Business Management Final

Round: 3 Dec. 31, 2016 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 -46.4% -3.3% 5.2% 5.2% 4.1% 5.9% Asset Turnover 0.42 1.02 1.02 1.13 1.07 1.39 ROA -19.4% -3.4% 5.3% 5.8% 4.4% 8.2% Leverage (Assets/Equity)

37.0 2.0 2.1 2.1 2.1 2.0

ROE -718.6% -7.0% 10.9% 12.0% 9.0% 16.7% Emergency Loan $125,793,089 $4,945,006 $0 $0 $0 $0 Sales $69,961,561 $96,089,579 $159,532,219 $185,644,482 $154,127,338 $185,494,213 EBIT ($23,116,007) $566,964 $21,655,955 $23,974,920 $17,892,517 $24,157,919 Profits ($32,473,914) ($3,194,122) $8,267,684 $9,578,890 $6,247,090 $10,939,194 Cumulative Profit ($48,179,912) $2,182,017 $29,677,316 $33,677,169 $25,121,802 $33,006,630 SG&A / Sales 20.0% 12.1% 10.9% 11.2% 7.5% 10.7% Contrib. Margin % -2.8% 20.6% 31.6% 29.8% 26.3% 27.8%

CAPSTONE® COURIER Page 1

Stock & Bonds C58538 Round: 3Dec. 31, 2016

Stock Market Summary

Company Close Change Shares MarketCap

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

Andrews $1.00 $0.00 2,291,939 $2 $1.97 ($14.17) $0.00 0.0% -0.0 Baldwin $12.57 ($11.61) 2,000,000 $25 $22.97 ($1.60) $0.00 0.0% -7.9 Chester $60.54 $5.40 2,124,345 $129 $35.80 $3.89 $0.00 0.0% 15.6 Digby $64.91 $5.20 2,053,924 $133 $38.83 $4.66 $0.00 0.0% 13.9 Erie $51.59 $2.17 2,152,363 $111 $32.07 $2.90 $0.00 0.0% 17.8 Ferris $61.28 $5.40 2,013,135 $123 $32.55 $5.43 $0.00 0.0% 11.3

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

12.5S2017 $10,924,506 12.8% 98.00 DDD 12.5S2017 $13,828,904 12.5% 99.65 B 14.0S2019 $20,850,000 14.3% 98.17 DDD 14.0S2019 $20,850,000 13.6% 102.60 B

Baldwin 11.6S2025 $3,523,690 12.4% 93.30 B 12.5S2017 $13,900,000 12.5% 99.65 B 12.2S2026 $8,623,471 12.7% 96.19 B 14.0S2019 $20,850,000 13.6% 102.60 B Erie

Chester 12.5S2017 $13,900,000 12.6% 99.56 CCC 12.5S2017 $13,900,000 12.5% 99.65 B 14.0S2019 $20,850,000 13.7% 102.36 CCC 14.0S2019 $20,850,000 13.6% 102.60 B 11.7S2025 $1,722,021 12.5% 93.33 CCC 12.1S2026 $13,308,235 12.7% 95.64 B 12.3S2026 $11,199,852 12.8% 96.20 CCC

Ferris 12.5S2017 $4,616,365 12.5% 99.65 B 14.0S2019 $20,850,000 13.6% 102.60 B 12.2S2026 $8,738,656 12.7% 96.19 B

Next Year's Prime Rate 8.50%

CAPSTONE® COURIER Page 2

Financial Summary C58538 Round: 3Dec. 31, 2016 Cash Flow Statement Survey Andrews Baldwin Chester Digby Erie Ferris CashFlows from operating activities Net Income(Loss) ($32,474) ($3,194) $8,268 $9,579 $6,247 $10,939 Adjustment for non-cash items: Depreciation $7,227 $7,587 $10,567 $10,560 $10,540 $7,660 Extraordinary gains/losses/writeoffs $0 $0 $0 ($340) ($2) ($513) Changes in current assets and liablilities Acounts payable ($6,042) ($6,220) $63 $1,805 $2,966 $2,835 Inventory ($1,387) ($26,452) ($6,969) ($10,581) ($8,415) ($2,646) Accounts Receivable ($2,261) $8,859 $77 ($1,732) ($2,251) ($3,580) Net cash from operations ($34,937) ($19,421) $12,006 $9,291 $9,086 $14,695

Cash flows from investing activities Plant improvements(net) $0 $0 ($42,900) ($30,420) ($34,288) ($26,640) Cash flows from financing activities Dividends paid $0 $0 $0 $0 $0 $0 Sales of common stock $0 $0 $3,031 $207 $1,200 $734 Purchase of common stock $0 $0 $0 $0 $0 $0 Cash from long term debt issued $0 $0 $13,308 $8,623 $11,200 $8,739 Early retirement of long term debt $0 $0 $0 $0 $0 $0 Retirement of current debt ($90,856) ($6,950) ($17,989) ($20,549) ($19,677) ($19,431) Cash from current debt borrowing $0 $0 $22,524 $26,194 $16,972 $22,433 Cash from emergency loan $125,793 $4,945 $0 $0 $0 $0

Net cash from financing activities $34,937 ($2,005) $20,875 $14,476 $9,695 $12,475

Net change in cash position $0 ($21,426) ($10,020) ($6,653) ($15,508) $530 Balance Sheet Survey Andrews Baldwin Chester Digby Erie Ferris Cash $0 $0 $23,206 $22,040 $16,812 $27,649 Accounts Receivable $5,750 $7,898 $13,112 $15,258 $12,668 $15,246 Inventory $110,681 $32,748 $16,613 $22,531 $13,446 $13,931 Total Current Assets $116,431 $40,646 $52,932 $59,829 $42,926 $56,826

Plant and equipment $108,400 $113,800 $158,500 $158,400 $158,100 $114,900 Accumulated Depreciation ($57,813) ($60,693) ($55,420) ($54,107) ($57,460) ($38,473) Total Fixed Assets $50,587 $53,107 $103,080 $104,293 $100,640 $76,427

Total Assets $167,018 $93,753 $156,012 $164,123 $143,566 $133,253

Account Payable $4,931 $8,122 $9,382 $11,353 $9,892 $11,085 CurrentDebt $125,793 $4,945 $22,524 $26,194 $16,972 $22,433 Long Term Debt $31,775 $34,750 $48,058 $46,826 $47,672 $34,205 Total Liabilities $162,499 $47,818 $79,964 $84,373 $74,536 $67,723

Common Stock $28,360 $18,360 $23,767 $20,678 $23,947 $19,094 Retained Earnings ($23,841) $27,576 $52,281 $59,071 $45,083 $46,436 Total Equity $4,519 $45,935 $76,048 $79,749 $69,030 $65,530

Total Liabilities & Owners'' Equity $167,018 $93,753 $156,012 $164,123 $143,566 $133,253

Income Statement Survey Andrews Baldwin Chester Digby Erie Ferris Sales $69,962 $96,090 $159,532 $185,644 $154,127 $185,494 Variable Costs(Labor,Material,Carry) $71,890 $76,301 $109,170 $130,251 $113,557 $133,891 Depreciation $7,227 $7,587 $10,567 $10,560 $10,540 $7,660 SGA(R&D,Promo,Sales,Admin) $13,961 $11,635 $17,323 $20,757 $11,520 $19,825 Other(Fees,Writeoffs,TQM,Bonuses) $0 $0 $817 $102 $618 ($40) EBIT ($23,116) $567 $21,656 $23,975 $17,893 $24,158 Interest(Short term,Long term) $26,844 $5,481 $8,677 $8,937 $8,085 $6,985 Taxes ($17,486) ($1,720) $4,543 $5,263 $3,432 $6,011 Profit Sharing $0 $0 $169 $195 $127 $223 Net Profit ($32,474) ($3,194) $8,268 $9,579 $6,247 $10,939

CAPSTONE® COURIER Page 3

Production Analysis C58538 Round: 3Dec. 31, 2016

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 815 3,501 10/4/2016 2.1 17000 6.4 13.5 $23.50 $9.75 $8.61 -29% 0% 4.0 1,800 52% Acre Low 1,160 1,385 11/5/2016 2.4 16000 3.8 17.0 $17.40 $6.78 $7.38 -2% 0% 5.0 1,400 99% Adam High 284 374 11/21/2016 1.6 22000 9.6 8.9 $33.00 $14.72 $9.84 13% 0% 3.0 900 28% Aft Pfmn 355 0 10/15/2016 1.5 27000 11.4 14.6 $29.90 $15.00 $10.51 16% 17% 3.0 300 116% Agape Size 368 436 7/30/2016 2.1 19000 5.4 8.6 $29.00 $12.60 $9.84 9% 0% 3.0 600 46%

Baker Trad 1,125 657 12/23/2016 1.6 17500 6.5 12.8 $25.00 $10.26 $8.61 22% 0% 4.0 1,800 99% Bead Low 2,330 195 5/25/2009 7.6 14000 3.0 17.0 $18.50 $5.79 $8.96 18% 82% 5.0 1,400 180% Bid High 254 513 6/9/2016 2.1 22000 9.9 10.0 $36.50 $14.34 $9.84 18% 0% 3.0 900 61% Bold Pfmn 266 16 7/16/2016 1.9 26000 11.4 15.1 $33.00 $14.59 $9.84 26% 0% 3.0 600 41% Buddy Size 207 239 5/4/2017 2.9 19000 4.7 10.8 $33.00 $11.16 $9.84 27% 0% 3.0 600 74%

Cake Trad 1,357 252 8/26/2016 1.6 14000 7.1 12.9 $26.00 $9.42 $7.76 32% 45% 6.0 1,000 144% Cedar Low 2,378 394 1/29/2014 7.6 12000 3.0 17.0 $19.00 $5.19 $5.33 42% 100% 8.0 1,850 198% Cid High 700 106 12/17/2016 1.1 23000 11.4 8.6 $37.00 $15.92 $10.20 29% 8% 3.0 900 107% Coat Pfmn 844 120 5/1/2016 1.6 27000 12.4 13.9 $32.00 $15.75 $10.12 17% 58% 4.5 850 157% Cure Size 818 99 9/11/2016 1.4 17000 6.1 7.6 $32.00 $12.75 $9.81 29% 42% 4.5 900 140%

Daze Trad 1,514 285 8/21/2016 1.6 18400 7.5 12.6 $28.50 $11.05 $8.76 30% 65% 5.5 1,000 163% Dell Low 1,984 590 5/25/2009 7.6 14000 3.0 17.0 $21.00 $5.79 $6.00 41% 86% 7.5 1,600 184% Dixie High 846 134 12/2/2016 1.1 24500 11.3 8.7 $38.50 $16.29 $10.71 30% 23% 3.0 950 122% Dot Pfmn 834 96 8/2/2016 1.4 27000 12.8 13.5 $33.50 $16.08 $11.14 18% 38% 4.0 900 137% Dune Size 998 112 10/16/2016 1.3 19000 6.5 7.4 $33.50 $13.56 $11.24 26% 43% 4.0 950 141% Doom Pfmn 206 42 8/8/2016 0.4 27000 13.0 13.4 $33.50 $16.22 $6.81 29% 29% 6.0 500 50%

Eat Trad 1,752 396 1/15/2016 3.1 14500 5.5 14.5 $21.00 $8.15 $5.66 30% 46% 7.5 1,400 145% Ebb Low 2,381 391 1/15/2015 7.6 12000 3.0 17.0 $19.00 $5.19 $7.61 30% 100% 7.5 1,750 198% Echo Trad 1,441 144 8/20/2016 1.4 15000 7.1 12.9 $26.50 $9.72 $8.85 28% 72% 6.0 1,050 171% Egg Trad 1,280 0 5/18/2016 2.0 16000 7.1 12.9 $26.50 $10.02 $12.18 15% 100% 4.0 600 198%

Fast Trad 1,243 167 4/22/2015 3.1 14000 5.5 14.5 $21.50 $8.00 $10.66 10% 100% 4.0 600 198% Feat Low 1,386 0 7/27/2018 7.6 13000 3.0 17.0 $21.50 $5.49 $7.61 38% 100% 6.0 1,150 198% Fist High 927 130 12/13/2016 1.1 25000 11.3 8.6 $38.50 $16.48 $11.40 28% 50% 3.0 850 149% Foam Pfmn 788 135 9/18/2016 1.4 27000 12.8 13.5 $33.40 $16.08 $9.97 21% 50% 4.5 800 149% Fume Size 870 155 12/11/2016 1.3 16000 6.1 7.2 $33.50 $12.68 $10.12 30% 58% 4.0 850 157% Fox High 983 8 12/11/2016 0.5 25000 12.0 8.0 $38.50 $17.05 $8.37 35% 100% 5.5 500 198%

CAPSTONE® COURIER Page 4

Traditional Segment Analysis C58538 Round: 3Dec. 31, 2016

Traditional Statistics Total Industry Unit Demand 9,619 Actual Industry Unit Sales 9,619 Segment % of Total Industry 29.4%

Next Year's Segment Growth Rate 9.2%

Traditional Customer Buying Criteria Expectations Importance

1. Age Ideal Age = 2.0 47% 2. Price $18.50 - 28.50 23% 3. Ideal Position Pfmn 7.1 Size 12.9 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 Daze 16% 1,495 8/21/2016 7.5 12.6 $28.50 18400 1.60 $1,225 73% $1,670 53% 35 Echo 15% 1,437 8/20/2016 7.1 12.9 $26.50 15000 1.38 $1,200 66% $1,056 69% 32 Cake 14% 1,353 8/26/2016 7.1 12.9 $26.00 14000 1.60 $1,025 66% $1,610 48% 33 Eat 13% 1,296 1/15/2016 5.5 14.5 $21.00 14500 3.09 $1,200 70% $1,056 69% 18 Egg 13% 1,277 5/18/2016 YES 7.1 12.9 $26.50 16000 1.96 $1,200 65% $1,056 69% 42 Baker 11% 1,015 12/23/2016 6.5 12.8 $25.00 17500 1.56 $1,000 62% $1,000 37% 33 Fast 9% 910 4/22/2015 5.5 14.5 $21.50 14000 3.08 $900 58% $725 36% 13 Able 8% 753 10/4/2016 6.4 13.5 $23.50 17000 2.05 $500 37% $500 27% 28 Acre 1% 49 11/5/2016 3.8 17.0 $17.40 16000 2.41 $500 35% $500 27% 0 Buddy 0% 32 5/4/2017 4.7 10.8 $33.00 19000 2.93 $800 44% $800 37% 0 Adam 0% 3 11/21/2016 9.6 8.9 $33.00 22000 1.63 $600 38% $660 27% 0

CAPSTONE® COURIER Page 5

Low End Segment Analysis C58538 Round: 3Dec. 31, 2016

Low End Statistics Total Industry Unit Demand 12,488 Actual Industry Unit Sales 12,488 Segment % of Total Industry 38.2%

Next Year's Segment Growth Rate 11.7%

Low End Customer Buying Criteria Expectations Importance

1. Price $13.50 - 23.50 53% 2. Age Ideal Age = 7.0 24% 3. Ideal Position Pfmn 3.2 Size 16.8 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 Ebb 19% 2,381 1/15/2015 3.0 17.0 $19.00 12000 7.60 $1,200 69% $1,056 48% 27 Cedar 19% 2,378 1/29/2014 3.0 17.0 $19.00 12000 7.60 $1,025 65% $1,690 47% 27 Bead 19% 2,330 5/25/2009 3.0 17.0 $18.50 14000 7.60 $900 56% $1,000 37% 26 Dell 16% 1,984 5/25/2009 3.0 17.0 $21.00 14000 7.60 $1,225 72% $1,753 47% 22 Feat 11% 1,386 7/27/2018 YES 3.0 17.0 $21.50 13000 7.60 $1,100 68% $1,305 46% 19 Acre 9% 1,111 11/5/2016 3.8 17.0 $17.40 16000 2.41 $500 35% $500 19% 14 Eat 4% 457 1/15/2016 5.5 14.5 $21.00 14500 3.09 $1,200 70% $1,056 48% 6 Fast 3% 333 4/22/2015 5.5 14.5 $21.50 14000 3.08 $900 58% $725 46% 5 Baker 1% 110 12/23/2016 6.5 12.8 $25.00 17500 1.56 $1,000 62% $1,000 37% 0 Able 0% 10 10/4/2016 6.4 13.5 $23.50 17000 2.05 $500 37% $500 19% 0 Cake 0% 4 8/26/2016 7.1 12.9 $26.00 14000 1.60 $1,025 66% $1,610 47% 0 Echo 0% 4 8/20/2016 7.1 12.9 $26.50 15000 1.38 $1,200 66% $1,056 48% 0

CAPSTONE® COURIER Page 6

High End Segment Analysis C58538 Round: 3Dec. 31, 2016

High End Statistics Total Industry Unit Demand 4,007 Actual Industry Unit Sales 4,007 Segment % of Total Industry 12.3%

Next Year's Segment Growth Rate 16.2%

High End Customer Buying Criteria Expectations Importance

1. Ideal Position Pfmn 11.6 Size 8.4 43% 2. Age Ideal Age = 0.0 29% 3. Reliability MTBF 20000-25000 19% 4. Price $28.50 - 38.50 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 Fox 25% 983 12/11/2016 12.0 8.0 $38.50 25000 0.54 $1,100 41% $1,305 58% 41 Fist 23% 927 12/13/2016 11.3 8.6 $38.50 25000 1.11 $1,100 65% $1,305 58% 45 Dixie 21% 846 12/2/2016 11.3 8.7 $38.50 24500 1.15 $1,250 71% $1,753 53% 43 Cid 17% 700 12/17/2016 11.4 8.6 $37.00 23000 1.14 $1,000 60% $1,690 47% 36 Adam 7% 280 11/21/2016 9.6 8.9 $33.00 22000 1.63 $600 38% $660 23% 11 Bid 6% 251 6/9/2016 9.9 10.0 $36.50 22000 2.14 $1,000 57% $700 25% 8 Daze 0% 19 8/21/2016 7.5 12.6 $28.50 18400 1.60 $1,225 73% $1,670 53% 0 Egg 0% 2 5/18/2016 YES 7.1 12.9 $26.50 16000 1.96 $1,200 65% $1,056 17% 0

CAPSTONE® COURIER Page 7

Performance Segment Analysis C58538 Round: 3Dec. 31, 2016

Performance Statistics Total Industry Unit Demand 3,293 Actual Industry Unit Sales 3,293 Segment % of Total Industry 10.1%

Next Year's Segment Growth Rate 19.8%

Performance Customer Buying Criteria Expectations Importance

1. Reliability MTBF 22000-27000 43% 2. Ideal Position Pfmn 12.4 Size 13.9 29% 3. Price $23.50 - 33.50 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 Coat 26% 844 5/1/2016 12.4 13.9 $32.00 27000 1.57 $1,000 59% $1,529 37% 39 Dot 25% 834 8/2/2016 12.8 13.5 $33.50 27000 1.44 $1,200 69% $1,586 42% 39 Foam 24% 788 9/18/2016 12.8 13.5 $33.40 27000 1.37 $1,100 64% $1,305 35% 36 Aft 11% 355 10/15/2016 YES 11.4 14.6 $29.90 27000 1.54 $600 36% $600 18% 26 Bold 8% 266 7/16/2016 11.4 15.1 $33.00 26000 1.92 $300 32% $300 17% 15 Doom 6% 206 8/8/2016 13.0 13.4 $33.50 27000 0.39 $1,200 53% $0 42% 32

CAPSTONE® COURIER Page 8

Size Segment Analysis C58538 Round: 3Dec. 31, 2016

Size Statistics Total Industry Unit Demand 3,284 Actual Industry Unit Sales 3,284 Segment % of Total Industry 10.1%

Next Year's Segment Growth Rate 18.3%

Size Customer Buying Criteria Expectations Importance

1. Ideal Position Pfmn 6.1 Size 7.6 43% 2. Age Ideal Age = 1.5 29% 3. Reliability MTBF 16000-21000 19% 4. Price $23.50 - 33.50 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 Dune 30% 998 10/16/2016 6.5 7.4 $33.50 19000 1.35 $1,200 69% $1,586 45% 40 Fume 26% 870 12/11/2016 6.1 7.2 $33.50 16000 1.26 $1,100 64% $1,305 38% 29 Cure 25% 818 9/11/2016 6.1 7.6 $32.00 17000 1.43 $1,000 59% $1,529 40% 35 Agape 11% 368 7/30/2016 5.4 8.6 $29.00 19000 2.09 $600 34% $600 23% 17 Buddy 5% 175 5/4/2017 4.7 10.8 $33.00 19000 2.93 $800 44% $800 24% 5 Able 2% 53 10/4/2016 6.4 13.5 $23.50 17000 2.05 $500 37% $500 23% 0 Bid 0% 3 6/9/2016 9.9 10.0 $36.50 22000 2.14 $1,000 57% $700 24% 0

CAPSTONE® COURIER Page 9

Market Share C58538 Round: 3Dec. 31, 2016

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 9,619 12,488 4,007 3,293 3,284 32,691 Units Demanded 9,619 12,488 4,007 3,293 3,284 32,691 % of Market 29.4% 38.2% 12.3% 10.1% 10.1% 100.0% % of Market 29.4% 38.2% 12.3% 10.1% 10.1% 100.0%

Able 7.8% 1.6% 2.5% Able 7.5% 1.6% 2.4% Acre 0.5% 8.9% 3.5% Acre 0.5% 8.7% 3.5% Adam 7.0% 0.9% Adam 6.4% 0.8% Aft 10.8% 1.1% Aft 12.6% 1.3% Agape 11.2% 1.1% Agape 11.2% 1.1% Total 8.4% 9.0% 7.0% 10.8% 12.8% 9.1% Total 8.0% 8.8% 6.4% 12.6% 12.8% 9.0%

Baker 10.5% 0.9% 3.4% Baker 10.2% 0.9% 3.3% Bead 18.7% 7.1% Bead 18.2% 7.0% Bid 6.3% 0.8% Bid 5.6% 0.7% Bold 8.1% 0.8% Bold 7.9% 0.8% Buddy 0.3% 5.3% 0.6% Buddy 0.3% 5.3% 0.6% Total 10.9% 19.5% 6.3% 8.1% 5.4% 12.8% Total 10.5% 19.1% 5.6% 7.9% 5.4% 12.4%

Cake 14.1% 4.2% Cake 13.5% 4.0% Cedar 19.0% 7.3% Cedar 18.6% 7.1% Cid 17.5% 2.1% Cid 16.0% 2.0% Coat 25.6% 2.6% Coat 25.1% 2.5% Cure 24.9% 2.5% Cure 24.9% 2.5% Total 14.1% 19.1% 17.5% 25.6% 24.9% 18.6% Total 13.5% 18.6% 16.0% 25.1% 24.9% 18.1%

Daze 15.5% 0.5% 4.6% Daze 14.9% 0.4% 4.4% Dell 15.9% 6.1% Dell 15.5% 5.9% Dixie 21.1% 2.6% Dixie 19.4% 2.4% Dot 25.3% 2.5% Dot 24.8% 2.5% Dune 30.4% 3.0% Dune 30.4% 3.1% Doom 6.3% 0.6% Doom 6.1% 0.6% Total 15.5% 15.9% 21.6% 31.6% 30.4% 19.5% Total 14.9% 15.5% 19.8% 30.9% 30.4% 18.9%

Eat 13.5% 3.7% 5.4% Eat 13.0% 3.6% 5.2% Ebb 19.1% 7.3% Ebb 18.6% 7.1% Echo 14.9% 4.4% Echo 14.4% 4.2% Egg 13.3% 3.9% Egg 16.5% 4.9% Total 41.7% 22.8% 21.0% Total 43.9% 22.3% 21.4%

Fast 9.5% 2.7% 3.8% Fast 9.1% 2.6% 3.7% Feat 11.1% 4.2% Feat 13.1% 5.0% Fist 23.1% 2.8% Fist 21.2% 2.6% Foam 23.9% 2.4% Foam 23.4% 2.4% Fume 26.5% 2.7% Fume 26.5% 2.7% Fox 24.5% 3.0% Fox 30.9% 3.8% Total 9.5% 13.8% 47.7% 23.9% 26.5% 19.0% Total 9.1% 15.7% 52.1% 23.4% 26.5% 20.1%

CAPSTONE® COURIER Page 10

Perceptual Map C58538 Round: 3Dec. 31, 2016

Andrews Baldwin Chester Name Pfmn Size Revised Name Pfmn Size Revised Name Pfmn Size Revised Able 6.4 13.5 10/4/2016 Baker 6.5 12.8 12/23/2016 Cake 7.1 12.9 8/26/2016 Acre 3.8 17.0 11/5/2016 Bead 3.0 17.0 5/25/2009 Cedar 3.0 17.0 1/29/2014 Adam 9.6 8.9 11/21/2016 Bid 9.9 10.0 6/9/2016 Cid 11.4 8.6 12/17/2016 Aft 11.4 14.6 10/15/2016 Bold 11.4 15.1 7/16/2016 Coat 12.4 13.9 5/1/2016 Agape 5.4 8.6 7/30/2016 Buddy 4.7 10.8 5/4/2017 Cure 6.1 7.6 9/11/2016 Abum 6.0 15.0 4/17/2016 Ajoy 6.2 15.0 5/1/2016 Apps 5.9 15.0 4/19/2016

Digby Erie Ferris Name Pfmn Size Revised Name Pfmn Size Revised Name Pfmn Size Revised Daze 7.5 12.6 8/21/2016 Eat 5.5 14.5 1/15/2016 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 11.3 8.7 12/2/2016 Echo 7.1 12.9 8/20/2016 Fist 11.3 8.6 12/13/2016 Dot 12.8 13.5 8/2/2016 Egg 7.1 12.9 5/18/2016 Foam 12.8 13.5 9/18/2016 Dune 6.5 7.4 10/16/2016 Fume 6.1 7.2 12/11/2016 Doom 13.0 13.4 8/8/2016 Fox 12.0 8.0 12/11/2016

CAPSTONE® COURIER Page 11

HR/TQM Report C58538 Round: 3Dec. 31, 2016

HUMAN RESOURCES SUMMARY Andrews Baldwin Chester Digby Erie Ferris

Needed Complement 531 911 855 1,037 988 987 Complement 531 911 855 1,037 988 987 1st Shift Complement 521 745 567 687 548 569 2nd Shift Complement 10 166 288 350 440 418

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 53 176 86 213 346 264 Separated Employees 580 0 68 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 $53 $176 $86 $213 $346 $264 Separation Cost $2,900 $0 $340 $0 $0 $0 Training Cost $0 $0 $0 $0 $0 $0 Total HR Admin Cost $2,953 $176 $426 $213 $346 $264

Labor Contract Next Year Wages $24.31 $24.31 $24.31 $24.31 $24.31 $24.31 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%

CAPSTONE® COURIER Page 12

Ethics Report C58538 Round: 3Dec. 31, 2016

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%

CAPSTONE® COURIER Page 13

Annual Report Annual Report Andrews C58538 Round: 3Dec. 31, 2016

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 2016 Common

Size

2015

Cash $0 0.0% $0 Account Receivable $5,750 3.4% $3,489 Inventory $110,681 66.3% $109,294 Total Current Assets $116,431 69.7% $112,783

Plant & Equipment $108,400 64.9% $108,400 Accumulated Depreciation ($57,813) -34.6% ($50,587) Total Fixed Assets $50,587 30.3% $57,813 Total Assets $167,018 100.0% $170,597 LIABILITIES & OWNER'S EQUITY

Accounts Payable $4,931 3.0% $10,973 Current Debt $125,793 75.3% $90,856 Long Term Debt $31,775 19.0% $31,775 Total Liabilities $162,499 97.3% $133,604

Common Stock $28,360 17.0% $28,360 Retained Earnings ($23,841) -14.3% $8,633 Total Equity $4,519 2.7% $36,993 Total Liab. & O. Equity $167,018 100.0% $170,597

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 2016 2015 NetIncome(Loss) ($32,474) ($14,820) Depreciation $7,227 $7,227 Extraordinary gains/losses/writeoffs $0 $0 Accounts Payable ($6,042) $3,651 Inventory ($1,387) ($75,921) Accounts Receivable ($2,261) $135

Net cash from operation ($34,937) ($79,728) Cash Flows from Investing Activities Plant Improvements $0 $0 Cash Flows from Financing Activities Dividends Paid $0 $0 Sales of Common Stock $0 $0 Purchase of Common Stock $0 $0 Cash from long term debt $0 $0 Retirement of long term debt $0 $0 Change in current debt(net) $34,937 $79,728

Net Cash from financing activities $34,937 $79,728 Net Change in cash position $0 $0 Closing cash position $0 $0

Annual Report Page 14

Annual Report Andrews C58538 Round: 3Dec. 31, 2016

2016 Income Statement (Product Name) Able Acre Adam Aft Agape Abum Ajoy Apps 2016

Total Common

Size Sales $19,157 $20,181 $9,356 $10,609 $10,659 $0 $0 $0 $69,962 100.0%

Variable Costs: Direct Labor $7,248 $8,912 $2,704 $3,727 $3,711 $0 $0 $0 $26,302 37.6% Direct Material $9,032 $9,053 $4,296 $5,156 $4,769 $0 $0 $0 $32,306 46.2% Inventory Carry $8,391 $2,575 $1,108 $0 $1,208 $0 $0 $0 $13,282 19.0% Total Variable $24,671 $20,539 $8,109 $8,883 $9,688 $0 $0 $0 $71,890 102.8%

Contribution Margin ($5,514) ($358) $1,247 $1,726 $971 $0 $0 $0 ($1,928) -2.8%

Period Costs: Depreciation $2,640 $2,427 $1,080 $360 $720 $0 $0 $0 $7,227 10.3% SG&A: R&D $771 $859 $904 $801 $586 $297 $337 $304 $4,858 6.9% Promotions $500 $500 $600 $600 $600 $0 $0 $0 $2,800 4.0% Sales $500 $500 $660 $600 $600 $0 $0 $0 $2,860 4.1% Admin $943 $993 $460 $522 $525 $0 $0 $0 $3,443 4.9% Total Period $5,353 $5,279 $3,704 $2,883 $3,031 $297 $337 $304 $21,188 30.3%

Net Margin ($10,868) ($5,636) ($2,457) ($1,157) ($2,060) ($297) ($337) ($304) ($23,116) -33.0%

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 ($23,116) -33.0% Short Term Interest $22,559 32.2% Long Term Interest $4,285 6.1% Taxes ($17,486) -25.0% Profit Sharing $0 0.0% Net Profit ($32,474) -46.4%

Annual Report Page 15