Hampton Machine Tool Company

Exhibit 1
Shipments at Selling Price (thousands of dollars)

1979

January
February
March
April
May
June
July
August
Eight months total
September
October
November
December

As Forecast
Dec. 1978
$1,302
$1,872
$1,635
$1,053
$1,293
$1,479
$1,488
$1,797
$11,919
$1,299
$1,347
$1,311
$2,298

Actual
$861
$672
$1,866
$1,566
$873
$1,620
$723
$507
$8,688

As Forecast
Sept. 1979

$2,163
$1,505
$1,604
$2,265

$2,500
$2,000
$1,500

Forecast

$1,000

Actual

$500
$0

Hampton Machine Tool Company

Exhibit 2
Balance Sheets, 1978--1979 (thousands of dollars)
1978
1979
Nov.
Dec.
Mar.
Cash
$2,520
$491
$505
Accounts receivable, net
$1,245
$1,863
$1,971
Inventories
$2,601
$2,478
$3,474
Current assets
$6,366
$4,832
$5,950

June
$1,152
$1,893
$3,276
$6,321

July
$1,678
$1,269
$3,624
$6,571

Aug.
$1,559
$684
$4,764
$7,007

Gross fixed assets

Accumulated depreciation
Net fixed assets

$4,010
$2,998
$1,012

$4,010
$3,010
$1,000

$4,010
$3,040
$970

$4,010
$3,070
$940

$4,010
$3,080
$930

$4,010
$3,090
$920

$62

$40

$39

$24

$24

$42

$7,440

$5,872

$6,959

$7,285

$7,525

$7,969

$0
$348
$561
$150
$840
$1,899

$1,000
$371
$777
$74
$1,040
$3,262

$1,000
$681
$849
$373
$1,040
$3,943

$1,000
$399
$678
$354
$1,566
$3,997

$1,000
$621
$585
$407
$1,566
$4,179

$1,000
$948
$552
$479
$1,566
$4,545

Common stock ($10 par value)$1,178

Surplus
$4,363
Net worth
$5,541

$428
$2,182
$2,610

$428
$2,588
$3,016

$428
$2,860
$3,288

$428
$2,918
$3,346

$428
$2,996
$3,424

Total liabilities and net worth

$5,872

$6,959

$7,285

$7,525

$7,969

Prepaid expenses
Total assets
Notes payable, bank
Accounts payable
Accruals
Taxes payable*
Customer advances
Current liabilities

$7,440

*Tax payments in 1979 include $75,000 due March 15 on underpayment of 1978 taxes and four equal
payments of $181,000 due on the 15th of April, June, September, and December for estimated 1979 tax
liability with any underpayment of 1979 taxes due March 15, 1980.

Hampton Machine Tool Company

Exhibit 3
Income Statements, 1978--1979 (thousands of dollars)
Fiscal
Year
Ending
Dec.
1979
31/12/78
1978
Jan.
Net sales
$7,854
$1,551
$861
Cost of sales*
$5,052
$1,122
$474
Gross profit
$2,802
$429
$387
Selling and admin expenses $1,296
Interest expense
$0
Net income before taxes $1,506
Income taxes
Net income
Dividends

Feb.
$672
$369
$303

Mar.
$1,866
$1,362
$504

Apr.
$1,566
$1,137
$429

May
$873
$567
$306

June
$1,620
$1,197
$423

July
$723
$510
$213

Aug.
$507
$276
$231

$248
$0
$181

$103
$15
$269

$61
$15
$227

$205
$15
$284

$172
$15
$242

$96
$15
$195

$130
$15
$278

$87
$15
$111

$66
$15
$150

$723

$87

$129

$109

$136

$116

$94

$133

$53

$72

$783

$94

$140

$118

$148

$126

$101

$145

$58

$78

$50

$25

$0

$0

$0

$0

$0

$100

$0

$0

* Includes depreciation charges of $150,000 in 1978, $12,000 in December 1987, and $10,000 per month in 1979.

Hampton Machine Tool Company

Eight
Months
Ending
31/8/79
$8,688
$5,892
$2,796
$920
$120
$1,756
$842
$914
$0
$100

Hampton Machine Tool Company

Hampton Machine Tool

Pro Forma Statements
(thousands of dollars)
Historical
July
$723

Aug.
$507

$597
$126
$15
$111
$53
$58

$342
$165
$15
$150
$72
$78

Sept.
$2,163
$600
$1,320
$105
$2,025
$10
$400
$2,435
($272)
$15
($287)
($138)
($149)

$100
$45

$0
$58

$0
$78

$0
($149)

Cash (plug)
Accounts receivable, net
Inventories
Current assets
Gross fixed assets
Accumulated depreciation
Net fixed assets
Prepaid expenses
Total assets

$1,152
$1,893
$3,276
$6,321
$4,010
$3,070
$940
$24
$7,285

$1,678
$1,269
$3,624
$6,571
$4,010
$3,080
$930
$24
$7,525

$1,559
$684
$4,764
$7,007
$4,010
$3,090
$920
$42
$7,969

Notes payable, bank

Accounts payable
Accruals
Taxes payable*
Customer advances
Current liabilities
Common stock ($10 par value)
Surplus
Net worth
Total liabilities and net worth

$1,000
$399
$678
$354
$1,566
$3,997
$428
$2,860
$3,288
$7,285

$1,000
$621
$585
$407
$1,566
$4,179
$428
$2,918
$3,346
$7,525

$1,000
$948
$552
$479
$1,566
$4,545
$428
$2,996
$3,424
$7,969

June
$1,620

Net sales
Purchases
WIP inventory reduction
Raw materials reduction
Cost of goods sold
Depreciation
Other expenses
Cost of sales and other expenses$1,327
EBIT
$293
Interest expense
$15
Net income before taxes
$278
Income taxes
$133
Net income
$145
Dividends
Earnings retained

Change in cash

$526

($119)

Pro Forma
Oct.
Nov.
$1,505
$1,604
$600
$600
$0
$0
$105
$105
$705
$705
$10
$14
$400
$400
$1,115
$1,119
$390
$486
$15
$20
$375
$466
$145
$223
$230
$242

Dec.
$2,265
$600
$0
$105
$705
$14
$400
$1,119
$1,147
$20
$1,127
$541
$586

$0
$230

$0
$242

$699
$1,323
$3,339
$5,361
$4,010
$3,100
$910
$42
$6,313

$1,007
$779
$3,234
$5,020
$4,360
$3,110
$1,250
$42
$6,312

$766
$1,604
$3,129
$5,499
$4,360
$3,124
$1,237
$42
$6,778

($331)
$2,265
$3,024
$4,958
$4,360
$3,137
$1,223
$42
$6,223

$1,000
$600
$552
$160
$726
$3,038
$428
$2,847
$3,275
$6,313

$1,350
$600
$552
$305
$0
$2,807
$428
$3,077
$3,505
$6,312

$1,350
$600
$552
$529
$0
$3,031
$428
$3,319
$3,747
$6,778

$0
$600
$552
$888
$0
$2,040
$428
$3,755
$4,183
$6,223

($860)

$308

($241)

$150
$436

($1,097)

Hampton Machine Tool

Projected Cash Budget
(thousands of dollars)
September
October
November

December

January

Cash Inflows:
Collections of Receivables:
Bank Loan:
Total cash inflows:
$

Cash Outflows:
Payments of Accounts Payable:
Other Operating Outflows:
Purchase New Equipment:
Tax Payments:
Interest Payments to Bank:
Principal Repayments to Bank:
Dividends:
Total cash outflows:
$

Reconciliation:
Begining cash balance:
Net cash flow:
Ending cash balance: