Cash Flow Statement

The Cash Flow Statement examines what happened in the Cash Account during the year. Cash injections appear as positive numbers and cash withdrawals as negative numbers. The Cash Flow Statement is an excellent tool for diagnosing emergency loans. When negative cash flows exceed positives, you are forced to seek emergency funding. For example, if sales are bad and you find yourself carrying an abundance of excess inventory, the report would show the increase in inventory as a huge negative cash flow. Too much unexpected inventory could outstrip your inflows, exhaust your starting cash and force you to beg for money to keep your company afloat. Cash Flows from Operating Activities: 2026 2025 Net Income (Loss) $33,996 $25,952 Depreciation $13,562 $11,522 Extraordinary gains/losses/writeoffs $0 $6 Accounts Payable $1,523 $1,785 Inventory $2,576 ($2,576) Accounts Receivable ($3,217) ($3,067) Net cash from operations $48,440 $33,623 Cash Flows from Investing Activities:   Plant Improvements ($30,600) ($14,804) Cash Flows from Financing Activities:   Dividends Paid ($11,908) $0 Sales of Common Stock $0 $0 Purchase of Common Stock $0 ($4,000) Cash from long term debt $0 $9,000 Retirement of long term debt $0 ($20,850) Change in current debt (net) $14,150 $19,850 Net cash from financing activities $2,242 $4,000 Net change in cash position $20,082 $22,819 Closing cash position $93,163 $73,080

Annual Report Andrews C105071 Round: 7 Dec. 31, 2026

2026 Income Statement (Product Name:) Able Acre Adam Aft NA Ace NA NA 2026 Total Common Size Sales $69,511 $77,431 $65,969 $0 $0 $71,787 $0 $0 $284,697 100.0%                     Variable Costs:                     Direct Labor $19,050 $35,855 $19,610 $0 $0 $18,341 $0 $0 $92,857 32.6% Direct Material $22,943 $19,923 $21,470 $0 $0 $26,569 $0 $0 $90,905 31.9% Inventory Carry $0 $0 $0 $0 $0 $0 $0 $0 $0 0.0% Total Variable $41,993 $55,778 $41,080 $0 $0 $44,910 $0 $0 $183,761 64.5%   Contribution Margin $27,518 $21,652 $24,889 $0 $0 $26,876 $0 $0 $100,936 35.5%                       Period Costs:                     Depreciation $3,640 $5,200 $2,800 $2 $0 $1,920 $0 $0 $13,562 4.8% SG&A: R&D $372 $618 $321 $0 $0 $423 $0 $0 $1,735 0.6%     Promotions $1,400 $1,400 $1,400 $0 $0 $1,400 $0 $0 $5,600 2.0%     Sales $2,200 $2,250 $2,100 $0 $0 $2,200 $0 $0 $8,750 3.1%     Admin $954 $1,063 $905 $0 $0 $985 $0 $0 $3,907 1.4% Total Period $8,566 $10,531 $7,527 $2 $0 $6,929 $0 $0 $33,554 11.8%   Net Margin $18,951 $11,122 $17,363 ($2) $0 $19,948 $0 $0 $67,382 23.7%                     Definitions: Sales: Unit sales times list price. Direct Labor: Labor costs incurred to produce the product that was sold. Inventory Carry Cost: the cost to carry unsold goods in inventory. Depreciation: Calculated on straight-line 15-year depreciation of plant value. R&D Costs: R&D department expenditures for each product. Admin: Administration overhead is estimated at 0.7% of sales. Promotions: The promotion budget for each product. Sales: The sales force budget for each product. Other: Charges not included in other categories such as Fees, Write Offs, and TQM. The fees include money paid to investment bankers and brokerage firms to issue new stocks or bonds plus consulting fees your instructor might assess. Write-offs include the loss you might experience when you sell capacity or liquidate inventory as the result of eliminating a production line. If the amount appears as a negative amount, then you actually made money on the liquidation of capacity or inventory. EBIT: Earnings Before Interest and Taxes. Short Term Interest: Interest expense based on last year's current debt, including short term debt, long term notes that have become due, and emergency loans. Long Term Interest: Interest paid on outstanding bonds. Taxes: Income tax based upon a 35% tax rate. Profit Sharing: Profits shared with employees under the labor contract. Net Profit: EBIT minus interest, taxes, and profit sharing.   Other $5,000 1.8% EBIT $62,382 21.9% Short Term Interest $4,095 1.4% LongTerm Interest $4,918 1.7% Taxes $18,679 6.6% Profit Sharing $694 0.2% Net Profit $33,996 11.9%

Annual Report Page 2