Hyperion Industries Inc. manufactures and sells elevated widget
clamps, and had sales last year of $3,200,000, which was supported by a 31
December inventory of $320,000 and accounts receivable of $280,000, which in
turn were financed in part by a $475,000, 6%, one-year note from their
bank. Material used in the production of
these clamps last year was purchased for $1,008,000, and labor used directly in
production came to $440,000. Fixed
assets of $3,972,000 (net of accumulated depreciation) was financed partially
by the $3,450,000 still outstanding in long-term debt in the form of a 20-year,
7% bond. The bond debt schedule calls
for the repayment of $200,000 of the principal in the coming year. The $475,000 note was rolled over last year,
and is expected to be rolled over again this coming year; also at 6%. Sales commissions and direct sales expenses
came to $380,000. Rent and other
overhead totaled $228,000, accounts payable totaled $185,000 at the end of the
year, their cash balance was $62,500, and depreciation for the year was
$415,000. Plans call for the purchase of
a new widget milling machine at the end of next year for $500,000.
Depreciation for next year is expected to be $365,000. Hyperion's income tax is usually around 25%
of income and dividends of 25 cents per share are paid each year for each of
the 100,000 outstanding shares.
Hyperion expects sales to increase by five percent per
year for the next three years. Produce a
projected earnings report and balance sheet for next year, as well as a
statement of cash flow.