The net sales of Gainesboro Machine Tools Corporation fell by 5% from $858,263,000 to $815,979,000 in 2003 and 7% from $815,979,000 to $756,638,000 in 2004. These drops in sales are not surprising because the company was going through a restructuring phase. There sales are then projected to increase to $870,000,000 in 2005, this would be an increase of around 6.5%. This projection can be contributed to the company’s new Artificial Workforce products. The company expected domestic revenues from these products to total $90M in 2005 and $150M in 2006. They had also expected to receive $150M in revenue from international sales by 2007. The companies cost of sales has dropped in both 2003 and 2004, this makes sense and is consistent with the drop in sales over these years. Although from 2003 to 2004 their sales dropped 7% and their cost of sales only dropped .50%. This does not look good and will effect gross profits. The company’s gross profits weren’t effected much in 2003, dropping from $317,516,000 to $314,522,000 is only a drop of less than 1%, but in 2004 the company took a huge hit to their gross profit. In 2004 the company experienced an 18% loss to their gross profit dropping from $314,522,000 to $257,759,000. This is caused by the big drop and sales and little change in cost of sales, and can be a cause for concern. Even with this big hit to gross profit Gainesboro expects gross profits to jump back to normal in 2005. The selling, general & administrative costs of the company have fluctuated over these 3 years. It dropped from $229,971,000 to $223,634,000 in 2003 which is great to see because these are costs Gainesboro can control and when sales drop controlling costs become much more important. In 2004 SG&A cost rose back to $231,008 but the forecast projects that they will drop down to $211,500,000 in 2005. If they are able to successfully do this it