Sapid Sweets is a privately owned company that has seen increases in income after taxes, gross margin, and operating income compared to last year. They are considering introducing a new line of energy bars, which would require a new plant and equipment purchase. An analysis shows the energy bars could improve Sapid Sweets' finances and ratios, allowing them to perform better than competitors Hersey and Rocky Mountain Chocolates. The projected results estimate the energy bars would see a 19% return on investment and allow Sapid Sweets to break even within 5.8 years.

1. Financial Statement

2. Introduction
• Sapid Sweets is a privately owned company that was purchased in
1975
• The Company has a limited number of shareholders which is owned
majority by Simone and Joseph
• The company has decided to introduce a new line of energy bars and
therefore a new plant and equipment needs to be purchased

3. Strengths – Financial Statement and Analysis
• One of the highest points of our year was our income after Taxes in
which we had $65,386 which has grown from lasts years $56,155
$65,386 - $56,155 = increase of $9231
• However with the rest of our finances down from last year the energy
bar would greatly improve our numbers.
• One of the biggest changes we saw was the improvement of our Gross
Margin, last year it was $263,857 and this year it was $325,592.
$325,595 - $263,857 = Increase of $88,738
• Our operating income also increased as last year it was $100,847 and
this year it is $116,233
$116,233 - $100,847 = $15,386

4. Comparing Competition
• Comparing our company with Hersey and Rocky Mountain Chocolates
the following shows are strengths against the competition
Ratios Sapid Sweets Rocky Mountain Hersey
Current Ratio 3.62 2.14 1.77
Quick Ratio 2.92 1.58 1.30
Net Operating 22% 13% 19%
Return on Sales 12% 5% 6%
Return on Total
Assets
13% 6% 8%

5. Projected Results
• With our newest energy bar on the market our payback period would
be 5.8 years and our return on this investment would be 19%
• If we wanted to break even based on units, we would need to sell
171,429
• If we wanted to break even by Revenue we would need to make over
$600,000
• If we sold 1,900,000 Units , our total cost would be $1,962,500
however our revenue would be $3,325,000 which would give us a
difference of $1,362,500

6. Conclusion
• Our current Z Score is 2.74 which is in the Grey Zone.
• We would be getting back 19% on this investment
• With out current Ratio being 3.62 we are currently ahead of Hersey's
and Rocky Mountain Chocolate, with the introduction of our new
energy bar are current ratio could increase even more
• With our Gross Margin increased this year, we can expect it to
increase even more at the end of next year