Dec-16 Dec-15 Dec-14 Dec-13 Dec-12

Total Current Assets $ 35,508 $ 40,356 $ 27,730 $ 32,084 $ 31,358

returns -0.1201308 0.45531915 -0.1357063 0.02315199
1+ returns 0.87986916 1.45531915 0.86429373 1.02315199

Total Liabilities $ 46,219 $ 41,083 $ 35,179 $ 34,102 $ 33,148

returns 0.12501521 0.1678274 0.03158173 0.02878002
1+ returns 1.12501521 1.1678274 1.03158173 1.02878002

Total Shareholders' Equity $ 67,108 $ 61,982 $ 56,777 $ 58,256 $ 51,203

returns 0.08270143 0.09167445 -0.0253879 0.13774584
1+ returns 1.08270143 1.09167445 0.97461206 1.13774584
Average CAGR

5.57% 3.16%

8.83% 8.67%

7.17% 7.00%
 Blue Sky Inc.
Income Statement
For the Year Ended Dec. 31, 2017 ($ in 000's)
2017 2016
Sales 7,550.00 6,150.00
Cost of Goods Sold 5,750.00 4,550.00
Gross Profit 1,800.00 1,600.00
Selling and G&A Expenses 820.00 730.00
Fixed Expenses 200.00 200.00
Depreciation 120.00 100.00
Lease Expense 150.00 150.00
EBIT 510.00 420.00
Interest Expense 350.00 300.00
Earnings Before Taxes 160.00 120.00
Taxes 64.00 48.00
Net Income 96.00 72.00

Notes:
Tax Rate 40.00% 40.00%
Shares Outstanding 100,000 80,000
Earnings per Share $0.96 $0.90
Dividends per Share $0.48 $0.45
Addition to RE per Shar $0.48 $0.45
 Blue Sky Inc.
Balance Sheet
As of Dec. 31, 2017 ($ in 000's)
Assets 2017 2016
Cash 108.00 50.00
Marketable Securities 150.00 100.00
Accounts Receivable 450.00 350.00
Inventory 1,250.00 850.00
Prepaid Expenses 120.00 40.00
Total Current Assets 2,078.00 1,390.00
Plant & Equipment 5,350.00 4,800.00
Accumulated Depreciation 410.00 290.00
Net Fixed Assets 4,940.00 4,510.00
Long-term Investments 450.00 360.00
Total Assets 7,468.00 6,260.00
Liabilities and Owners' Equity
Accounts Payable 420.00 380.00
Notes Payable 150.00 100.00
Accrued Expenses 150.00 100.00
Other Current Liabilities 200.00 180.00
Total Current Liabilities 920.00 760.00
Long-term Debt 2,900.00 2,500.00
Total Liabilities 3,820.00 3,260.00
Common Stock ($ 25par) 2,500.00 2,000.00
Additional Paid-in-Capital 600.00 500.00
Retained Earnings 548.00 500.00
Total Shareholder's Equity 3,648.00 3,000.00
Total Liabilities and Owners' Equity 7,468.00 6,260.00
 Blue Sky Inc.
Statement of Cash Flows
For the Year Ended Dec. 31, 2017 ($ in 000's)
Cash Flows from Operations
Net income 96.00
Depreciation Expense 120.00
Change in Marketable Securities -50.00
Change in Accounts Receivables -100.00
Change in Investories -400.00
Change in Prepaid Expenses -80.00
Change in Accounts Payable 40.00
Change in Accrued Expenses 50.00
Change in Other Current Liabilities 20.00
Total Cash Flows from Operations -304.00
Cash Flows from Investing
Change in Plant & Equipment -550.00
Change in Long-term Investments -90.00
Total cash Flows from Investing -640.00
Cash Flows from Financing
Change in Short-term Notes Payables 50.00
Change in Long-term Debt 400.00
Change in Common Stock 500.00
Change in Paid-in-Capital 100.00
Cash Dividends Paid to Shareholders -48.00
Total Cash Flows from Financing 1,002.00
Net Change in Cash Balance 58.00

Check answer against Balance Sheet

Beginning Cash From Balance Sheet 108.00
Ending Cash From Balance Sheet 50.00
Net Change in Cash Balance 58.00
 Blue Sky Inc.
Common-Size Income Statement
For the Year Ended Dec. 31, 2017 ($ in 000's)
2017 2016
Sales 100.00% 100.00%
Cost of Goods Sold 76.16% 73.98%
Gross Profit 23.84% 26.02%
Selling and G&A Expenses 10.86% 11.87%
Fixed Expenses 2.65% 3.25%
Depreciation 1.59% 1.63%
Lease Expense 1.99% 2.44%
EBIT 6.75% 6.83%
Interest Expense 4.64% 4.88%
Earnings Before Taxes 2.12% 1.95%
Taxes 0.85% 0.78%
Net Income 1.27% 1.17%

Notes:
Tax Rate 40.00% 40.00%
Shares Outstanding 100,000 80,000
Earnings per Share
Dividends per Share
Addition to RE per Share
 Blue Sky Inc.
Common-Size Balance Sheet
As of Dec. 31, 2017 ($ in 000's)
Assets 2017 2016
Cash 1.45% 0.80%
Marketable Securities 2.01% 1.60%
Accounts Receivable 6.03% 5.59%
Inventory 16.74% 13.58%
Prepaid Expenses 1.61% 0.64%
Total Current Assets 27.83% 22.20%
Plant & Equipment 71.64% 76.68%
Accumulated Depreciation 5.49% 4.63%
Net Fixed Assets 66.15% 72.04%
Long-term Investments 6.03% 5.75%
Total Assets 100.00% 100.00%
Liabilities and Owners' Equity
Accounts Payable 5.62% 6.07%
Notes Payable 2.01% 1.60%
Accrued Expenses 2.01% 1.60%
Other Current Liabilities 2.68% 2.88%
Total Current Liabilities 12.32% 12.14%
Long-term Debt 38.83% 39.94%
Total Liabilities 51.15% 52.08%
Common Stock ($ 25par) 33.48% 31.95%
Additional Paid-in-Capital 8.03% 7.99%
Retained Earnings 7.34% 7.99%
Total Shareholder's Equity 48.85% 47.92%
Total Liabilities and Owners' Equity 100.00% 100.00%
 Sweet Dreams Corp.
Income Statement
For the Year Ended Dec. 31 2017
2017 2016
Sales 3,074,000 2,567,000
Cost of Goods Sold 2,088,000 1,711,000
Gross Profit 986,000 856,000
Selling and G&A Expenses 294,000 295,000
Fixed Expenses 35,000 35,000
Depreciation Expense 239,000 223,000
EBIT 418,000 303,000
Interest Expense 93,000 91,000
Earnings Before Taxes 325,000 212,000
Taxes 94,000 64,000
Net Income 231,000 148,000

Tax Rate 28.92% 30.19%

 Sweet Dreams Corp.
Balance Sheet
As of Dec. 31 2017
Assets 2017 2016
Cash 431,000 339,000
Accounts Receivable 503,000 365,000
Inventories 289,000 300,000
Total Current Assets 1,223,000 1,004,000
Gross Fixed Assets 4,669,000 4,322,000
Accumulated Depreciation 2,295,000 2,056,000
Net Fixed Assets 2,374,000 2,266,000
Total Assets 3,597,000 3,270,000
Liabilities and Owners' Equity
Accounts Payable 382,000 270,000
Short-term Notes Payable 79,000 99,000
Accrued Expenses 159,000 114,000
Total Current Liabilities 620,000 483,000
Long-term Debt 1,023,000 967,000
Total Liabilities 1,643,000 1,450,000
Common Stock 819,000 808,000
Retained Earnings 1,135,000 1,012,000
Total Shareholder's Equity 1,954,000 1,820,000
Total Liabilities and Owners' Equity 3,597,000 3,270,000
 Sweet Dreams, Corp.
Industry
Ratios 2017 2016 2017 Analysis
Liquidity Ratios
Current Ratio 1.97x 2.08x 2.50x Bad
Quick Ratio 1.51x 1.46x 0.60x Good
Efficiency Ratios
Inventory Turnover Ratio 7.22x 5.70x 6.50x Good
Accounts Receivable Turnover Ratio 6.11x 7.03x 8.00x Bad
Average Collection Period 58.91 days 51.19 days 40.00 days Bad
Fixed Asset Turnover 1.29x 1.13x 2.00x Ok
Total Asset Turnover 0.85x 0.79x 2.00x Ok
Leverage Ratios
Total Debt Ratio 45.68% 44.34% 50.00% Ok
Long-Term Debt Ratio 28.44% 29.57% 20.00% Ok
LTD to Total Capitalization 34.36% 34.70% 30.00% Ok
Debt to Equity 0.84x 0.80x 0.90x Ok
Long-Term Debt to Equity 52.35% 53.13% 40.00% Ok
Coverage Ratios
Times Interest Earned 4.49x 3.33x 2.50x Good
Cash Coverage Ratio 7.06x 5.78x 3.50x Good
Profitability Ratios
Gross Profit Margin 32.08% 33.35% 20.00% Ok
Operating Proft Margin 13.60% 11.80% 7.00% Good
Net Proft Margin 7.51% 5.77% 5.00% Good
Return on Total Assets 6.42% 4.53% 5.00% Good
Return on Equity 11.82% 8.13% 8.00% Good
Return on Common Equity 11.82% 8.13% 10.00% Good

Sweet Dreams, Corp.

Economic Profit Calculations
2017 2016
Tax Rate 28.92% 30.19%
NOPAT 297,102 211,528
Total Operating Capital 3,056,000 2,886,000
After-tax Cost of Capital 12% 12%
Dollar Cost of Capital 366,720 346,320
Economic Profit (69,618) (134,792)
ROIC 9.72% 7.33%
 Retirement Worksheet with Growing Income and Savings
Annual Retirement Income Need 150,000
Years until Retirement 30
Years in Retirement 35
Expected Inflation Rate 2.50%
Rate of Return before Retirement 8.00%
Rate of Return during Retirement 5.00%
Savings Required at Retirement -$3,418,565.73
Investment Required Today 339,727.94
Annual Investment required 30,177.16
First Annual Investment required 23,605.65
Future value of a Graduate Annuity -$3,418,565.73

Year Savings
Cost ($120,000)
1 50,000
2 40,000
3 30,000
4 20,000
5 10,000

I% 12%
NPV ($3,731.35)
IRR 10.39%

I% 9%
NPV $3,372.08
IRR

Year Students
1 2,500
2 2,700
3 3,100
4 3,500
5 4,100
Growth Rate 13.16%

Monthly Payments
Car Loan Amount $45,000
Interest Rate 5.00%
Loan Life in Years 3
Monthly Payment ($1,348.69)