Geniune Motor Products

Question 1: Using budget data, how many motors would have to be sold for Waltham Motors Division to breakeven?

From the industry benchmark report for 2014, (appendix) between the year 2013 and 2014 our share value increased from 15.80 to 27.04 placing us ahead of everyone in our world. That is an increase of 172%. From out firm reports (appendix), our net income of 2,764,446 unfortunately fell short of our profit forecast. of 3,501,014. Even though our share holder’s value was the highest amongst our competitors, our profit before taxes was second to Bikes ‘R’Us by a total of $450,000. They had a profit of 4,339,987 while we only had a profit of 3,949,209. A part of the reason why our net income didn’t meet our forecasts and profit before taxes fell short of Bikes’R’Us is due to

$135,000 $90,000 TOTAL REVENUE $3,136,500 $2,352,375 $1,568,250 Expences TOTAL VARIABLE COSTS $454,000 $340,500 $227,000 TOTAL FIXED COSTS $1,403,000 $1,403,001 $1,403,002 TOTAL EXPENSE BEFORE IT $1,857,000 $1,743,501 $1,630,002 EBIT $1,279,500 $608,874 -$61,752 Depreciation $320,000 $320,001 $320,002 EBITDA $1,599,500 $928,875 $258,250 Furnishing Interest $110,000 $110,000 $110,000 20yr Mortgage Interest $182,000 $182,000 $182,000 TOTAL INTEREST $292,000 $292,000 $292,000 TAXES (40%) $395,000.00 $126,749.60 -$141,500.80 Furnishing Principal $180,160 $180,160 $180,160 20yr Mortgage Principal $49,713 $49,713 $49,713 TOTAL PRINCIPAL $229,873 $229,873 $229,873 NET INCOME $362,627 -$39,749 -$442,124 DIVIDEND PAYMENT $29,010 -$3,180 -$35,370 RETAINED EARNINGS $333,617 -$36,569 EBIT/INTEREST 4.38 2.09 (0.21) EBITDA/INTEREST 5.48 3.18 0.88 BURDEN $675,121.67 $675,121.67 $675,121.67 EBIT/BURDEN 1.90 0.90 (0.09) ROE= Net Income/OE (H1) 32.97% -3.61% -40.19% Revenue Estimates Revenue Item 100% Monthly 75%

BALANCE SHEET |Dec 1990 |Jan |Feb |Mar |Apr |May |June |July |Aug |Sept |Oct |Nov |Dec | |Cash |175 |556 |724 |175 |175 |175 |175 |175 |175 |175 |175 |175 |175 | |Accts receivable |2,628 |958 |234 |271 |270 |250 |250 |270 |1,603 |3,113 |3,580 |3,982 |3.063 | |Inventory |530 |948 |1,355 |1,749 |2,157 |2,564 |2,971 |3,365 |2,904 |2.314 |1,549 |697 |530 | |Net P/E |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 | |Total Assets |4,403 |3,533 |3,383 |3,265 |3,672 |4,059 |4,466

Huffman Trucking Income Statement / Vertical Analysis December 31st, 2006 | In Thousands$ | Percent of Net-Sales(Rounded) | | 2006 | 2005 | 2006 | 2005 | Revenues | 879,944 | 807,288 | 100% | 100 | | Operating Expenses | | Salaries, Wages & Benefits | 353,739 | 330,597 | 40% | 41% | Fuel Expense | 217,363 | 192,357 | 25% | 24% | Operating Supplies & Expenses | 152,318 | 136,319 | 17% | 17% | Purchased Transportation | 89,957 | 82,429 | 10% | 10% |

Caledonia Products Integrative Program FIN 370 - Finance for Business |Operating Cash Flow |Year One |Year Two |Year Three |Year Four |Year Five | |Project Revenue |$21,000,000 |$36,000,000 |$42,000,000 |$24,000,000 |$15,600,000 | |Cost of Goods Sold |($12,600,000) |($21,600,000) |($25,200,000) |($14,400,000) |($10,800,000) | |Fixed Costs |($200,000) |($200,000) |($200,000) |($200,000)

Additional Financing required is calculated as the plug variable for Notes Payable using the percentage of sales approach by varying all other accounts that change according to sales,

Exhibit 21 displays Mustang’s income statement for the twelve months ended June 30, 2016 and June 30, 2015. During the financial year 2016, the Company did not generate any revenue from their core business activities. In the twelve months ended June 30, 2016, Mustang’s net loss widened to $10,282,313, compared to a net loss of $6,620,704 in the same period in 2015. The increase in net losses was primarily due to the significant increase (+120%) in the Company’s administration costs as compared to the same period in 2015. The administration costs include employee benefit and consulting fees expenses (+38%), compliance costs (+412%), share based payments (+100%), travel costs (83%), accounting and audit costs (270%) and other costs. Further,

Presented below is Mills’ Company financial data as of December 31, 2012: Sales 5,230,000 Sales Discount 310,000 Sales Salaries 311,000 Sales Returns 158,000 Sales Commissions 60,000 Freight-out 41,000 Office Salaries 123,000 Office Supplies Expense 23,000 Gain on sale of Investment 120,000 Rental Revenue 80,000 Loss on disposal of division 385,000 Interest expense 50,000 Ordinary Shares dividends 80,000 Beginning Inventory 960,000 Preferred Shares dividends 130,000 Ending Inventory 100,000 Freight-in 120,000 Purchases 218,000 Purchases Discounts 35,000 Depreciation understated due to an error (net of tax) 26,000 Tax rate 25% Beginning Retained Earnings 2012 420,000

|250000 indirect employees & 9000 vehicle for distribution). |position in profitability due to drop in prices by nearly 30% since 1950’s. |

sales to Searl Company (ending | |   | | Inventory) | 21,000 | Pearce Company 's percentage of Searl Company 's income | | | | realized from third parties, .80($675,000) | 540,000 | |   |   |   | | | Controlling interest in Consolidated Income | $2,337,000 | Exercise 6-5   2011 Pearce Company 's income from its independent operations $1,500,000 Plus: Pearce Company 's interest in the realized net income of Searl Company: Reported Net income $600,000 Less Amortization of difference between implied and book value ($75,000 + $112,500) (187,500) Less unrealized profit included therein ($90,000 - ) (18,000) Income realized in transaction with third parties $394,500 Pearce Company 's interest therein (0.8 $394,500) $315,600 Controlling interest in consolidated net income $1,815,600   2012 Pearce Company 's income from its independent operations $1,800,000 Plus: Pearce Company 's interest in the realized net income of Searl Company: Reported Net income $750,000 Less amortization of difference between implied and book value (75,000) Less profit included therein that has not been realized in transactions with third parties ($105,000 - ) (21,000) Plus profit realized in 2012 ($90,000 -) 18,000 Income realized in transaction with third parties $672,000 Pearce Company 's interest therein (0.8 $672,000) 537,600 Controlling

EBIT EBIT*(1-t) Dep Capex A/R Inventory A/P WC FCFF NPV 2010 2011 2012 2013 2014 2015 2016 (1,250) 583 994 1,277 1,392 1,503 1,623 (750) 350 596 766 835 902 974 0 152 152 152 152 164 178 1,470 952 152 152 334 361 389 0 729.4931507 1112.0718 1363.1471 1472.1982 1589.9708 1717.1718 0 359.661 500.121 396.008 426.724 460.858 497.724 0 330.118 496.601 605.884 653.308 705.575

Another option Linear Technology has to exercise its excess cash balance, they can repurchase shares to increase the value of the firm. This repurchase option is beneficial to the company and shareholders because in an open market share repurchase has no effect on the stock price. In addition, by repurchasing shares the firm’s earnings and earnings per share will increase. As shown in Exhibit B, by calculating the total numbers of shares repurchased (total cash balance/price per share) and subtracting it from the number of shares outstanding will give us the number of shares left outstanding after the repurchase to be 261,703,052. Exhibit B shows how this decrease in the number of shares drove up the earnings per share value by $0.10 from $0.55 to $0.65. When the company repurchases shares instead of paying out in special dividends, the firm’s value will increase and it also allows the firm to retain its cash reserves within the company.

5.3.1 Automation Level: Automation level can influence a company’s net profit by increasing contribution margin and decreasing labor costs. Higher automation level indicates more efficient manufacture capability that will cut down labor costs from hiring

Ford has two major segments, automotive sector and financial services sector. These are presented as two sectors to evaluate performance of each and make appropriate decisions and to have consistency in reporting. The profitability of the automotive sector is affected by wholesale unit volumes, the margin of profit for each vehicle, and the fixed costs. The fixed costs can be really affected by any variation of units of sold. If the company does not sell as many vehicles as what was planned, the fixed costs will be same, therefore will decrease the profit for Ford. If the company sells more than what was planned, this will also increase the profit, because the fixed costs will not change.