Eco-Products, Inc.
Financial Statements and Projections Common-Size
[In Dollars] Actual Actual Financial Statements
Yearend Yearend [Percent of Revenues]
Income Statements 2007 2008 2007 2008
Net Revenues 10,867,104 34,378,138 100.0% 100.0%
Cost of Goods Sold 7,726,455 26,041,166 71.1% 75.7%
Gross Profit 3,140,649 8,336,972 28.9% 24.3%
Operating Expenses
Bad Debt 141 44,735 0.0% 0.1%
Depreciation and Amortization 87,563 214,066 0.8% 0.6%
Employee Benefits 114,011 106,401 1.0% 0.3%
General and Administrative 494,061 1,957,315 4.5% 5.7%
Payroll Taxes 117,557 269,032 1.1% 0.8%
Occupancy Expense 349,668 265,610 3.2% 0.8%
Repairs and Maintenance 27,140 45,447 0.2% 0.1%
Salaries and Wages 1,778,282 3,216,385 16.4% 9.4%
Selling and Marketing Expenses 43,783 1,133,334 0.4% 3.3%
Net Other Income & (Expenses) -187,918 -242,303 -1.7% -0.7%
Net Income (Loss) Before Taxes -59,475 842,344 -0.5% 2.5%
Provision for Income Taxes
Current Tax Benefit 52,276 0 0.5% 0.0%
Deferred Tax Expense -29,000 -304,000 -0.3% -0.9%
Current Assets
Cash 51,667 235,618 0.9% 1.2%
Accounts Receivable, Net 1,330,562 3,109,920 23.6% 16.5%
Prepaid Expenses & Other Cur. Assets 728,776 1,010,028 12.9% 5.3%
Income Tax Receivable 54,506 193,148 1.0% 1.0%
Inventory 2,415,916 12,222,801 42.8% 64.7%
Deferred Income Tax Asset 42,000 127,000 0.7% 0.7%
Total Current Assets 4,623,427 16,898,515 81.9% 89.4%
Property and Equipment
Machinery and Equipment 641,773 1,161,317 11.4% 6.1%
Building Improvements 479,481 983,396 8.5% 5.2%
Net Property and Equipment 989,398 1,872,725 17.5% 9.9%
Intangible Assets
Trademarks 20,800 21,564 0.4% 0.1%
Other Intangible Assets 5,440 84,920 0.1% 0.4%
Total Intangible Assets 26,240 106,484 0.5% 0.6%
Less Accumulated Amortization -2,050 -5,254 0.0% 0.0%
Net Intangible Assets 24,190 101,230 0.4% 0.5%
Accounts Payable & Accrued Expenses 568,131 3,804,210 10.1% 20.1%
Accrued Payroll & Payroll Taxes 6,712 253,094 0.1% 1.3%
Accrued Vacation 39,356 84,755 0.7% 0.4%
Lines of Credit 2,843,242 8,043,568 50.3% 42.5%
Current Portion of Long-Term Debt 39,865 166,310 0.7% 0.9%
Current Portion of Capital Leases 37,919 88,856 0.7% 0.5%
Deferred Revenue 105,588 43,975 1.9% 0.2%
Loan from Stockholder 93,394 28,825 1.7% 0.2%
Other Current Liabilities 21,523 0 0.4% 0.0%
1,750,000 Shares Authorized
1,366,666 Shares Issued & Outstanding 0 13,667 0.0% 0.1%
Additional Paid-In-Capital 1,269,908 4,622,191 22.5% 24.5%
Retained Earnings 108,920 647,264 1.9% 3.4%
Total Stockholders’ Equity 1,535,128 5,452,472 27.2% 28.8%
Gross Profit Margin 28.9% 24.3%
Operating Profit Margin 1.2% 3.2%
Net Profit Margin -0.3% 1.6%
Sales or Revenues/Total Assets 1.924 1.819
Return on Assets -0.6% 2.8%
Total Debt to Total Assets 72.8% 71.2%
Return on Equity -2.4% 9.9%
Cash Conversion Cycle (in Days): 2007 2008
Inventory-to-Sale Conversion Period 114.1 171.3
Sale-to-Cash Conversion Period 44.7 33.0
Purchase-to-Payment Conversion Period 26.8 53.3
Cash Conversion Cycle 132.0 151.0
Eco-Products, Inc.
Financial Statements and Projections Forecast Basis: Mid-2007 Moderate Early-2008
[Dollars] Actual Percent of Forecast Forecast Forecast Actual
Income Statements 2007 2007 Revenues (Sales) 2008 2008 2008 2008
Net Revenues 10,867,104 Estimated Amounts 22,000,000 35,000,000 45,000,000 34,378,138
Cost of Goods Sold 7,726,455 0.711 x sales forecast 15,642,000 24,885,000 31,995,000 26,041,166
Gross Profit 3,140,649 6,358,000 10,115,000 13,005,000 8,336,972
Operating Expenses
Bad Debt 141 0.000 x sales forecast 0 0 0 44,735
Depreciation and Amortization 87,563 0.008 x sales forecast 176,000 280,000 360,000 214,066
Employee Benefits 114,011 0.010 x sales forecast 220,000 350,000 450,000 106,401
General and Administrative 494,061 0.045 x sales forecast 990,000 1,575,000 2,025,000 1,957,315
Salaries and Wages 1,778,282 *0.123 x sales forecast 2,706,000 4,305,000 5,535,000 3,216,385
Selling and Marketing Expenses 43,783 *0.016 x sales forecast 352,000 560,000 720,000 1,133,334
Total Operating Expenses 3,012,206 5,434,000 8,645,000 11,115,000 7,252,325
Operating Profit 128,443 924,000 1,470,000 1,890,000 1,084,647
Current Tax Benefit 52,276 0
Deferred Tax Expense -29,000 -304,000
Total Provision of Income Taxes 23,276 -246,400 -392,000 -504,000 -304,000
Net Income (Loss) -36,199 457,600 728,000 936,000 538,344
Prepaid Expenses & Other Cur. Assets 728,776 6.7% 0.067 x sales forecast 1,474,000 2,345,000 3,015,000 1,010,028
Income Tax Receivable 54,506 0.5% 0.005 x sales forecast 110,000 175,000 225,000 193,148
Inventory 2,415,916 22.2% 0.222 x sales forecast 4,884,000 7,770,000 9,990,000 12,222,801
Deferred Income Tax Asset 42,000 0.4% Held Constant 42,000 42,000 42,000 127,000
Total Current Assets 4,623,427 42.5% 9,298,598 14,768,405 18,975,950 16,898,515
Property and Equipment
Machinery and Equipment 641,773 5.9% *0.039 x sales forecast 858,000 1,365,000 1,755,000 1,161,317
Net Property and Equipment 989,398 9.1% 1,320,000 2,100,000 2,700,000 1,872,725
Intangible Assets
Trademarks 20,800 0.2% 0.002 x sales forecast 44,000 70,000 90,000 21,564
Other Assets
Deposits 10,000 0.1% 0.001 x sales forecast 22,000 35,000 45,000 31,368
Total Assets 5,647,015 52.0% 10,684,598 16,973,405 21,810,950 18,903,838
Accrued Vacation 39,865 0.4% 0.004 x sales forecast 88,000 140,000 180,000 84,755
Lines of Credit 2,843,242 26.2% *0.262 x sales forecast 5,764,000 9,170,000 11,790,000 8,043,568
Current Portion of Long-Term Debt 39,356 0.4% 0.004 x sales forecast 88,000 140,000 180,000 166,310
Current Portion of Capital Leases 37,919 0.3% 0.003 x sales forecast 66,000 105,000 135,000 88,856
Deferred Revenue 105,588 1.0% Held Constant 105,588 105,588 105,588 43,975
Loan from Stockholder 93,394 0.9% Held Constant 93,394 93,394 93,394 28,825
Total Current Liabilities 3,755,730 34.6% 7,414,982 11,678,982 14,958,982 12,513,593
Deferred Income Tax Liability 54,000 0.5% 0.005 x sales forecast 110,000 175,000 225,000 443,000
Deferred Lease Liability 36,383 0.3% 0.052 x sales forecast 66,000 105,000 135,000 0
Long-Term Capital Leases, Net of Current Por. 141,228 1.3% Held Constant 141,228 141,228 141,228 201,299
Long-term Debt, Net of Current Portion 124,546 1.1% Held Constant 124,546 124,546 124,546 293,474
Total Liabilities 4,111,887 37.8% 7,856,756 12,224,756 15,584,756 13,451,366
Stockholders’ Equity
Common Stock, $.001 Par Value
50,000,000 Shares Authorized
16,935,000 Shares Issued & Outstanding 156,300 1.4% Held Constant 156,300 156,300 156,300 169,350
Preferred Stock, $.001 Par Value
1,750,000 Shares Authorized
1,366,666 Shares Issued & Outstanding 0 Held Constant 0 0 0 13,667
Additional Paid-In-Capital 1,269,908 11.7% Held Constant 1,269,908 1,269,908 1,269,908 4,622,191
Retained Earnings 108,920 1.0% [+2008 Net Income] 566,520 836,920 1,044,920 647,264
Total Stockholders’ Equity 1,535,128 14.1% 1,992,728 2,263,128 2,471,128 5,452,472
*Additional Financing Needed 0 835,114 2,485,521 3,755,066 0
Total Liabilities & Stockholders’ Equity 5,647,015 52.0% 10,684,598 16,973,405 21,810,950 18,903,838
Notes on Projected Financial Statements
Income Statement:
*Salaries and Wages–reduced by 25% from the 16.4% 2007 relationship to reflect expected economies
*Selling and Marketing Expenses–increased 4 times the .4% 2007 relationship to reflect the need for higher expenditures
*Interest Expense was projected at one-half the 2007 percent of sales rate due to a likely slower growth rate for interest-bearing debt
*Assumes 35% Tax Rate for 2008 projections (Deferred Taxes were not projected due to insufficient data)
Balance Sheet:
*Property and Equipment was reduced to two-thirds of 2007 rate due to production being outsourced
*Lines of Credit were increased with sales under the assumption they would be available to finance working capital
*Additional Financing Needed is the amount of long-term debt and equity funds needed to finance projected sales growth