EXHIBIT 1

1988
1697

1989
2013

183
1278
1461
239
1222

239
1524
1763
326
1437

GROSS PROFIT

475

576

Operating expense (b)

Interest expense
Net income before taxes
Provision for income taxes
Net income

425
13
37
6
31

515
20
41
7
34

1988
58
171
239
468
126
594

1989
49
222
325
596
140
736

Net sales
Cost of goods sold
Beginning inventory
Purchases
Ending inventory
Total cost of goods sold

(a) In the first quarter of 1990 sales were $698,000 and net income
was $7,000.
(b) Operating expenses include a cash salary for Mr. Butler of
$75,000 in 1988, $85,000 in 1989, $95,000 in 1990, and $22,000 in
the 1st quarter of 1991. Mr. Butler also received some of the
perquisites commonly taken by owners of privately held businesses.
EXHIBIT 2

Cash
Accounts receivable, net
Inventory
Current assets
Property, net
Total assets
Notes payable, bank
Notes payable, Mr. Stark

146
105

Notes Payable, trade

Accounts payable
Accrued expenses
Long-term debt, current portion
Current liabilities
Long-term debt
Total liabilities

124
24
7
260
64
324

192
30
7
375
57
432

Net worth
Total liabilities and
net worth

270
594

304
736

FUNDS FLOW STATEMENT

between 1988 to 1990
1988
1989
Sources
CR
1.8 1.589333
Bank borrowing
233
NW/TA
0.454545 0.413043
Trade credit (accounts and no
132
AR to sales 0.100766 0.110283
retained earnings
78
Inve/sales 0.140837 0.161451
cash
17
ITO
5.112971 4.421538
accured expenses
15
Invt. Period 71.38707 82.55045
Total Sources
475
ARTO
9.923977 9.067568
ACP
36.77961 40.25335
Uses
Payable
10.30645
7.9375
Inventory
179
APP
35.41471 45.98425
AR
146
CCC
72.75197 76.81955
Buy out interest from Mr. Star
105
AR+Inve
410
547
reduced long term debt
14
(AR+Inve)/ 0.241603 0.271734
increase in FA
31
AP/Sales
0.07307 0.09538
Total Uses
475
Increase from 1988-90
financing as % of sales
increas in AR&Inve
B/S
% of slaes
Forecasting
cost of forgoing discount of 2% for 36 d
ASSETS
0.020408
cash
0.015219 54.78842
annualized
A/R
0.117669 423.608
0.206916
inventory
0.15516 558.5746
CA
1036.971
property (grow with sales)
0.336303 209.7996
total asset

1246.771

LIABILITIES
if no discount is taken
notes payable bank (Plug)
619.9613
349.0869
accoiunts payable trade (10/365*purchas 75.24288 346.1173 270.8744
accrured expe (as per sale)
0.014477 52.11581
long term debt
7
CL
754.32
long term debt
47
total liability
801.32
net worth with retained earning
445.4506
total liability and net worth
1246.771

P/L Forecasting
% on sales
Sales
Less cost of goods sold
beginning inventory
purchase

3600
0.723831

418
2746.365
3164.365 Tax Calculation
end Inventory
0.15516
558.5746
50
0.15
COGS
0.723831
2605.791
25
0.25
GP
994.2094 54.84935
0.34
less Operating expe
0.244246
879.2873
operating income
114.922
plus purchase discount (2% 0n purchase)
54.92731
less Interest (10*4 qts)
40
net income before tax
129.8494
tax (15% on 1st 50k, 25% on next 25K 34% on rest) 32.39878
net income after tax
97.45057

1990
2694
326
2042
2368
418
1950

1st Qtr.
1991
718

3600 0.336303 209.7996

418
660 0.757981 2728.731
1078
556
522 0.723831

744

196

658
33
53
9
44

175 0.244246
10
11
2
9

1990
41
317
418
776
157
933

1st Qtr.
1991
31
345
556
932
162
1094

233

247

256
39
7
535
50
585

157
243
36
7
690
47
737

0.015219
0.117669
0.15516
0.288048
0.058278
0.346325
0
0.086488
0
0
0
0.095026
0.014477
0.002598
0.198589
0.01856
0.217149

348
933

1990
1.450467
0.37299
0.117669
0.15516
4.665072
78.24103
8.498423
42.94915
7.976563
45.75906
75.43111
735
0.272829
0.095026
0.021956
59.14909
325

357 0.129176
1094 0.346325

0.938849
388.7739
2.081159
175.383
2.716049
134.3864
429.7706
901
1.254875
0.33844

oing discount of 2% for 36 days of 1000

7.5
6.25
18.64878
32.39878