analysis C58538 Round: 2Dec. 31, 2015

Name Primary

Segment Units Sold

Unit Inven

tory Revision Date Age

Dec.31 MTBF Pfmn

Coord Size

Coord Price Material

Cost Labor Cost

Contr. Marg.

2nd Shift

& Over-

time

Auto mation

Next Round

Capacity Next

Round Plant

Utiliz. Able Trad 630 3,376 5/3/2015 2.9 19000 6.0 12.5 $29.50 $11.49 $9.42 -12% 44% 4.0 1,800 143% Acre Low 822 1,159 4/3/2015 3.7 16000 4.5 16.0 $24.50 $8.18 $8.05 23% 43% 5.0 1,400 141% Adam High 460 410 5/12/2015 2.2 24000 8.9 10.0 $39.00 $15.52 $9.40 30% 0% 3.0 900 88% Aft Pfmn 399 8 4/10/2015 1.9 26000 10.4 15.3 $34.00 $14.84 $10.51 24% 33% 3.0 300 132% Agape Size 432 527 1/29/2015 2.8 19000 5.0 9.5 $34.00 $12.88 $10.51 21% 33% 3.0 600 132%

Baker Trad 1,474 0 3/9/2015 2.1 17500 5.6 14.2 $24.00 $10.00 $8.83 20% 0% 4.0 1,800 82% Bead Low 1,750 0 5/25/2009 6.6 14000 3.0 17.0 $17.50 $6.38 $8.52 13% 36% 5.0 1,400 125% Bid High 343 222 6/9/2016 2.7 23000 8.0 11.5 $34.50 $14.07 $10.10 23% 0% 3.0 900 62% Bold Pfmn 397 34 9/15/2015 2.4 24000 10.5 15.1 $31.50 $14.36 $10.10 21% 0% 3.0 600 71% Buddy Size 373 0 5/9/2015 1.9 19000 4.7 10.8 $31.00 $12.00 $10.10 28% 0% 3.0 600 61%

Cake Trad 1,381 173 8/26/2015 1.9 14000 6.4 13.6 $26.50 $9.61 $8.08 32% 45% 5.5 1,000 144% Cedar Low 2,601 0 1/29/2014 6.6 12000 3.0 17.0 $19.50 $5.78 $6.44 36% 86% 7.5 1,400 184% Cid High 837 161 11/15/2015 1.3 23000 10.2 9.8 $37.50 $15.92 $11.03 28% 58% 3.0 600 157% Coat Pfmn 643 23 11/3/2015 1.5 27000 11.8 13.9 $32.50 $16.38 $9.39 23% 0% 4.0 600 99% Cure Size 642 75 9/10/2015 1.6 17000 5.4 8.6 $32.50 $12.94 $10.03 28% 17% 4.0 600 116%

Daze Trad 1,465 165 8/22/2015 1.8 18100 6.8 13.3 $29.00 $11.17 $7.80 34% 29% 5.0 1,200 128% Dell Low 2,125 0 5/25/2009 6.6 14000 3.0 17.0 $21.50 $6.38 $6.80 37% 50% 7.0 1,400 149% Dixie High 846 188 12/3/2015 1.2 24000 10.2 9.8 $39.00 $16.22 $11.62 29% 100% 3.0 650 198% Dot Pfmn 647 39 11/13/2015 1.5 27000 11.8 13.9 $34.00 $16.38 $9.74 25% 8% 3.0 650 107% Dune Size 629 120 11/13/2015 1.5 19000 5.8 8.6 $34.00 $13.65 $10.03 30% 17% 3.0 700 116% Doom 0 0 8/8/2016 0.0 0 0.0 0.0 $0.00 $0.00 $0.00 0% 0% 6.0 500 0%

Eat Trad 1,550 119 4/8/2015 2.1 15500 5.5 14.5 $27.00 $9.21 $7.47 36% 14% 7.0 1,400 113% Ebb Low 2,406 0 1/15/2015 6.6 12000 3.0 17.0 $19.50 $5.78 $7.03 33% 71% 6.0 1,400 170% Echo Trad 1,216 50 7/20/2015 1.4 16000 6.4 13.6 $27.00 $10.21 $9.20 24% 33% 5.0 900 132% Edge Pfmn 83 0 6/30/2011 4.5 25000 9.4 15.5 $34.00 $13.87 $11.62 28% 99% 3.0 1 198% Egg Size 68 91 12/24/2015 2.3 19000 6.9 13.4 $34.00 $11.44 $9.40 26% 0% 3.0 600 17%

Fast Trad 1,146 221 4/22/2015 2.1 14000 5.5 14.5 $29.00 $8.76 $9.72 33% 63% 4.0 800 161% Feat Low 1,478 0 7/27/2018 6.6 13000 3.0 17.0 $22.00 $6.08 $8.72 32% 100% 6.0 700 198% Fist High 847 165 12/22/2015 1.2 25000 10.2 9.8 $39.00 $16.52 $11.50 29% 90% 3.0 600 188% Foam Pfmn 622 31 11/11/2015 1.5 27000 11.8 14.2 $34.00 $16.30 $8.22 29% 0% 4.0 600 99% Fume Size 647 84 11/9/2015 1.5 19000 5.4 8.4 $34.00 $13.67 $8.78 34% 17% 4.0 600 116% Fox 0 0 12/12/2015 0.0 25000 11.0 9.0 $39.00 $0.00 $0.00 0% 0% 5.5 500 0%

CAPSTONE® COURIER Page 4

Traditional Segment Analysis C58538 Round: 2Dec. 31, 2015

Traditional Statistics Total Industry Unit Demand 8,809 Actual Industry Unit Sales 8,809 Segment % of Total Industry 30.4%

Next Year's Segment Growth Rate 9.2%

Traditional Customer Buying Criteria Expectations Importance

1. Age Ideal Age = 2.0 47% 2. Price $19.00 - 29.00 23% 3. Ideal Position Pfmn 6.4 Size 13.6 21% 4. Reliability MTBF 14000-19000 9%

Top Products in Traditional Segment

Name Market Share

Units Sold to

Seg Revision Date

Stock Out

Pfmn Coord

Size Coord

List Price MTBF

Age Dec.31

Promo Budget

Cust. Aware- ness

Sales Budget

Cust. Access-

ibility

Dec. Cust.

Survey Eat 16% 1,443 4/8/2015 5.5 14.5 $27.00 15500 2.09 $1,050 63% $1,085 54% 31 Daze 16% 1,424 8/22/2015 6.8 13.3 $29.00 18100 1.84 $1,100 66% $1,440 53% 36 Baker 16% 1,413 3/9/2015 YES 5.6 14.2 $24.00 17500 2.12 $1,000 61% $1,000 43% 40 Cake 15% 1,343 8/26/2015 6.4 13.6 $26.50 14000 1.87 $1,100 66% $1,270 47% 35 Echo 13% 1,177 7/20/2015 6.4 13.6 $27.00 16000 1.40 $1,050 57% $775 54% 29 Fast 13% 1,146 4/22/2015 5.5 14.5 $29.00 14000 2.08 $900 59% $1,235 48% 24 Able 6% 536 5/3/2015 6.0 12.5 $29.50 19000 2.88 $500 46% $500 35% 12 Acre 2% 198 4/3/2015 4.5 16.0 $24.50 16000 3.67 $500 42% $500 35% 3 Buddy 1% 115 5/9/2015 YES 4.7 10.8 $31.00 19000 1.93 $800 44% $800 43% 6 Bold 0% 8 9/15/2015 10.5 15.1 $31.50 24000 2.39 $800 44% $800 43% 0 Dell 0% 1 5/25/2009 YES 3.0 17.0 $21.50 14000 6.60 $1,100 64% $1,512 53% 0 Ebb 0% 1 1/15/2015 YES 3.0 17.0 $19.50 12000 6.60 $1,050 62% $1,085 54% 0

CAPSTONE® COURIER Page 5

Low End Segment Analysis C58538 Round: 2Dec. 31, 2015

Low End Statistics Total Industry Unit Demand 11,180 Actual Industry Unit Sales 11,180 Segment % of Total Industry 38.6%

Next Year's Segment Growth Rate 11.7%

Low End Customer Buying Criteria Expectations Importance

1. Price $14.00 - 24.00 53% 2. Age Ideal Age = 7.0 24% 3. Ideal Position Pfmn 2.7 Size 17.3 16% 4. Reliability MTBF 12000-17000 7%

Top Products in Low End Segment

Name Market Share

Units Sold to

Seg Revision Date

Stock Out

Pfmn Coord

Size Coord

List Price MTBF

Age Dec.31

Promo Budget

Cust. Aware- ness

Sales Budget

Cust. Access-

ibility

Dec. Cust.

Survey Cedar 23% 2,600 1/29/2014 YES 3.0 17.0 $19.50 12000 6.60 $1,100 64% $1,333 40% 25 Ebb 22% 2,405 1/15/2015 YES 3.0 17.0 $19.50 12000 6.60 $1,050 62% $1,085 36% 23 Dell 19% 2,124 5/25/2009 YES 3.0 17.0 $21.50 14000 6.60 $1,100 64% $1,512 42% 20 Bead 16% 1,750 5/25/2009 YES 3.0 17.0 $17.50 14000 6.60 $900 56% $800 31% 32 Feat 13% 1,477 7/27/2018 YES 3.0 17.0 $22.00 13000 6.60 $1,100 64% $1,235 36% 17 Acre 6% 624 4/3/2015 4.5 16.0 $24.50 16000 3.67 $500 42% $500 24% 2 Eat 1% 107 4/8/2015 5.5 14.5 $27.00 15500 2.09 $1,050 63% $1,085 36% 0 Baker 1% 56 3/9/2015 YES 5.6 14.2 $24.00 17500 2.12 $1,000 61% $1,000 31% 1 Cake 0% 36 8/26/2015 6.4 13.6 $26.50 14000 1.87 $1,100 66% $1,270 40% 0

CAPSTONE® COURIER Page 6

High End Segment Analysis C58538 Round: 2Dec. 31, 2015

High End Statistics Total Industry Unit Demand 3,448 Actual Industry Unit Sales 3,448 Segment % of Total Industry 11.9%

Next Year's Segment Growth Rate 16.2%

High End Customer Buying Criteria Expectations Importance

1. Ideal Position Pfmn 10.7 Size 9.3 43% 2. Age Ideal Age = 0.0 29% 3. Reliability MTBF 20000-25000 19% 4. Price $29.00 - 39.00 9%

Top Products in High End Segment

Name Market Share

Units Sold to

Seg Revision Date

Stock Out

Pfmn Coord

Size Coord

List Price MTBF

Age Dec.31

Promo Budget

Cust. Aware- ness

Sales Budget

Cust. Access-

ibility

Dec. Cust.

Survey Fist 25% 847 12/22/2015 10.2 9.8 $39.00 25000 1.18 $1,100 61% $1,235 44% 36 Dixie 25% 846 12/3/2015 10.2 9.8 $39.00 24000 1.23 $1,100 63% $1,512 51% 36 Cid 24% 837 11/15/2015 10.2 9.8 $37.50 23000 1.25 $1,000 58% $1,333 44% 30 Adam 13% 460 5/12/2015 8.9 10.0 $39.00 24000 2.17 $600 43% $660 30% 10 Bid 10% 340 6/9/2016 8.0 11.5 $34.50 23000 2.72 $1,000 53% $700 31% 5 Daze 1% 36 8/22/2015 6.8 13.3 $29.00 18100 1.84 $1,100 66% $1,440 51% 0 Echo 1% 24 7/20/2015 6.4 13.6 $27.00 16000 1.40 $1,050 57% $775 26% 0 Able 1% 19 5/3/2015 6.0 12.5 $29.50 19000 2.88 $500 46% $500 30% 0 Dot 0% 14 11/13/2015 11.8 13.9 $34.00 27000 1.47 $1,100 62% $1,368 51% 0 Coat 0% 13 11/3/2015 11.8 13.9 $32.50 27000 1.48 $1,000 56% $1,206 44% 0 Aft 0% 6 4/10/2015 10.4 15.3 $34.00 26000 1.87 $600 40% $600 30% 0 Foam 0% 4 11/11/2015 11.8 14.2 $34.00 27000 1.47 $1,100 59% $1,235 44% 0

CAPSTONE® COURIER Page 7

Performance Segment Analysis C58538 Round: 2Dec. 31, 2015

Performance Statistics Total Industry Unit Demand 2,749 Actual Industry Unit Sales 2,749 Segment % of Total Industry 9.5%

Next Year's Segment Growth Rate 19.8%

Performance Customer Buying Criteria Expectations Importance

1. Reliability MTBF 22000-27000 43% 2. Ideal Position Pfmn 11.4 Size 14.6 29% 3. Price $24.00 - 34.00 19% 4. Age Ideal Age = 1.0 9%

Top Products in Performance Segment

Name Market Share

Units Sold to

Seg Revision Date

Stock Out

Pfmn Coord

Size Coord

List Price MTBF

Age Dec.31

Promo Budget

Cust. Aware- ness

Sales Budget

Cust. Access-

ibility

Dec. Cust.

Survey Dot 23% 634 11/13/2015 11.8 13.9 $34.00 27000 1.47 $1,100 62% $1,368 38% 35 Coat 23% 629 11/3/2015 11.8 13.9 $32.50 27000 1.48 $1,000 56% $1,206 33% 34 Foam 22% 618 11/11/2015 11.8 14.2 $34.00 27000 1.47 $1,100 59% $1,235 35% 35 Aft 14% 393 4/10/2015 10.4 15.3 $34.00 26000 1.87 $600 40% $600 23% 17 Bold 14% 390 9/15/2015 10.5 15.1 $31.50 24000 2.39 $800 44% $800 25% 14 Edge 3% 83 6/30/2011 YES 9.4 15.5 $34.00 25000 4.50 $300 25% $155 17% 7 Daze 0% 1 8/22/2015 6.8 13.3 $29.00 18100 1.84 $1,100 66% $1,440 38% 0

CAPSTONE® COURIER Page 8

Size Segment Analysis C58538 Round: 2Dec. 31, 2015

Size Statistics Total Industry Unit Demand 2,776 Actual Industry Unit Sales 2,776 Segment % of Total Industry 9.6%

Next Year's Segment Growth Rate 18.3%

Size Customer Buying Criteria Expectations Importance

1. Ideal Position Pfmn 5.4 Size 8.6 43% 2. Age Ideal Age = 1.5 29% 3. Reliability MTBF 16000-21000 19% 4. Price $24.00 - 34.00 9%

Top Products in Size Segment

Name Market Share

Units Sold to

Seg Revision Date

Stock Out

Pfmn Coord

Size Coord

List Price MTBF

Age Dec.31

Promo Budget

Cust. Aware- ness

Sales Budget

Cust. Access-

ibility

Dec. Cust.

Survey Fume 23% 647 11/9/2015 5.4 8.4 $34.00 19000 1.48 $1,100 59% $1,235 39% 39 Cure 23% 642 9/10/2015 5.4 8.6 $32.50 17000 1.56 $1,000 56% $1,206 37% 33 Dune 23% 628 11/13/2015 5.8 8.6 $34.00 19000 1.50 $1,100 62% $1,368 42% 39 Agape 16% 432 1/29/2015 5.0 9.5 $34.00 19000 2.76 $600 38% $600 26% 12 Buddy 9% 258 5/9/2015 YES 4.7 10.8 $31.00 19000 1.93 $800 44% $800 28% 12 Able 3% 74 5/3/2015 6.0 12.5 $29.50 19000 2.88 $500 46% $500 26% 4 Egg 2% 67 12/24/2015 6.9 13.4 $34.00 19000 2.30 $1,050 56% $775 29% 0 Echo 1% 14 7/20/2015 6.4 13.6 $27.00 16000 1.40 $1,050 57% $775 29% 0 Baker 0% 5 3/9/2015 YES 5.6 14.2 $24.00 17500 2.12 $1,000 61% $1,000 28% 0 Daze 0% 3 8/22/2015 6.8 13.3 $29.00 18100 1.84 $1,100 66% $1,440 42% 0 Bid 0% 3 6/9/2016 8.0 11.5 $34.50 23000 2.72 $1,000 53% $700 28% 0 Cake 0% 1 8/26/2015 6.4 13.6 $26.50 14000 1.87 $1,100 66% $1,270 37% 0

CAPSTONE® COURIER Page 9

Market Share C58538 Round: 2Dec. 31, 2015

Actual Market Share in Units Potential Market Share in Units Trad Low High Pfmn Size Total Trad Low High Pfmn Size Total

Industry Unit Sales 8,809 11,180 3,448 2,749 2,776 28,961 Units Demanded 8,809 11,180 3,448 2,749 2,776 28,961 % of Market 30.4% 38.6% 11.9% 9.5% 9.6% 100.0% % of Market 30.4% 38.6% 11.9% 9.5% 9.6% 100.0%

Able 6.1% 0.5% 2.7% 2.2% Able 5.8% 0.6% 2.6% 2.1% Acre 2.2% 5.6% 2.8% Acre 2.1% 2.6% 1.6% Adam 13.4% 1.6% Adam 13.3% 1.6% Aft 0.2% 14.3% 1.4% Aft 0.2% 14.4% 1.4% Agape 15.6% 1.5% Agape 15.3% 1.5% Total 8.3% 5.6% 14.1% 14.3% 18.2% 9.5% Total 7.9% 2.6% 14.1% 14.4% 18.0% 8.2%

Baker 16.0% 0.5% 0.2% 5.1% Baker 20.1% 0.6% 0.2% 6.4% Bead 15.7% 6.0% Bead 26.8% 10.3% Bid 9.9% 1.2% Bid 9.9% 1.2% Bold 14.2% 1.4% Bold 13.6% 1.3% Buddy 1.3% 9.3% 1.3% Buddy 1.5% 10.6% 1.5% Total 17.4% 16.2% 9.9% 14.2% 9.6% 15.0% Total 21.7% 27.4% 9.9% 13.6% 10.9% 20.7%

Cake 15.2% 0.3% 4.8% Cake 14.5% 0.2% 4.5% Cedar 23.3% 9.0% Cedar 20.4% 7.9% Cid 24.3% 2.9% Cid 24.3% 2.9% Coat 0.4% 22.9% 2.2% Coat 0.4% 21.9% 2.1% Cure 23.1% 2.2% Cure 22.8% 2.2% Total 15.3% 23.6% 24.7% 22.9% 23.2% 21.1% Total 14.5% 20.6% 24.7% 21.9% 22.8% 19.6%

Daze 16.2% 1.0% 0.1% 5.1% Daze 15.3% 1.0% 4.8% Dell 19.0% 7.3% Dell 16.4% 6.3% Dixie 24.5% 2.9% Dixie 24.5% 2.9% Dot 0.4% 23.1% 2.2% Dot 0.4% 22.0% 2.1% Dune 22.6% 2.2% Dune 22.3% 2.1% Total 16.2% 19.0% 26.0% 23.1% 22.8% 19.7% Total 15.3% 16.4% 26.0% 22.1% 22.5% 18.3%

Eat 16.4% 1.0% 5.3% Eat 15.5% 0.3% 4.9% Ebb 21.5% 8.3% Ebb 19.2% 7.4% Echo 13.4% 0.7% 0.5% 4.2% Echo 12.7% 0.7% 0.5% 4.0% Edge 3.0% 0.3% Edge 6.6% 0.6% Egg 2.4% 0.2% Egg 2.4% 0.2% Total 29.8% 22.5% 0.7% 3.0% 2.9% 18.4% Total 28.2% 19.5% 0.7% 6.6% 2.9% 17.1%

Fast 13.0% 4.0% Fast 12.3% 3.8% Feat 13.2% 5.1% Feat 13.5% 5.2% Fist 24.5% 2.9% Fist 24.6% 2.9% Foam 0.1% 22.5% 2.1% Foam 21.5% 2.1% Fume 23.3% 2.2% Fume 23.0% 2.2% Total 13.0% 13.2% 24.7% 22.5% 23.3% 16.4% Total 12.3% 13.5% 24.7% 21.5% 23.0% 16.2%

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Perceptual Map C58538 Round: 2Dec. 31, 2015

Andrews Baldwin Chester Name Pfmn Size Revised Name Pfmn Size Revised Name Pfmn Size Revised Able 6.0 12.5 5/3/2015 Baker 5.6 14.2 3/9/2015 Cake 6.4 13.6 8/26/2015 Acre 4.5 16.0 4/3/2015 Bead 3.0 17.0 5/25/2009 Cedar 3.0 17.0 1/29/2014 Adam 8.9 10.0 5/12/2015 Bid 8.0 11.5 6/9/2016 Cid 10.2 9.8 11/15/2015 Aft 10.4 15.3 4/10/2015 Bold 10.5 15.1 9/15/2015 Coat 11.8 13.9 11/3/2015 Agape 5.0 9.5 1/29/2015 Buddy 4.7 10.8 5/9/2015 Cure 5.4 8.6 9/10/2015

Digby Erie Ferris Name Pfmn Size Revised Name Pfmn Size Revised Name Pfmn Size Revised Daze 6.8 13.3 8/22/2015 Eat 5.5 14.5 4/8/2015 Fast 5.5 14.5 4/22/2015 Dell 3.0 17.0 5/25/2009 Ebb 3.0 17.0 1/15/2015 Feat 3.0 17.0 7/27/2018 Dixie 10.2 9.8 12/3/2015 Echo 6.4 13.6 7/20/2015 Fist 10.2 9.8 12/22/2015 Dot 11.8 13.9 11/13/2015 Edge 9.4 15.5 6/30/2011 Foam 11.8 14.2 11/11/2015 Dune 5.8 8.6 11/13/2015 Egg 6.9 13.4 12/24/2015 Fume 5.4 8.4 11/9/2015

Fox 11.0 9.0 12/12/2015

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HR/TQM Report C58538 Round: 2Dec. 31, 2015

HUMAN RESOURCES SUMMARY Andrews Baldwin Chester Digby Erie Ferris

Needed Complement 1,111 826 923 928 741 822 Complement 1,111 826 923 928 741 822 1st Shift Complement 832 754 642 668 541 534 2nd Shift Complement 279 72 281 260 200 288

Overtime Percent 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Turnover Rate 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% New Employees 426 100 263 335 106 227 Separated Employees 0 0 0 0 0 0 Recruiting Spend $0 $0 $0 $0 $0 $0 Training Hours 0 0 0 0 0 0 Productivity Index 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Recruiting Cost $426 $100 $263 $335 $106 $227 Separation Cost $0 $0 $0 $0 $0 $0 Training Cost $0 $0 $0 $0 $0 $0 Total HR Admin Cost $426 $100 $263 $335 $106 $227

Labor Contract Next Year Wages $23.15 $23.15 $23.15 $23.15 $23.15 $23.15 Benefits 2,500 2,500 2,500 2,500 2,500 2,500 Profit Sharing 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% Annual Raise 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%

Starting Negotiation Position Wages Benefits Profit Sharing Annual Raise

Ceiling Negotiation Position Wages Benefits Profit Sharing Annual Raise

Adjusted Labor Demands Wages Benefits Profit Sharing Annual Raise

Strike Days

TQM SUMMARY Andrews Baldwin Chester Digby Erie Ferris

Process Mgt Budgets Last Year CPI Systems $0 $0 $0 $0 $0 $0 Vendor/JIT $0 $0 $0 $0 $0 $0 Quality Initiative Training $0 $0 $0 $0 $0 $0 Channel Support Systems $0 $0 $0 $0 $0 $0 Concurrent Engineering $0 $0 $0 $0 $0 $0 UNEP Green Programs $0 $0 $0 $0 $0 $0

TQM Budgets Last Year Benchmarking $0 $0 $0 $0 $0 $0 Quality Function Deployment Effort $0 $0 $0 $0 $0 $0 CCE/6 Sigma Training $0 $0 $0 $0 $0 $0 GEMI TQEM Sustainability Initiatives $0 $0 $0 $0 $0 $0 Total Expenditures $0 $0 $0 $0 $0 $0

Cumulative Impacts Material Cost Reduction 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Labor Cost Reduction 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Reduction R&D Cycle Time 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Reduction Admin Costs 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Demand Increase 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

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Ethics Report C58538 Round: 2Dec. 31, 2015

ETHICS SUMMARY Other (Fees, Writeoffs, etc.) The actual dollar impact. Example, $120 means Other increased by $120. Demand Factor The % of normal. 98% means demand fell 2%. Material Cost Impact The % of normal. 104% means matieral costs rose 4%. Admin Cost Impact The % of normal. 103% means admin costs rose 3%. Productivity Impact The % of normal. 104% means productivity increased by 4%. Awareness Impact The % of normal. 105% means normal awareness was multiplied by 1.05. Accessibility Impact The % of normal. 98% means normal accessiblity was multiplied by 0.98.

Normal means the value that would have been produced if the problem had not been presented.

No Impact Andrews Baldwin Chester Digby Erie Ferris Total Other (Fees, Writeoffs, etc.) $0 $0 $0 $0 $0 $0 $0 Demand Factor 100% 100% 100% 100% 100% 100% 100% Material Cost Impact 100% 100% 100% 100% 100% 100% 100% Admin Cost Impact 100% 100% 100% 100% 100% 100% 100% Productivity Impact 100% 100% 100% 100% 100% 100% 100% Awareness Impact 100% 100% 100% 100% 100% 100% 100% Accessibility Impact 100% 100% 100% 100% 100% 100% 100%

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Annual Report Annual Report Andrews C58538 Round: 2Dec. 31, 2015

Balance Sheet DEFINITIONS: Common Size: The common size column simply represents each item as a percentage of total assets for that year. Cash: Your end-of-year cash position. Accounts Receivable: Reflects the lag between delivery and payment of your products. Inventories: The current value of your inventory across all products. A zero indicates your company stocked out. Unmet demand would, of course, fall to your competitors. Plant & Equipment: The current value of your plant. Accum Deprec: The total accumulated depreciation from your plant. Accts Payable: What the company currently owes suppliers for materials and services. Current Debt: The debt the company is obligated to pay during the next year of operations. It includes emergency loans used to keep your company solvent should you run out of cash during the year. Long Term Debt: The company's long term debt is in the form of bonds, and this represents the total value of your bonds. Common Stock: The amount of capital invested by shareholders in the company. Retained Earnings: The profits that the company chose to keep instead of paying to shareholders as dividends.

ASSETS 2015 Common

Size

2014

Cash $0 0.0% $0 Account Receivable $3,489 2.0% $3,624 Inventory $109,294 64.1% $33,373 Total Current Assets $112,783 66.1% $36,997

Plant & Equipment $108,400 63.5% $108,400 Accumulated Depreciation ($50,587) -29.7% ($43,360) Total Fixed Assets $57,813 33.9% $65,040 Total Assets $170,597 100.0% $102,037 LIABILITIES & OWNER'S EQUITY

Accounts Payable $10,973 6.4% $7,322 Current Debt $90,856 53.3% $11,128 Long Term Debt $31,775 18.6% $31,775 Total Liabilities $133,604 78.3% $50,225

Common Stock $28,360 16.6% $28,360 Retained Earnings $8,633 5.1% $23,453 Total Equity $36,993 21.7% $51,813 Total Liab. & O. Equity $170,597 100.0% $102,037

Cash Flow Statement The Cash Flow Statement examines what happened in the Cash Account during the year. Cash injections appear as positive numbers and cash withdrawals as negative numbers. The Cash Flow Statement is an excellent tool for diagnosing emergency loans. When negative cash flows exceed positives, you are forced to seek emergency funding. For example, if sales are bad and you find yourself carrying an abundance of excess inventory, the report would show the increase in inventory as a huge negative cash flow. Too much unexpected inventory could outstrip your inflows, exhaust your starting cash and force you to beg for money to keep your company afloat.

Cash Flows from Operating Activities 2015 2014 NetIncome(Loss) ($14,820) ($5,075) Depreciation $7,227 $7,227 Extraordinary gains/losses/writeoffs $0 $165 Accounts Payable $3,651 $739 Inventory ($75,921) ($24,755) Accounts Receivable $135 $4,683

Net cash from operation ($79,728) ($17,017) Cash Flows from Investing Activities Plant Improvements $0 $3,510 Cash Flows from Financing Activities Dividends Paid $0 ($1,054) Sales of Common Stock $0 $10,000 Purchase of Common Stock $0 $0 Cash from long term debt $0 $0 Retirement of long term debt $0 ($10,000) Change in current debt(net) $79,728 $11,128

Net Cash from financing activities $79,728 $10,074 Net Change in cash position $0 ($3,434) Closing cash position $0 $0

Annual Report Page 14

Annual Report Andrews C58538 Round: 2Dec. 31, 2015

2015 Income Statement (Product Name) Able Acre Adam Aft Agape Abum Ajoy Apps 2015

Total Common

Size Sales $18,575 $20,128 $17,951 $13,565 $14,687 $0 $0 $0 $84,907 100.0%

Variable Costs: Direct Labor $5,648 $6,613 $4,307 $4,185 $4,420 $0 $0 $0 $25,173 29.6% Direct Material $7,040 $6,575 $7,051 $6,045 $5,702 $0 $0 $0 $32,413 38.2% Inventory Carry $8,163 $2,232 $1,214 $25 $1,481 $0 $0 $0 $13,115 15.4% Total Variable $20,851 $15,420 $12,571 $10,255 $11,604 $0 $0 $0 $70,701 83.3%

Contribution Margin ($2,276) $4,708 $5,380 $3,310 $3,083 $0 $0 $0 $14,206 16.7%

Period Costs: Depreciation $2,640 $2,427 $1,080 $360 $720 $0 $0 $0 $7,227 8.5% SG&A: R&D $341 $258 $364 $276 $80 $1,000 $1,000 $1,000 $4,318 5.1% Promotions $500 $500 $600 $600 $600 $0 $0 $0 $2,800 3.3% Sales $500 $500 $660 $600 $600 $0 $0 $0 $2,860 3.4% Admin $223 $242 $216 $163 $177 $0 $0 $0 $1,020 1.2% Total Period $4,204 $3,926 $2,920 $1,999 $2,176 $1,000 $1,000 $1,000 $18,225 21.5%

Net Margin ($6,480) $782 $2,460 $1,312 $907 ($1,000) ($1,000) ($1,000) ($4,020) -4.7%

Definitions: Sales: Unit Sales times list price. Direct Labor: Labor costs incurred to produce the product that was sold. Inventory Carry Cost: the cost unsold goods in inventory. Depreciation: Calculated on straight-line. 15-year depreciation of plant value. R&D Costs: R&D department expenditures for each product. Admin: Administration overhead is estimated at 1.5% of sales. Promotions: The promotion budget for each product. Sales: The sales force budget for each product. Other: Chargs not included in other categories such as Fees, Write offs, and TQM. The fees include money paid to investment bankers and brokerage firms to issue new stocks or bonds plus consulting fees your instructor might assess. Write-offs include the loss you might experience when you sell capacity or liquidate inventory as the result of eliminating a production line. If the amount appears as a negative amount, then you actually made money on the liquidation of capacity or inventory. EBIT: Earnings Before Interest and Taxes. Short Term Interest: Interest expense based on last year''s current debt, including short term debt, long term notes that have become due, and emergency loans, Long Term Interest: Interest paid on outstanding bonds. Taxes: Income tax based upon a 35% tax rate. Profit Sharing: Profits shared with employees under the labor contract. Net Profit: EBIT minus interest, taxes, and profit sharing.

Other $0 0.0% EBIT ($4,020) -4.7% Short Term Interest $14,495 17.1% Long Term Interest $4,285 5.0% Taxes ($7,980) -9.4% Profit Sharing $0 0.0% Net Profit ($14,820) -17.5%

Annual Report Page 15