Madison Opportunity Fund, Inc.
Madison, Wisconsin
Financial Statements
December 31, 1996
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Independent Auditors' Report
To the Shareholders and Board of Directors
of Madison Opportunity Fund, Inc.
We have audited the accompanying statement of net assets of
Madison Opportunity Fund, Inc., including the schedule of
investments, as of December 31, 1996, the related statements
of operations and changes in net assets for the year then
ended, and the selected per share data and ratios for the
year then ended. These financial statements and per share
data and ratios are the responsibility of the Company's
managment. Our responsibility is to express an opinion on
these financial statements and per share data and ratios
based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about
whether the financial statements and per share data and
ratios are free of material misstatement. An audit includes
examining on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures
included confirmation of securities owned as of December 31,
1996, by correspondence with the custodian. An audit also
includes assessing the accounting principles used and
significant estimates made by management, as well as
evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and selected per
share data and ratios referred to above present fairly, in all material
respects, the financial position of Madison
Opportunity Fund, Inc. as of December 31, 1996, the results
of its operations and the changes in its net assets for the
year then ended, in conformity with generally accepted
accounting principles.
WILLIAMS, YOUNG & ASSOCIATES, LLC
(signature)
Madison, Wisconsin
January 24, 1997
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MADISON OPPORTUNITY FUND, INC.
STATEMENT OF NET ASSETS
Schedule of Investments
December 31, 1996
Market
Common Stocks - 82.0% Shares Value
Basic Industry - 3.8%
Morton International, Inc. 600 $24,450
Consumer Cyclical - 6.5%
Callaway Golf Co. 600 17,250
Clayton Homes, Inc. 938 12,656
Mattel, Inc. 400 11,100
Consumer Services - 9.9%
Banta Corp. 1,000 22,875
LaQuinta Inns 950 18,168
Unitog Co. 800 21,800
Consumer Staples - 4.0%
Lancaster Colony Corp. 550 25,300
Consumer Retail - 8.1%
Intimate Brands, Inc. 1,200 20,550
Officemax, Inc. 1,300 13,975
Pep Boys - Manny Moe & Jack 550 16,913
Financial -Insurance - 6.1%
ALLIED Group 600 19,575
MGIC Investment 250 19,000
Financial Services - 7.6%
Advanta Corp. 500 21,375
United Asset Management 1,000 26,625
Food & Beverage - 3.5%
Dole Food Co. 650 22,019
Medical & Health Care - 11.7%
Rotech Medical 1,200 25,200
St. Jude Medical 500 21,187
Sybron International Corp. 850 28,050
Technology - Hardware - 11.6%
Cabletron Systems, Inc. 700 23,275
EMC Corp/Mass 900 29,813
U.S. Robotics Corp. 300 21,600
Technology - Semiconductors/Electronics - 3.8%
Arrow Electronics, Inc. 450 24,075
Technology - Software - 5.4%
Active Voice Corp. 1,425 19,594
Fiserv, Inc. 400 14,700
Total Common Stocks (cost $478,751) $ 521,125
See Accompanying Notes to Financial Statements
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MADISON OPPORTUNITY FUND, INC.
STATEMENT OF NET ASSETS (continued)
Principal Market
Amount Value
Short Term Investments - 18.3%
Variable Rate Demand Notes
American Family Financial Services
5.21% due 1/1/97 $25,000 $25,000
General Mills, Inc. 5.20% due 1/1/97 25,000 25,000
Johnson Controls, Inc. 5.23% due 1/1/97 25,000 25,000
Pitney Bowes Credit Corp. 5.21% due 1/1/9725,000 25,000
Southwestern Bell Telephone 5.19%
due 1/1/97 15,952 15,952
Total Short Term Investments (cost $115,952) $115,952
Cash & Receivables Less Liabilities - (-.3%) $ (1,859)
TOTAL NET ASSETS - Equivalent to $21.77 per share on
29,175.874 shares of $.01 par value capital stock
outstanding (authorized capital stock - 500,000 shares), and
paid in capital aggregated $591,858. $ 635,218
See Accompanying Notes to Financial Statements
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MADISON OPPORTUNITY FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
Year Ended
December 31, 1996
Investment Activities
Net Investment Income $ 6,562
Income Distributions to Shareholders
($.2125 per share) (5,866)
Increase in Undistributed Net Investment
Income $ 696
Net Realized Gains from Security
Transactions $ 28,361
Net Realized Gain Distributions
to Shareholders ($1.0275 per share) (28,362)
(Decrease) in Undistributed Realized
Gains $ (1)
Increase in Unrealized Appreciation $ 42,374
Increase in Undistributed Net Assets
Derived From Investment Activities $ 43,069
Shares Sold and Redeemed
Net Proceeds from Shares Issued
(7,604 shares) $157,921
Net Asset Value of Shares Issued
in Distributions (1,572 shares) 34,228
$ 192,149
Cost of Shares Redeemed 0
Increase in Net Assets from Sale of
Fund Shares $ 192,149
Net Assets
Balance at Beginning of Year $ 400,000
Net Increase from Investment Activities 43,069
Net Increase from Shares Sold and Redeemed 192,149
Balance at End of Year (Including
undistributed net investment
income of $696) $ 635,218
See Accompanying Notes to Financial Statements.
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MADISON OPPORTUNITY FUND, INC.
STATEMENT OF OPERATIONS
Year Ended
December 31, 1996
Income:
Interest $ 7,954
Dividends 3,031
$10,985
Expenses:
Auditing Fee $ 2,500
Custodial Fee 853
Printing Cost 73
Transfer Agent Fee 969
Other Fees 28
$4,423
Net Investment Income $ 6,562
Ratio of Expenses to Income 40.3%
Realized Gains on Investments:
Proceeds from Sale $233,436
Cost 205,075
Net Realized Gains $ 28,361
Unrealized Appreciation on Investments:
Balance, Beginning of Year $ 0
Balance, End of Year 42,374
Increase in Unrealized
Appreciation $42,374
Net Realized Gains and Increase
in Unrealized Appreciation $70,735
See Accompanying Notes to Financial Statements.
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MADISON OPPORTUNITY FUND, INC.
FINANCIAL HIGHLIGHTS - Selected Per Share Data and Ratios
Year Ended
December 31, 1996
NET ASSET VALUE:
Beginning of year........................ $ 20.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income................... $ 0.24
Net realized and unrealized gains
or (losses) on securities............... $ 2.77
Total from investment operations........ $ 23.01
LESS DISTRIBUTIONS:
Dividends from net income............... $ (0.21)
Capital gains distributions............. $ (1.03)
NET ASSET VALUE:
End of year............................ $ 21.77
TOTAL RETURN: 15.05%
RATIOS:
Operating expenses to average net assets. 0.81%
Net income to average net assets......... 1.20%
Portfolio turnover rate.................... 56.52%
Average commission rate paid............... --
Growth of $10,000
Depicted herein is a graphic representation of the
growth of a $10,000 investment in the Registrant
on December 31, 1995, ending December 31, 1996.
S&P 400 MidCap - $11,923
Lipper Equity MidCap - $11,628
Madison Opportunity Fund, Inc. - $11,505
Value Line - $11,338
Past performance is not a guarantee of future results.
Madison Opportunity Fund
Average Annual Total Return
One year - 15.05%
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MADISON OPPORTUNITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS December 31, 1996
(1) Significant Accounting Principles
Madison Opportunity Fund, Inc. began operations on
December 27, 1995. There were no operations in 1995 and net
assets consisted solely of $400,000 for the purchase of
20,000 shares by investors. The Fund is registered under
the Investment Company Act of 1940, as amended, as an open-
end management company. The following is a summary of
significant accounting principles followed by the Fund in
the preparation of its financial statements. The policies
are in conformity with generally accepted accounting
principles.
(a) The market quotation for each security is the last
reported sale price on a national securities exchange, or,
in the case of Over-The-Counter securities, the latest
available bid price. Other securities for which quotations
are not readily available are valued at fair value as
determined by the Board of Directors. Short-term securities
(maturing within 60 days) are valued on the basis of
amortized cost. Securities with maturities in excess of 60
days are valued at market value.
(b) No provision is made for Federal income taxes
since it is the intention of the Fund to comply with the
provisions of the Internal Revenue Code available to
investment companies, and to make the requisite distribution
to shareholders of taxable income which will be sufficient
to relieve it from all or substantially all Federal income
taxes.
(c) All percentages for the various classifications
relate to total net assets.
(d) The Fund follows industry practice and records
security transactions on the trade date. Dividend income is
recognized on the ex-dividend date and interest income is
accrued on a daily basis.
(2) Investment Advisory Agreement
The investment advisory agreement with Madison Investment
Advisors, Inc., provides for an annual management fee of .75
of 1% on the average net assets of the Fund. Currently such
fees are being waived. Although the investment advisor may
be reimbursed for clerical or administrative expenses
incurred by it, none have been charged to the Fund during
1996. Certain officers and directors of the Fund are also
officers and directors of Madison Investment Advisors, Inc.
(3) Cost of Investments Purchased and Proceeds of
Investments Sold
For the year ended December 31, 1996, the purchases and
sales of investment securities (excluding short-term
securities) were $683,826 and $233,436, respectively,
(purchases and sales of U.S. government obligations only
were $0 and $0, respectively).
(4) Net Realized Gains and Losses on Investments
Net realized gains and losses on investments are computed on
the basis of specifically identified certificates. During
the year ended December 31, 1996, net realized gains would
have been $28,335 if computed on the basis of average cost.
(5) Aggregate Cost of Securities and Undistributed Income
or Capital Gains
The aggregate cost of securities for Federal income tax
purposes is $478,751. The aggregate gross unrealized
appreciation for all securities in which there is an excess
of value over tax cost is $72,731. The aggregate gross
unrealized depreciation for all securities in which there is
an excess of tax cost over value amounts to $30,357. The net
unrealized appreciation at December 31, 1996, for all
securities is $42,374. Through the year ended December 31,
1996, the accumulated undistributed net investment income is
$696, and the accumulated undistributed realized capital
gain is ($1).
