Statement of earnings(for years ending January 31)

2004 2005 2006Net sales 930,110 1,599,920 2,066,820Cost of goods sold 644,190 1,171,760 1,476,840Gross profit 285,920 428,160 589,980Operating expensesWages and comissions 183,620 253,910 306,170Rent 19,430 22,200 11,100Provision for doubtful accounts 6,710 0 0General Selling expenses 29,100 27,560 23,860General Administratitve expenses 76,430 104,720 132,850Amortization 0 10,300 24,360Total operating expenses 315,290 418,690 498,340Interest expense 27,230 29,220 33,750

Net income before tax -56,600 -19,750 57,890Income tax 0 0 0Net Income (loss) -56,600 -19,750 57,890

Statement of Retained Earnings(for years ending January 31)

2004 2005 2006Beginning retained earnings 0 -56,600 -76,350Add: net income -56,600 -19,750 57,890Less: dividends 0 0 0Ending retained earnings -56,600 -76,350 -18,460

Balance Sheets(as at January 31)

2004 2005 2006ASSETSCurrent assetsCash 86,060 17,510 1,420Accounts receivable, net 128,500 201,670 338,690Inventory 308,980 342,080 474,630Prepaid expenses 3,020 3,020 1,740Total current assets 526,560 564,280 816,480Fixed AssetsLand 0 60,880Automobiles 34,350 34,350 47,850Building 122,940Equipment 3,990Sub Total 34,350 34,350 235,660Less: acumulated amortizatio 10,300 34,660Net fixed assets 34,350 24,050 201,000

Other assetsGoodwill 30,000 30,000 30,000Deferred charges 6,570 3,850 2,750

TOTAL ASSETS 597,480 622,180 1,050,230

LIABILITIESCurrent liabilitiesAccounts payable 184,640 290,740 502,500Other current liabilities 15,790 11,850 35,850Total current liabilities 200,430 302,590 538,350Long term liabilitiesbank loan 126,900 101,700 76,500Transport loan 30,240 17,730 5,210Mortgage payable 196,510 176,510 176,510CCB mortgage payable 0 0 172,120Total long term liabilities 353,650 295,940 430,340EquityCommon Stock 100,000 100,000 100,000Retained earnings -56,600 -76,350 -18,460Total Equity 43,400 23,650 81,540

TOTAL LIABILITIES & EQUITY 597,480 622,180 1,050,230

Financial Ratios(as at January 31)

2004 2005 2006Net sales 100.00% 100.00% 100.00% 100.00%Cost of goods sold 69.26% 73.24% 71.45% 67.90%Gross profit 30.74% 26.76% 28.55% 32.10%Operating expensesWages and comissions 19.74% 15.87% 14.81%Rent 2.09% 1.39% 0.54%Provision for doubtful accounts 0.72% 0.00% 0.00%General Selling expenses 3.13% 1.72% 1.15%General Administratitve expenses 8.22% 6.55% 6.43%Amortization 0.00% 0.64% 1.18%Total operating expenses 33.90% 26.17% 24.11%Interest expense 2.93% 1.83% 1.63%

Net Income (loss) -6.09% -1.23% 2.80% 2.80%

LIQUIDITYCurrent ratio 2.63 1.86 1.52 1.80 Acid test 1.09 0.73 0.63 0.60 Working capital 326,130 261,690 278,130

EFFICIENCYAge of receivables 50 46 60 52.4Age of inventory 175 107 117 Age of payables 105 91 124

STABILITYNet worth to total assets 7.3% 3.8% 7.8%EBIT -29,370 9,470 91,640EBITDA -29,370 19,770 116,000EBIT / interest 0.3 2.7 3.6EBITDA / Interest 0.7 3.4

GROWTH 2005/04 2006/05Sales 72% 29%Net incomeTotal assets 4% 69%Equity -46% 245%

2006 selected industry ratios (where available)

Statement of cash flows(for years ending January 31)

2005 2006OPERATIONSNet income -19,750 57,890Adjustments to cash basisAmortization 10,300 24,360Accounts receivable net -73,170 -137,020Inventory -33,100 -132,550Prepaid expenses 0 1,280Accounts payable 106,100 211,760Other current liabilities -3,940 24000 Net cash flo from operations -13,560 49,720

FINANCING ACTIVITIESBank Loan -25,200 -25,200Transport loan -12,510 -12,520Mortgage payable -20,000 0CCB mortgage payable 172,120 Net cash flow from financing -57,710 134,400

INVESTING ACTIVITIESFixed assets 0 -201,310Deferred charges 2,720 1,100 Net cash flow from investing 2,720 -200,210 Net cash flow -68,550 -16,090Beginning cash 86,060 17,510 Ending cash 17,510 1,420