Income Statement

2009 2010 2011

Sales…………………………………………………………………$ 3,702,480 $ 3,961,654 $ 3,981,462
Cost of goods sold……………………………………. 2,665,786 2,879,049 2,936,630
Gross profits…………………………………………….. 1,003,694 1,082,605 1,044,832
Selling and administrative expense…………. 765,800 773,458 788,927
Depreciation expense……………………………… 31,265 32,470 33,675
Operation Profit………………………………………. 239,269 276,677 222,230
Interest expense……………………………………... 12,532 10,325 10,235
Earnings before taxes……………………………… 227,097 266,352 211,995
Taxes………………………………………………………. 79,484 93,223 74,198
Earnings after taxes……………………………….. 147,613 173,129 137,797
Preferred stock dividends………………………. - - -
Earnings available to common stockholders 147,613 173,129 137,797
Common shares outstanding………………….. 80,000 80,000 80,000
Earnings per share…………………………………. 1.8 2.2 1.7
 Camparative Balance Sheet

Year-End 2009 Year-End 2010 Year-End 2011

Assets
Current assets:
Cash $ 35,750 $ 62,635 $ 86,595
Marketable Securities 12,545 23,564 24,153
Accounts receivable (net) 246,580 293,430 349,182
Inventory 185,652 243,117 312,622
Prepaid expenses 6,575 21,525 26,325
Total current assets 487,102 644,271 798,877
Plant and equipment 984,021 1,026,880 1,151,210
Less: Accumulated depreciation 176,580 209,050 242,725
Net plant and equipment 807,441 817,830 908,485
Total assets 1,294,543 1,462,101 1,707,362
Liabilities and Stockholder's Equity
Current Liabilities:
Accounts payable 62,685 116,695 188,569
Other Liabilities 123,256 150,674 195,265
Total current liabilities 185,941 267,370 383,834
Long-term liabilities:
Bonds payable 421,000 334,000 325,000
Total liabilities 606,941 601,370 708,834
Stockholders' equity:
Common stock, $1 par value 75,000 75,000 75,000
Capital paid in excess of par 275,000
Retained earnings 337,602 510,731 648,528
Total stockholders' equity 687,602 860,731 998,028
Total liabilities and stockholders' equity 1,299,543 1,462,101 1,707,362
Ratio Analysis
Smith-John Widgets Inc. Conclusion
2009 2010 2011 2009 2010
A. Profitability
1 Profit Margin 4.0% 4.4% 3.5% Above Above
2 Return on assets 11.5% 11.8% 8.1% Above Above
3 Return on Common Equity 21.5% 20.1% 13.8% Above Above

B. Asset Utilization
4 Receivables turnover 15.0 13.5 11.4 Below Below
5 Inventory Turnover 14.4 11.8 9.4 Above Below
6 Fixed asset Turnover 7.60 6.15 4.98 Above Above
7 Total Asset Turnover 2.86 2.71 2.33 Above Above

C. Liquidity
8 Current ratio 2.61 2.40 2.08 Below Below
Calculations For Quick Ratio
9 Quick Ratio 1.59 1.33 1.14 Above Below
D. Debt Utilization
10 Debt Total Assets 47% 41% 42% Above Above
 Industry
Average
2011

Above 3.2
Above 6
Below 15.6

Below 8.5
Below 12
Below 5.75
Below 1.89

Below 3.16

Below 1.40

Above 37%