Carpino

Company

Memo
To The Shareholders of Carpino Company
From Learning Team A:
CC Instructor
Date February 7, 2011
Re: 2010 Financial Review

Message to the Shareholders

Dear Shareholders,

What an exciting and productive year the company had; ensuring plenty

more to come. We generated $88,000 in Revenue and produced Net Cash from

Operating activities of $70,000. This is an exceptional start and gives us

something to build from. Some of the other numbers do not look as positive, but

evaluation with perspective is necessary. They are further discussed in the

following paragraphs. The Free Cash Flow from Operating Expenses is in the

red $260,000. That was because of cash used for capital expenditures. This

was expecting in the first year of operation as we continue to establish ourselves

in the industry.

1
 Carpino Company expected to see negative cash flow from investing

activities and positive cash flow from financing activities during our first year. We

saw that with financing operations generating $410,000 in cash and an outflow of

$325,000 for investing activities. As a new and growing company we had to

purchase capital equipment and fixtures to enable us to increase our operations.

The area of uncertainty was in cash flow from operations. We generated a

positive cash flow and that shows we are clearly in the growth phase of the

corporate lifecycle. In one year we have gone from a brand new company with

no industry presence to generating cash from our operations and increased

capacity through capital expenditures.

This was a momentous first year that was full of promise. The coming

years hold more advancement for us as we continue to grow at Carpino

Company.

Sincerely,

Learning Team A

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