Tire City

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Exhibit 1 Financial Statements for Tire City, Inc.

For years ending 12/31 1993 1994 1995 1996 1997

INCOME STATEMENT

Net sales $16,230 $20,355 $23,505 $28,206 $33,847

Cost of sales 9,430 11,898 13,612 16,334 19,601
Gross profit 6,800 8,457 9,893 11,872 14,246
Selling, general, and
administrative expenses 5,195 6,352 7,471 8,965 10,758
Depreciation 160 180 213 213 273
Net interest expense 119 106 94 103 146
Pre-tax income 1,326 1,819 2,115 2,591 3,069
Income taxes 546 822 925 1123 1331
Net income $780 $997 $1,190 $1,467 $1,738

Dividends $155 $200 $240 $293 $348

BALANCE SHEET

Assets
Cash $508 $609 $706 $846 $1,015
Accounts receivable 2,545 3,095 3,652 4,382 5,259
Inventories 1,630 1,838 2,190 1,625 3,154
Total current assets 4,683 5,542 6,548 6,854 9,428

Gross plant & equipment 3,232 3,795 4,163 6,163 6,563

Depreciation for the year 213 273
Accumulated depreciation 1,335 1,515 1,728 1,941 2,214
Net plant & equipment 1,897 2,280 2,435 4,222 4,349

Total assets $6,580 $7,822 $8,983 $11,075.58 $13,777

LIABILITIES

Current maturities of
long-term debt $125 $125 $125 $125 $125
Accounts payable 1,042 1,325 1,440 1,728 2,074
Accrued expenses 1,145 1,432 1,653 1,983.6 2,380
Total current liabilities 2,312 2,882 3,218 3,837 4,579

Long-term debt 1,000 875 750 1050.1421895 1,618.81

Common stock 1,135 1,135 1,135 1,135 1,135

Retained earnings 2,133 2,930 3,880 5,053.84 6,444
Total shareholders’ equity 3,268 4,065 5,015 6,189 7,579

Total liabilities $6,580 $7,822 $8,983 $11,076 $13,777

$0.00 $0.00
Cash flow from operating activity
Operatig profit (before tax)
Net Income 2,693 3,215 2,115

Non-cash expenses (operating)

Depriciation 213 273 3,214.68

Impact on accrual/ change in WC 2,693.400

A/C Payable 288 346
A/C receivable -730 -876 2,612
Acc. Expenses 331 397 1,183.469
inventories 565 -1,529
Investing activity 0.022653152
Warehouse -2000 -400

Financing Activity 1,598.980000000

Debt 197 423 415.511378848
Dividends -$293 -$348 425.1421894982
TOTAL 1,264 1,500
INCOME TAX 1123 1331
140 169

3,103.42
1,406.04
0.022653
8,063
2,084
678 693.67
6,104

8,062.98

925.14

F
Notes

20% increase Y-O-Y Operating margin 0.09398

COGS/Sales - 0.579

1996 1997
Operating income 2650.8 3180.96
83 old +200 new

Effective tax rate 43.37% Int. Calc. 112.5 100

Note: Because of difference tax cut to certain operation of company, eg: green technology
Calculate the average of prev year t 41% 45% 44%
20% of net income Dividend- Dollar remains same or keeping payout ratio constant
Payout ratio DPS/EPS
Gross dividend/Gross income

Plugging data
AR/Sales - 0.1554 57 55 57Reciveable
Inventory/sales-proportion - 0.0931 63 56 59 inventory velocity

Depn. is taken for income

Debt outstanding - 625

AP/Sales - 0.0613
AE/Sales - 0.0703

-125 and +2000 then -125 and +400 TA $11,076 LTD

TCC 3,837 ST

Opening debt 625

payout ratio constant

end/Gross income

inventory velocity

95 96
750 625+x
125 125
875 750+x