FINANCIAL ANALYSIS

FINANCIAL ANALYSIS

Hydromaint Inc.

Balance Sheet

As of December 31, 2005

Assets

Current Assets

Cash $59,358

Account receivable$179,900

Less: Allowance for Bad debts (40,200)

Account Receivable, net 139,700

Merchandise Inventory177,500

Supplies Inventory21,921

Trading Securities46,400

Deferred Income Tax Short Term8,940

Total Current Assets $453,819

Property, Plant & Equipment

Land 100,000

Buildings215,000

Less: Accumulated Depreciation(10,750)204,250

Equipment- at cost 30,000

Less: Accumulated Depreciation(30,000)-

Trucks- at Cost392,286

Less: Accumulated Depreciation(196,972)195,314

Leased Building 380,000

Less: Accumulated Depreciation(57,000)323,000

Total Property, Plant & Equipment $822,564

Other Assets

Equity Investment 1,733,333

Long Term Equity Security 339,634

Deferred Pension Cost 40,075

Licensing Cost 30,000

Less: Amortization(30,000)

Licensing Cost, net -

Total Assets $ 3,389,425

Liabilities & Shareholders' Equity

Liabilities

Current Liabilities

Account Payable$135,691

Unearned Revenue100,000

Income Tax payable48,276

Interest Payable35,557

Short Term portion of L-T Debt77,556

Total Current Liabilities $397,080

Long Term Liabilities

Note Payable 78,022

Capital Lease Liability317,438

Accrued Pension Liability52,230

Deferred income Tax Long Term 3,513

Total Long Term Liabilities 451,203

Total Liabilities 848,283

Shareholder's Equity

Preferred Stock (10% convertible, non-cumulative, $700,000

$100 par value, 7000 shares issued & outstanding)

Common Stock ($ 10 par value, 25000 shares authorized, 120,000

12,000 shares issued, all at par)

Additional paid in capital- preferred stock 875,000

Retained Earnings 846,142

Total Owner's Equity 2,541,142

Total Liabilities & Owner Equity $3,389,425

Hydromaint Inc.

Income Statement & Retained Earnings

As of December 31, 2005

Revenues & Gains

Sales of goods and services $ 4,231,033

Cost of goods and services sold 2,383,848

Gross Profit 1,847,185

Other Expenses

Selling & Administrative Expenses$ 1,000,262

Depreciation & Amortization Expense 90,579

Total Operating Expenses 1,090,841

Income from Operations 756,344

Other Revenues & Expenses

Unrealized gains (losses) on trading securities 17,325

Realized gains on trading & securities 4,000

Equity in earnings of investees 26,493

Dividend Income 1,500

Interest Expense (51,754)

Total Other Revenues & Expenses (2,436)

Income Before Income Tax 753,908

Income Tax Expense 208,578

Net Income $545,330

Retained Earnings at January 1 $ 390,812

Dividend Declared $ (90,000)

Retained Earnings at December 31 $ 846,142

Income Per common share $ 39.04

Hydromaint Inc.

Statement of cash flow

For the Year Ended December 31, 20X6

Cash Flow from Operating Activities

Net Income $ 545,330

Reconciliation Of Net Income

Depreciation and Amortization (+)

$ 90,579 Increase in Accounts Receivable,Net (-)

$ (40,700)

Increase in Merchandise lnventory (-) $ (60,710)

Increase in Supplies Inventory (-)

$ (1,000)

Increase in Trading securities (-)

$ (21,325)

Decrease tor Dererred Income Tax- short term (+)

$ 2,138 Income from LS-Pump/Valve (-)

$ (11,333)

Increase in Deferred Pension costs (-)

$ (19,391)

Decrease in Accrued Pension Liability (-) $ (10,729)

Decrease for deferred income tax - long term (-) $ (13,155)

Increase in Accounts Payable (+) $ 89,900 Decrease in Unearned Contract Revenue (-) $ (33,333)

Decrease in Interest Payable (-) $ (7,267)

Increase in Income Tax Payable $ 16,535 $ (19,791)

Net cash provided by operating activities $ 525,539

Cash Flow from Investing Activities Purchase of Land (-)

$ ...