The following financial information relates to the past five years of Titus Corporation’s operations: Titus Corporation is happy to announce that is has gained control of its income taxes. They have been reduced each year for several years now. In fact, during the year 2015 income taxes have reached a five year low of %239849. Even better, theses tax reductions have occurred during a period in which sales have consistently grown. During the year 2015, sales reached a record high of $4,098,728. The cost of goods which were sold during the year was $1,523,983. Operating expenses for the year 2015 were $1,173,665. Interest expense for the same period was $169,200. Management is particularly proud to announce that the company has done so well that even with its strong record of stockholder dividends and the recession it has been able to maintain its debt service by consistently paying down its bonded indebtedness by $60,000 per year and astoundingly even had enough profit to purchase $1,440,000 of new equipment this year. Some of the new programs instituted by senior management this year included promoting a newly revised credit policy which should keep sales strong at the company. Additionally, loss of sales from stock-outs has been virtually eliminated by a new management directive intended to maintain more substantial inventories, Further, selling expenses were increased to $249,916 in the year 2015. All of these decisions were intended to build sales. Management believes that larger inventories will prove profitable in several ways as follows. Purchases discounts will be achieved for purchases of large quantities of raw materials. Interruptions in the production departments which are often caused by uneven materials flow will be reduced or eliminated. And, as mentioned above, sales lost due to stock-outs of finished goods will be eliminated. Inventories as of December 31 of each year are as follows: 2015 2014 2013 2012 2011 Raw Materials 301, 090 175,745 49,067 29,612 20,933 Works in process 158, 434 124,800 72,000 23,852 19,893 Finished Goods 310, 134 279,600 40,933 30,536 26,741 Total 769, 658 580,145 162,000 84,000 67,567 Depreciation and amortization for the year 2015 are as follows: Building Depreciation 2,500 Equipment Depreciation 386,000 Patent Amortization 24,000 During the year 2015, $106,000 was paid for parcel of land and $350,000 was paid for a building. Additionally, long-term investments which had cost Titus Corporation $50,000 were sold for $75,000. Other December 31, 2015 asset balance was cash $32,845 accounts receivable $1,015,585, and prepaid expense $36,852. In 2015 senior management negotiated a mortgage with a local bank in the amount of $880,000. Other liability balances at December 31, 2015were as follows: accounts payable $332,019, accrued operating expenses $88,974, income taxes payable $117,000 and dividends payable $15,000. Bonds payable have already been discussed. No common stock was issued or retired during the year 2015. Dividends were declared and paid as follows: 2015 2014 2013 2012 2011 Cash dividends declared 15,000 29,526 332,176 332,890 330,000 Cash dividends paid 15,000 29,526 332,176 332,890 330,000
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