ProsynergyBookkeeping

April 2026 Insights for Shertzer Equipment Group

Prepared by Tim · Prosynergy Bookkeeping · Accrual Basis

📹 Video Walkthrough

April Revenue

$640,758

▼ 23.2% vs March

Net Income

$168,947

▼ 23.5% vs March

Cash in Bank

$15,841

⚠ Thin — LOC active

Profit Quality

0.55

↓ Earnings tied up in inventory

"April was Shertzer's strongest operating month of the year — but a $333K inventory build and $75K owner draw kept cash at the line."

Three Power Insights

Best Gross Margin of the Year — By a Wide Margin

April hit 20.5% gross margin and $131K in gross profit — the best of 2026, nearly double February's 9.3%. Operating income was $93K, more than the prior three months combined. COGS fell faster than revenue as buying efficiency improved.

→ Identify which equipment categories drove the strongest margins and prioritize those in May purchasing.

The LOC Is Working Hard — Inventory Needs to Move

The Univest LOC jumped $319K in April to fund a $333K inventory build, and now sits at $541K. Despite $93K in operating profit, cash ended at $15,841 — earnings went straight into stock.

→ Every unit sold in May directly pays the LOC back down. Focus sales on the newest inventory additions.

One Receivable Is Past Due — Needs a Call This Week

Philip Miller (CA) is $37,800 and over 91 days old. The rest of the AR book is clean — $107K is fresh in the 1–30 day bucket, all current customers.

→ Reach out this week and get a clear payment commitment before it ages further.

Profit & Loss Summary — Jan through Apr 2026

	Jan	Feb	Mar	Apr	4-Mo Avg
Revenue	$351,064	$459,375	$833,671	$640,758	$571,217
Cost of Goods Sold	($304,633)	($416,724)	($730,492)	($509,509)	($490,340)
Gross Profit	$46,431	$42,651	$103,179	$131,249	$80,877
Gross Margin %	13.2%	9.3%	12.4%	20.5% ▲	14.2%
Operating Expenses	($37,446)	($33,364)	($67,299)	($37,911)	($44,005)
Net Operating Income	$8,985	$9,287	$35,880	$93,339 ▲	$36,873
Asset / Other Income	$100,140	$245,650	$184,795	$75,609	$151,548
Net Income	$109,125	$254,937	$220,675	$168,947	$188,421

Cash Flow Waterfall — April 2026

What This Means

The LOC Is the Engine Without the $319K Univest draw, the business would have been $243K short on cash. The LOC funded the inventory build as designed.

Profits Went Into Stock $93K in operating income was absorbed by the $333K inventory build. The earnings aren't lost — they're sitting in equipment waiting to sell.

Asset Sales Declining April's $76K was the lowest of the year (Feb $246K, Mar $185K). This reduces the income cushion going forward.

Large Owner Distribution $75K in owner draws in April vs. $0 in prior months — the single largest cash outflow of the month alongside loan repayments.

Cash Is Thin $15,841 in the bank for a business doing $640K/month. AR collection and inventory conversion are what refill the account.

Key Accounts Snapshot

Cash in Bank

$15,841

⚠ Thin — LOC dependency

Accounts Receivable

$261,716

DSO 12.3 days · $40K is 91+ days

Accounts Payable

$65,993

DPO 3.9 days — paying vendors fast

Univest LOC

$540,946

↑ $319K draw in April

L/P Wendell & Twilene

$140,000

Paying down aggressively ($70K/mo)

Univest Loan 5866

$127,342

Regular amortization schedule

Financial Health Ratios

Current Ratio

3.95

✓ Healthy

Assets cover liabilities nearly 4× — but almost all assets are inventory, not cash.

Quick Ratio

0.34

⚠ Concern

Only $0.34 in liquid assets (cash + AR) for every $1 of current debt. Inventory must move.

Debt Service Coverage

1.25

→ Watch

Just enough operating income to cover loan payments. No cushion at this level.

Days Sales Outstanding

12.3

✓ Healthy

Customers are paying quickly — except Philip Miller (CA), $37,800 past 91 days.

⚑ Bookkeeping Item — Customer Prepayments (Account 2300)

The Customer Prepayments liability account is carrying a negative balance of -$16,200. A liability account should never be negative. Tim is reviewing this and will address it directly with Wendell.

Unresolved Amount

-$16,700

A "prepayment discount" was applied to one customer's account — but we never saw the $16,700 come in as an actual deposit. This entry needs to be reviewed and likely reversed.

Legitimate Prepayment

+$500

One verified customer prepayment of $500 is correctly recorded. Net account balance: -$16,200.

⏱ Before Next Month

The Event

~$41K owed to Central Maine Auction Center comes due within 30 days. Add the likely $70K L/P payment to Wendell (matching April's pace) and total near-term cash obligations are approximately $111,000 — against $15,841 in the bank today.

Estimated Impact

~$111,000 in outflows · $15,841 available today

One Action Item

📞 Confirm payment timing with Jerry Miller ($44,100 due) and Woodway Country Club ($63,100 due) — both in the 1–30 day AR bucket. Get both committed by May 25. That single step covers the May obligations.

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This report was prepared by Prosynergy Bookkeeping based on financial data provided by the client. It is intended for informational purposes only and does not constitute financial, tax, or legal advice. All figures are presented on an accrual basis. Please consult a licensed CPA or financial advisor before making decisions based on this information.