Submitted by: Submitted by bbrushlow
Views: 734
Words: 434
Pages: 2
Category: Business and Industry
Date Submitted: 06/07/2011 09:55 AM
MEMORANDUM TO: The Stockholders of Chemalite, Inc
SUBJECT: 2003 Financial Performance of Chemalite, Inc
The attached report highlights the Corporation’s financial activities and results for the period ending December 31, 2003.
Executive Summary
• For the six months ending December 31, 2003 Chemalite had sales of $754,500 with $69,500 uncollected at year end.
• Ended 2003 with a cash balance of $113,000
• Net income for 2003 $58,750
The following is an assessment of each of the three major financial reports: statement of cash flows, income statement and balance sheet.
Statement of Cash Flows
Prior to beginning operations in July 2003 the following cash inflows/outflows were completed:
• Cash Inflows:
o Stock issued - 375,000 shares at $1.00 a share for a total cash inflow of $375,000
• Cash outflows:
o Incorporation costs of $7500
o Machinery costs of $62,500
o Inventory costs of $75,000
Resulting in a net cash outlay of $145,000
From the period of July 1 to December 31, 2003 the following cash inflows/outflows occurred:
• Cash Inflows:
o Cash collected from Customers of $685,000
• Cash Outflows:
o Inventory costs of $175,000
o Advertising costs of $22,500
o Manufacturing costs of $350,000
o Admin costs of $80,000
o Equipment costs of $150,000
o Interest on loan $750
o Prototype cost of $23,750
Resulting in a net cash outlay of $802,000
While there was $947,000 in cash outlays throughout 2003 to get Chemalite established and running, at December 31, 2003 Chemalite had a cash balance of $113,000. Equipment costs account for $212,500 of the $947,000 in cash outlays. It would be expected going forward this cost would be significantly reduced to maintenance costs on the current equipment. Manufacturing costs of $350,000 appear to be a bit on the high side, but as operations continue the manufacturing process could be stream lined to reduce costs.
Income Statement
• Total revenue of $754,500
• Cost of goods sold...