Software Analisis Rasio Dan Bisnis 1

Comparative Balance Sheet - 12 Periods
Year Year Year Year Year Year Year

2006 2007 2008 2009 2010 2011 2012
Total Current Assets $2,006 $2,007 $2,008 $2,009 $2,010 $2,011 $2,012
Total Fixed Assets $2,006 $2,007 $2,008 $2,009 $2,010 $2,011 $2,012
Total Assets $0 $0 $0 $0 $0 $0 $0
Total Current Liabilities $2,006 $2,007 $2,008 $2,009 $2,010 $2,011 $2,012
Total Liabilities $2,006 $2,007 $2,008 $2,009 $2,010 $2,011 $2,012
Total Stockholders' Equity Err:522 $0 $0 $0 $0 $0 $0
Total Liabilities and Equity Err:522 $0 $0 $0 $0 $0 $0
Working Capital $0 $0 $0 $0 $0 $0 $0
© Copyright, 2007, The Vickers Company, All Rights Reserved.

Year
2013
$2,013
$2,013
$0
$2,013
$2,013
$0
$0
$0

Income Statement For posting over 4 periods - Click Here
Year Year Year Year
Sales & Cost of Sales 2006 2007 2008 2009
Click on a choice of 4 through 12 periods for
posting your financials. Revenue $2,010,000 $2,560,000 $2,721,800 $3,285,454
Material Cost $320,000 $427,600 $431,238 $432,513
Direct Labor Costs $300,000 $315,000 $330,450 $346,364
Other Direct Costs $125,000 $128,750 $132,613 $136,591
Total Cost of Revenue $745,000 $871,350 $894,301 $915,467
Gross Profit $1,215,000 $1,628,650 $1,757,500 $2,289,987
Expenses
Fixed Expenses 2006 2007 2008 2009
Executive Salaries $190,000 $191,000 $195,000 $195,000
Advertising $50,000 $51,500 $53,045 $54,636
Auto & Truck Expenses $30,000 $30,900 $31,827 $32,782
Depreciation $5,000 $5,150 $45,305 $50,464
Employee Benefits $3,000 $3,090 $3,183 $3,278
Home Office Business Expenses $1,000 $1,030 $1,061 $1,093
Insurance $3,906 $3,754 $4,010 $3,994
Bank Charges $2,133 $2,197 $2,263 $2,331
Legal & Professional Services $1,000 $1,330 $1,670 $2,020
Meals & Entertainment $4,000 $4,120 $4,244 $4,371
Office Expense $6,000 $6,180 $6,365 $6,556
Retirement Plans $1,000 $1,030 $1,061 $1,093
Rent - Equipment $3,000 $3,090 $3,183 $3,278
Rent - Office & Business Property $8,750 $9,110 $9,544 $9,929
Repairs $1,000 $1,030 $1,061 $1,093
Supplies $1,000 $1,030 $1,061 $1,093
Taxes - Business & Payroll $1,000 $1,030 $1,061 $1,093
Travel $6,230 $6,120 $6,010 $5,900
Utilities $11,974 $12,374 $14,186 $16,974
Other Expenses $0 $0 $0 $0
Total Fixed Expenses $329,993 $335,065 $385,138 $396,977
Variable Expenses 2006 2007 2008 2009

Office salaries $90,000 $102,700 $112,368 $118,647
Employee benefits $43,000 $46,875 $47,970 $51,249
Payroll taxes $18,000 $18,540 $19,096 $19,669
Sales and Marketing $14,000 $14,420 $14,853 $15,298
Telephone and telegraph $6,000 $6,180 $6,365 $6,556
Stationary and office supplies $2,110 $2,680 $3,005 $3,493
Bad debts $100 $103 $106 $109
Postage $5,557 $5,724 $5,895 $6,072
Contributions $0 $0 $0 $0
Add Item $0 $0 $0 $0
Add Item $0 $0 $0 $0
Add Item $0 $0 $0 $0
Add Item $0 $0 $0 $0
Add Item $0 $0 $0 $0
Miscellaneous $0 $0 $0 $0
Total Variable Expenses $178,767 $197,222 $209,659 $221,095
2006 2007 2008 2009

Operating expenses $508,760 $532,287 $594,797 $618,071
Interest $16,250 $16,738 $17,240 $17,757
Depreciation $32,500 $33,475 $34,479 $35,514
Amortization $1,250 $1,288 $1,326 $1,366
Other $0 $0 $0 $0
Total expenses $558,760 $583,787 $647,842 $672,707
Operating income $656,240 $1,044,863 $1,109,658 $1,617,279
Other income and expenses 2006 2007 2008 2009

Gain (loss) on sale of assets $10,000 $10,300 $10,609 $10,927
Other (net) $20,000 $20,600 $21,218 $31,855
Subtotal $30,000 $30,900 $31,827 $42,782
Income before tax $686,240 $1,075,763 $1,141,485 $1,660,061
Income taxes $205,872 $322,729 $342,445 $498,018
Net income $480,368 $753,034 $799,039 $1,162,043
Return On Ownership $670,368 $944,034 $994,039 $1,357,043

Balance Sheet
ASSETS Year Year Year Year
Current Assets 2006 2007 2008 2009
Cash and cash equivalents $451,000 $464,530 $478,466 $492,820
Accounts receivable $350,000 $460,500 $871,315 $1,382,454
Notes receivable $1,200 $3,200 $3,000 $3,400
Inventory $400,000 $612,000 $824,360 $937,091
Other current assets $10,000 $10,300 $10,609 $10,927
Total Current Assets $1,212,200 $1,550,530 $2,187,750 $2,826,692
Fixed Assets 2006 2007 2008 2009

Land $1,000,000 $1,030,000 $1,106,090 $1,109,273
Buildings $1,500,000 $1,045,000 $1,591,350 $1,739,091
Equipment $800,000 $824,000 $948,720 $874,182
Subtotal $3,300,000 $2,899,000 $3,646,160 $3,722,545
Less-accumulated depreciation $400,000 $412,000 $424,360 $437,091
Total Fixed Assets $2,900,000 $2,487,000 $3,221,800 $3,285,454
Intangible Assets 2006 2007 2008 2009

Cost $50,000 $51,500 $53,045 $54,636
Less-accumulated amortization $20,000 $20,600 $21,218 $21,855
Total Intangible Assets $30,000 $30,900 $31,827 $32,782
Other assets $25,000 $25,750 $26,523 $27,318

Total Assets $4,167,200 $4,094,180 $5,467,899 $6,172,246
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities 2006 2007 2008 2009

Accounts payable $600,000 $618,000 $636,540 $640,563
Notes payable $100,000 $103,000 $106,090 $109,273
Current portion of long-term debt $100,000 $103,000 $106,090 $109,273
Income taxes $30,000 $30,900 $31,827 $32,782
Accrued expenses $90,000 $92,700 $95,481 $98,345
Other current liabilities $16,000 $16,480 $16,974 $17,484
Total Current Liabilities $936,000 $964,080 $993,002 $1,007,719
Non-Current Liabilities 2006 2007 2008 2009

Long-term debt $601,200 $624,200 $645,630 $668,308
Deferred income $100,000 $103,000 $106,090 $109,273
Deferred income taxes $30,000 $30,900 $31,827 $32,782
Other long-term liabilities $50,000 $51,500 $53,045 $54,636
Total Liabilities $1,717,200 $1,773,680 $1,829,594 $1,872,718
Stockholders' Equity 2006 2007 2008 2009

Capital stock issued $100,000 $100,000 $100,000 $100,000
Number of shares issued 100,000 100,000 100,000 100,000
Additional paid in capital $950,000 $678,500 $1,853,045 $2,469,710
Retained earnings $1,400,000 $1,542,000 $1,685,260 $1,729,818
Total Stockholders' Equity $2,450,000 $2,320,500 $3,638,305 $4,299,528
Total Liabilities and Equity $4,167,200 $4,094,180 $5,467,899 $6,172,246
Amount sheet is out-of-balance $0 $0 $0 $0

CASH FLOW DATA ENTRY SECTION
Operating Data 2006 2007 2008 2009
Days sales in accounts receivable 30 30 30 30
Days materials cost in inventory 30 30 30 30
Days finished goods in inventory 45 45 45 45
Days materials cost in payables 60 60 60 60
Days payroll expense accrued 7 7 7 7
Days operating expense accrued 20 20 20 20
Expense Data
Direct labor $300,000 $315,000 $330,450 $346,364
Other payroll $90,000 $102,700 $112,368 $118,647
Payroll taxes $18,000 $18,540 $19,096 $19,669
Insurance $3,906 $3,754 $4,010 $3,994
Legal/accounting $1,000 $1,330 $1,670 $2,020
Office overhead $43,000 $46,875 $47,970 $51,249
Financing Data (0 on) Depreciation Capital Current Portion LT Portion Rate

Long term debt $100,000 $500,000 10.00%
Short-term debt $50,000 10.00%
Capital stock issued $100,000
Additional paid-in capital $50,000
Accumulated depreciation (as of 2005) $400,000
INCOME STATEMENT
Forecasted Total
2006 2007 2008 2009 4 Periods
Sales
Sales $1,960,000 $2,500,000 $2,651,800 $3,205,454 $10,317,254
Cost of sales $745,000 $871,350 $894,301 $915,467 $3,426,118
Gross profit $1,215,000 $1,628,650 $1,757,500 $2,289,987 $6,891,136
Expenses
Operating expenses $508,760 $532,287 $594,797 $618,071 $2,253,915
Interest $16,250 $16,738 $17,240 $17,757 $67,984
Depreciation $32,500 $33,475 $34,479 $35,514 $135,968
Amortization $1,250 $1,288 $1,326 $1,366 $5,230
Total expenses $0 $0 $0 $0 $0
Operating income $1,215,000 $1,628,650 $1,757,500 $2,289,987 $6,891,136
Other income and expenses

Gain (loss) on sale of assets $10,000 $10,300 $10,609 $10,927 $41,836
Other (net) $20,000 $20,600 $21,218 $31,855 $93,673
Subtotal $30,000 $30,900 $31,827 $42,782 $135,509
Income before tax $686,240 $1,075,763 $1,141,485 $1,660,061 $4,563,549
Income taxes $205,872 $322,729 $342,445 $498,018 $1,369,065
Net income $480,368 $753,034 $799,039 $1,162,043 $3,194,484
Retained earnings-beginning $1,400,000 $1,400,000 $1,542,000 $1,685,260 $1,400,000
Dividends paid $0 $0 $0 $0 $0
Retained earnings-ending $1,880,368 $2,153,034 $2,341,039 $2,847,303 $4,594,484
Detailed Supporting Information
Cost of sales
Direct labor $300,000 $315,000 $330,450 $346,364 $1,291,814
Materials $320,000 $427,600 $431,238 $432,513 $1,611,351
Other costs $125,000 $128,750 $132,613 $136,591 $522,953
Depreciation: Enter the numbers of years.

30 year Buildings $12,500 $12,500 $8,708 $13,261 $46,969
10 year Equipment $20,000 $20,000 $20,600 $23,718 $84,318

Interest: Percentages from Data sheet
10.00% Long-Term $2,500 $2,575 $2,652 $2,732 $10,459
10.00% Short-Term $17,530 $18,180 $18,793 $19,440 $73,943
BALANCE SHEET
Actual Forecast
2005 2006 2007 2008 2009
ASSETS
Current Assets
Cash and cash equivalents $451,000 $451,000 $464,530 $478,466 $492,820
Accounts receivable $350,000 $350,000 $460,500 $871,315 $1,382,454
Notes receivable $0 $1,200 $3,200 $3,000 $3,400
Inventory $400,000 $400,000 $612,000 $824,360 $937,091
Other current assets $10,000 $10,000 $10,300 $10,609 $10,927
Total Current Assets $1,211,000 $1,212,200 $1,550,530 $2,187,750 $2,826,692
Fixed Assets
Land $100,000 $1,000,000 $1,030,000 $1,106,090 $1,109,273
Buildings $1,500,000 $1,500,000 $1,045,000 $1,591,350 $1,739,091
Equipment $800,000 $800,000 $824,000 $948,720 $874,182
Subtotal $2,400,000 $3,300,000 $2,899,000 $3,646,160 $3,722,545
Less-accumulated depreciation $400,000 $400,000 $412,000 $424,360 $437,091
Total Fixed Assets $2,000,000 $2,900,000 $2,487,000 $3,221,800 $3,285,454
Intangible Assets
Cost $50,000 $50,000 $51,500 $53,045 $54,636
Less-accumulated amortization $20,000 $20,000 $20,600 $21,218 $21,855
Total Intangible Assets $30,000 $30,000 $30,900 $31,827 $32,782
Other assets $25,000 $25,000 $25,750 $26,523 $27,318

Total Assets $3,266,000 $4,167,200 $4,094,180 $5,467,899 $6,172,246
Actual Forecast
LIABILITIES AND 2005 2006 2007 2008 2009
STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $590,000 $600,000 $618,000 $636,540 $640,563
Notes payable $100,000 $100,000 $103,000 $106,090 $109,273
Current portion of long-term debt $100,000 $100,000 $103,000 $106,090 $109,273
Income taxes $30,000 $30,000 $30,900 $31,827 $32,782
Accrued expenses $90,000 $90,000 $92,700 $95,481 $98,345
Other current liabilities $16,000 $16,000 $16,480 $16,974 $17,484
Total Current Liabilities $926,000 $936,000 $964,080 $993,002 $1,007,719
Non-Current Liabilities
Long-term debt $600,000 $601,200 $624,200 $645,630 $668,308
Deferred income $100,000 $100,000 $103,000 $106,090 $109,273
Deferred income taxes $30,000 $30,000 $30,900 $31,827 $32,782
Other long-term liabilities $50,000 $50,000 $51,500 $53,045 $54,636
Total Liabilities $1,706,000 $1,717,200 $1,773,680 $1,829,594 $1,872,718
Stockholders' Equity
Capital stock issued $100,000 $100,000 $100,000 $100,000 $100,000
Additional paid in capital $50,000 $950,000 $678,500 $1,853,045 $2,469,710
Retained earnings $1,400,000 $1,400,000 $1,542,000 $1,685,260 $1,729,818
Other $10,000 $0 $0 $0 $0
$1,560,000 $2,450,000 $2,320,500 $3,638,305 $4,299,528
Total Liabilities and Equity $3,266,000 $4,167,200 $4,094,180 $5,467,899 $6,172,246
"C" Corporation (Y/N) Y

Cash balance positive or (negative) Positive Positive Positive Positive Positive
Amount sheet is out-of-balance $0 $0 $0 $0 $0

Break-Even Charts:
These charts are instantly updated as data is
entered in each column.
Column Headings:
Depending upon your choice these headings
can Month, Quarter, or Year.

###

RY SECTION

For 35 years the authors of The Medical Director™ have analyzed and advised organizations by regarding them as
businesses. Applying objective business process analysis techniques uncovers and pinpoints strengths and
weaknesses. Increased bottom-line performance is achieved by applying this knowledge. You can now view your
medical organization as a business.
It is natural for a consultant to know where the log jams take place in the "revenues earned" stream and they usually
exist in one or more of 5 locations:
1. Captured Charges: Services that are provided and not captured as charges are one of the
largest sources of lost income for the medical industry.
2. Accurate Coding: The correct CPT code needs to be selected to accurately reflect the
services provided, and the appropriate ICD-9 code(s) assigned to justify the service.
3. Accurate Billing: Captured and correctly coded charges need to be sent to the appropriate payor
(an insurer or patient), along with accurate and correct patient demographic and insurance information.
4. Receivables Management: A system is needed to ensure that payments are received in the correct
amount and when expected.
5. Management, Financial, and Productivity Analysis: Systems are needed to calculate expected
and actual income, provide information on the productivity of the practice, and monitor the performance
of the business process.
Although mentioned last, item 5 is where the skilled consultant starts first. To identify exactly where to target their
efforts, a complete management, productivity, and financial analysis of the medical organization is mandatory. This is
where The Medical Director™ shines in that it "quickly clears the fog so you can see the landscape". You can choose
to post up to 12 financial periods for analysis.
The Medical Director™ is a Comprehensive Management, Financial, and Productivity Analysis System for:
1) Financial and Organizational Consultants
2) Practice Managers,
3) CFOs,
4) Product Manufacturers,
5) Supply Retailers,
6) Supply Wholesalers, and
7) Equipment Service & Repair firms.
© Copyright, 2017

Average Collection Period Break-Even Applied Executive Summary Market Value Explained
BE Adjusted Breakeven Summary Expanded Ratios Master Data Entry
Breakdown of Costs Cash Flow Data Entry Expense Analysis Master Index
Breakeven Analysis (1) Cash Flow Sensitivity Analysis Expense Budget Materials Cost Chart
Breakeven Analysis (10) Cash Flow Sensitivity AR Financial Summary Net Profit Margin
Breakeven Analysis (11) Comp. Balance Sheet Forecast Analysis Optimal Performance
Breakeven Analysis (12) Comp. Income Statement G&A Expenses Chart Ownership Chart
Breakeven Analysis (2) Corporate Headcount Analysis Gross Profit Margin Payroll Analysis
Breakeven Analysis (3) Cover Sheet H-Factor Profit Chart
Breakeven Analysis (4) Current Ratio Industry Analysis Proforma Balance
Breakeven Analysis (5) Current Summary Chart Introduction Proforma Income
Breakeven Analysis (6) Dashboard Inventory Turnover Ratio Quick Ratio
Breakeven Analysis (7) Debt Ratio Labor Expenses Chart Ratios Introduction
Breakeven Analysis (8) Earnings Per Share Logit Analysis Return on Assets
Breakeven Analysis (9) Equity Ratio Market Value Analysis Return on Equity

Return-on-investment analysis Snapshot (8)
Sales Performance Chart Snapshot (9)
Sales Projection Chart Snapshot Summary Chart
Sales vs. Expense Springate
SB Headcount Analysis Stock Valuation
Snapshot Summary Analysis
Snapshot (10) Times Interest Earned Ratio
Snapshot (11) Total Expenses Chart
Snapshot (12) Z-Score Analysis (1)
Snapshot (4) Z-Score Explained
Snapshot (5) Support
Snapshot (6) Copyright
Snapshot (7) License Agreement

Income Statement
Year Year Year Year
Sales & Cost of Sales 2006 2007 2008 2009
Gross Sales $0 $0 $0 $0
Discounts/Allowances $0 $0 $0 $0
Net Sales $0 $0 $0 $0
Direct Material Cost $0 $0 $0 $0
Direct Labor Cost $0 $0 $0 $0
Other Direct Costs $0 $0 $0 $0
Total Cost of Sales $0 $0 $0 $0
Gross Profit $0 $0 $0 $0
Expenses
Fixed Expenses 2006 2007 2008 2009
Executive Salaries $0 $0 $0 $0
Advertising $0 $0 $0 $0
Auto & Truck Expenses $0 $0 $0 $0
Depreciation $0 $0 $0 $0
Employee Benefits $0 $0 $0 $0
Home Office Business Expenses $0 $0 $0 $0
Insurance $0 $0 $0 $0
Bank Charges $0 $0 $0 $0
Legal & Professional Services $0 $0 $0 $0
Meals & Entertainment $0 $0 $0 $0
Office Expense $0 $0 $0 $0
Retirement Plans $0 $0 $0 $0
Rent - Equipment $0 $0 $0 $0
Rent - Office & Business Property $0 $0 $0 $0
Repairs $0 $0 $0 $0
Supplies $0 $0 $0 $0
Taxes - Business & Payroll $0 $0 $0 $0
Travel $0 $0 $0 $0
Utilities $0 $0 $0 $0
Total Fixed Expenses $0 $0 $0 $0

Office salaries $0 $0 $0 $0
Employee benefits $0 $0 $0 $0
Payroll taxes $0 $0 $0 $0

Sales and Marketing $0 $0 $0 $0
Telephone and telegraph $0 $0 $0 $0
Stationary and office supplies $0 $0 $0 $0
Bad debts $0 $0 $0 $0
Postage $0 $0 $0 $0
biaya listrik $0 $0 $0 $0
biaya bunga $0 $0 $0 $0
$0 $0 $0 $0
$0 $0 $0 $0
Add Item $0 $0 $0 $0
Add Item $0 $0 $0 $0
Add Item $0 $0 $0 $0
Miscellaneous
Total Variable Expenses 2006 2007 2008 2009
$0 $0 $0 $0
$0 $0 $0 $0
Operating expenses $0 $0 $0 $0
Interest $0 $0 $0 $0
Amortization $0 $0 $0 $0
Other
Total expenses $0 $0 $0 $0
Operating income 2006 2007 2008 2009

$0 $0 $0 $0
Other income and expenses $0 $0 $0 $0
Gain (loss) on sale of assets $0 $0 $0 $0
Other (net)
Subtotal
$0 $0 $0 $0
Income before tax $0 $0 $0 $0
Income taxes $0 $0 $0 $0
Net income $0 $0 $0 $0
Return On Ownership

Balance Sheet Year Year Year Year
2006 2007 2008 2009
ASSETS $0 $0 $0 $0
Current Assets $0 $0 $0 $0
Cash and cash equivalents $0 $0 $0 $0 0
Accounts receivable $0 $0 $0 $0
Notes receivable $0 $0 $0 $0
Inventory $0 $0 $0 $0
Other current assets
Total Current Assets 2006 2007 2008 2009
$0 $0 $0 $0
Fixed Assets $0 $0 $0 $0
Land $0 $0 $0 $0
Buildings $0 $0 $0 $0
Equipment $0 $0 $0 $0
Subtotal $0 $0 $0 $0
Less-accumulated depreciation
Total Fixed Assets 2006 2007 2008 2009
$0 $0 $0 $0
Intangible Assets $0 $0 $0 $0
Cost $0 $0 $0 $0
Less-accumulated amortization
Total Intangible Assets $0 $0 $0 $0
$0 $0 $0 $0
Other assets
Total Assets
Year Year Year Year

LIABILITIES AND STOCKHOLDERS' EQUITY 2006 2007 2008 2009
$0 $0 $0 $0
Current Liabilities $0 $0 $0 $0
Accounts payable $0 $0 $0 $0
Notes payable $0 $0 $0 $0
Current portion of long-term debt $0 $0 $0 $0
Accrued expenses $0 $0 $0 $0
Other current liabilities
Total Current Liabilities 2006 2007 2008 2009
$0 $0 $0 $0
Non-Current Liabilities $0 $0 $0 $0
Long-term debt $0 $0 $0 $0

Deferred income $0 $0 $0 $0
Deferred income taxes
Other long-term liabilities Err:522 $0 $0 $0
Total Liabilities 2006 2007 2008 2009

$0 $0 $0 $0
Stockholders' Equity $0 $0 $0 $0
Capital stock issued $0 $0 $0 $0
Number of shares issued $0 $0 $0 $0
Additional paid in capital $0 $0 $0 $0
Retained earnings
Total Stockholders' Equity Err:522 $0 $0 $0
Total Liabilities and Equity Err:522 $0 $0 $0
Amount sheet is out-of-balance Err:522 $0 $0 $0

CASH FLOW DATA ENTRY SECTION
Operating Data 2006 2007 2008 2009
Expense Data
Direct labor $0 $0 $0 $0
Other payroll $0 $0 $0 $0
Legal/accounting $0 $0 $0 $0
Office overhead $0 $0 $0 $0
Long term debt $0 $0 0.00%
Short-term debt $0 0.00%
Capital stock issued $0
Additional paid-in capital $0
Accumulated depreciation (as of 2005) $0
INCOME STATEMENT
Forecasted
2006 2007 2008 2009 2010
Sales
Sales $0 $0 $0 $0 $0
Cost of sales $0 $0 $0 $0 $0
Gross profit $0 $0 $0 $0 $0
Expenses
Operating expenses $0 $0 $0 $0 $0
Interest $0 $0 $0 $0 $0

Depreciation $0 $0 $0 $0 $0
Amortization $0 $0 $0 $0 $0
Total expenses $0 $0 $0 $0 $0
Operating income $0 $0 $0 $0 $0

Gain (loss) on sale of assets $0 $0 $0 $0 $0
Other (net) $0 $0 $0 $0 $0
Subtotal $0 $0 $0 $0 $0
Income before tax $0 $0 $0 $0 $0
Income taxes $0 $0 $0 $0 $0
Net income $0 $0 $0 $0 $0
Retained earnings-beginning $0 $0 $0 $0 $0
Dividends paid $0 $0 $0 $0 $0
Retained earnings-ending $0 $0 $0 $0 $0
Detailed Supporting Information
Cost of sales
Direct labor $0 $0 $0 $0 $0
Materials $0 $0 $0 $0 $0
Other costs $0 $0 $0 $0 $0
Depreciation: Enter the numbers of years.

30 year Buildings $0 $0 $0 $0 $0
10 year Equipment $0 $0 $0 $0 $0

Interest: Percentages from Data sheet
0.00% Long-Term $0 $0 $0 $0 $0
0.00% Short-Term $0 $0 $0 $0 $0
BALANCE SHEET
Actual Forecast
0 2006 2007 2008 2009
ASSETS
Current Assets
Cash and cash equivalents $0 $0 $0 $0 $0
Accounts receivable $0 $0 $0 $0 $0
Inventory $0 $0 $0 $0 $0
Other current assets $0 $0 $0 $0 $0
Total Current Assets $0 $0 $0 $0 $0
$0 $0 $0 $0 $0
Fixed Assets
Land
Buildings $0 $0 $0 $0 $0
Equipment $0 $0 $0 $0 $0
Subtotal $0 $0 $0 $0 $0
Less-accumulated depreciation $0 $0 $0 $0 $0
Total Fixed Assets $0 $0 $0 $0 $0
$0 $0 $0 $0 $0
Intangible Assets
Cost
Less-accumulated amortization $0 $0 $0 $0 $0
Total Intangible Assets $0 $0 $0 $0 $0
$0 $0 $0 $0 $0
Other assets
Total Assets $0 $0 $0 $0 $0
$0 $0 $0 $0 $0
LIABILITIES AND Actual Forecast

OWNERS' EQUITY 0 2006 2007 2008 2009
Current Liabilities
Accounts payable
Notes payable $0 $0 $0 $0 $0
Current portion of long-term debt $0 $0 $0 $0 $0

Income taxes $0 $0 $0 $0 $0
Accrued expenses $0 $0 $0 $0 $0
Other current liabilities $0 $0 $0 $0 $0
Total Current Liabilities $0 $0 $0 $0 $0
$0 $0 $0 $0 $0
Long-term debt
Deferred income $0 $0 $0 $0 $0
Deferred income taxes $0 $0 $0 $0 $0
Other long-term liabilities $0 $0 $0 $0 $0
$0 Err:522 $0 $0 $0
Total Liabilities
$0 $0 $0 $0 $0
Owners' Equity
Capital stock issued
Additional capital invested $0 $0 $0 $0 $0
Undistributed earnings $0 $0 $0 $0 $0
Other $0 $0 $0 $0 $0
$0 $0 $0 $0 $0
$0 $0 $0 $0 $0
Total Liabilities and Equity
$0 $0 $0 $0 $0
"C" Corporation (Y/N)
Cash balance positive or (negative) Y
Amount sheet is out-of-balance Positive Positive Positive Positive Positive
$0 $0 $0 $0 $0

CASH FLOW DATA ENTRY
Year of Projection 2000
Corporation Type (C or S)? C 'C' Corporation format selected; income taxes WILL be computed
Operating Data 2006 2007 2008 2009
Expense Data
Direct labor as % of sales 16.00% of sales $313,600 $400,000 $424,288 $512,873
Other payroll as % of sales 12.00% of sales $235,200 $300,000 $318,216 $384,654
Payroll taxes as % of payroll 10.00% of payroll $54,880 $70,000 $74,250 $89,753
Insurance as % of payroll 5.00% of payroll $27,440 $35,000 $37,125 $44,876
Legal/accounting as % of sales 2.00% of sales $39,200 $50,000 $53,036 $64,109
Office overhead as % of sales 3.00% of sales $58,800 $75,000 $79,554 $96,164

Long term debt $100,000 $500,000 10.00%
Short-term debt $50,000 10.00%
Capital stock issued $100,000
Additional paid-in capital $50,000
Accumulated depreciation (as of 1999) $400,000

CASH FLOW
Year Year Year Year

2006 2007 2008 2009
Cash from operations 1 2 3 3
Net earnings (loss) $484,491 $678,854 $775,686 $1,283,462
Add-depreciation and amortization $33,750 $35,208 $35,208 $35,208
Net cash from operations $518,241 $714,062 $810,894 $1,318,670
Cash provided (used) by

operating activities
Accounts Receivable ($294,384) ($177,534) ($49,907) ($182,023)
Inventory ($227,255) ($42,608) ($11,978) ($105,329)
Other current assets ($50,000) $14,910 ($31,230) $26,320
Other non-current assets ($8,000) ($87,000) $115,000 ($18,000)
Accounts payable ($271,233) $0 $0 $0
Income taxes $150,639 $83,299 $41,499 $217,618
Accrued expenses ($8,378) $22,488 $6,321 $23,056
Other current liabilities ($4,000) $0 $0 $0
Distributions to shareholders $0 $0 $0 ($50,000)
Net cash from operations ($712,611) ($186,445) $69,705 ($88,358)
Investment transactions
Increases (decreases)
Land $12,500 $12,500 $12,500 $12,500
Buildings and improvements ($50,000) $0 $0 $0
Equipment $75,000 $0 $0 $0
Intangible assets $0 $0 $0 $0
$0 $0 $0 $0
Net cash from investments $37,500 $12,500 $12,500 $12,500
Financing transactions
Short term notes payable ($50,000) $0 $0 $0
Long term debt ($100,000) $0 $0 $0
Deferred income ($10,000) $0 $0 $0
Deferred income taxes ($3,000) $0 $0 $0
Other long-term liabilities $40,000 ($50,000) $0 $0

Capital invested $0 $0 $0 $0
Net cash from financing ($123,000) ($50,000) $0 $0
Net increase (decrease) in cash ($354,870) $465,117 $868,099 $1,217,812
Cash at beginning of period $451,000 $96,130 $561,247 $1,429,346
Cash at the end of period $96,130 $561,247 $1,429,346 $2,647,158

CASH FLOW
Year Year Year Year

2006 2007 2008 2009
Cash from operations 1 2 3 3
Net earnings (loss) $0 $0 $0 $0
Add-depreciation and amortization $0 $0 $0 $0
Net cash from operations $0 $0 $0 $0

Accounts Receivable $0 $0 $0 $0
Other current assets $0 $0 $0 $0
Other non-current assets $0 $0 $0 $0
Other current liabilities $0 $0 $0 $0
Distributions to shareholders $0 $0 $0 $0
Net cash from operations $0 $0 $0 $0
Land $0 $0 $0 $0
Buildings and improvements $0 $0 $0 $0
Intangible assets $0 $0 $0 $0
Net cash from investments $0 $0 $0 $0
Short term notes payable $0 $0 $0 $0
Long term debt $0 $0 $0 $0
Deferred income taxes $0 $0 $0 $0
Other long-term liabilities $0 $0 $0 $0

Capital invested $0 $0 $0 $0
Net cash from financing $0 $0 $0 $0
Net increase (decrease) in cash $0 $0 $0 $0
Cash at beginning of period $0 $0 $0 $0
Cash at the end of period $0 $0 $0 $0

CASH FLOW STATEMENT
Forecasted Total
2006 2007 2008 2009 4 Quarters
Cash from operations
Net earnings (loss) $484,491 $678,854 $775,686 $1,283,462 $3,222,493
Add-depreciation and amortization $33,750 $35,208 $35,208 $35,208 $139,374
Net cash from operations $518,241 $714,062 $810,894 $1,318,670 $3,361,867

Accounts Receivable ($294,384) ($177,534) ($49,907) ($182,023) ($703,848)
Inventory ($227,255) ($42,608) ($11,978) ($105,329) ($387,170)
Other current assets ($50,000) $14,910 ($31,230) $26,320 ($40,000)
Other non-current assets ($8,000) ($87,000) $115,000 ($18,000) $2,000
Accounts payable ($271,233) $0 $0 $0 ($271,233)
Current portion of long-term debt $0 $0 $0 $0 $0
Income taxes $150,639 $83,299 $41,499 $217,618 $493,055
Accrued expenses ($8,378) $22,488 $6,321 $23,056 $43,487
Other current liabilities ($4,000) $0 $0 $0 ($4,000)
Dividends paid $0 $0 $0 ($50,000) ($50,000)
Net cash from operations ($712,611) ($186,445) $69,705 ($88,358) ($917,709)
Land $12,500 $12,500 $12,500 $12,500 $50,000
Buildings and improvements ($50,000) $0 $0 $0 ($50,000)
Equipment $75,000 $0 $0 $0 $75,000
Intangible assets $0 $0 $0 $0 $0
Net cash from investments $37,500 $12,500 $12,500 $12,500 $75,000
Short term notes payable ($50,000) $0 $0 $0 ($50,000)
Long term debt ($100,000) $0 $0 $0 ($100,000)
Deferred income ($10,000) $0 $0 $0 ($10,000)
Deferred income taxes ($3,000) $0 $0 $0 ($3,000)
Other long-term liabilities $40,000 ($50,000) $0 $0 ($10,000)
Capital stock and paid in capital $0 $0 $0 $0 $0

Net cash from financing ($123,000) ($50,000) $0 $0 ($173,000)
Net increase (decrease) in cash ($354,870) $465,117 $868,099 $1,217,812 $2,196,158
Cash at beginning of period $451,000 $96,130 $561,247 $1,429,346 $451,000
Cash at the end of period $96,130 $561,247 $1,429,346 $2,647,158 $2,647,158

CASH FLOW PROJECTIONS - 8 Periods
Current Forecasted-Linear Regression Analysis

2006 2007 2008 2009 5th Qtr 6th Qtr 7th Qtr 8th Qtr
Cash from operations 1 2 3 4 5 6 7 8
Net earnings (loss) $484,491 $678,854 $775,686 $1,283,462 $1,429,060 $1,678,434 $1,927,809 $2,177,183
Add-depreciation and amortization $33,750 $35,208 $35,208 $35,208 $35,937 $36,374 $36,812 $37,249
Net cash from operations $518,241 $714,062 $810,894 $1,318,670 $1,464,997 $1,714,808 $1,964,620 $2,214,432

Accounts Receivable ($294,384) ($177,534) ($49,907) ($182,023) ($59,785) ($13,314) $33,158 $79,629
Inventory ($227,255) ($42,608) ($11,978) ($105,329) $2,310 $41,950 $81,591 $121,232
Other current assets ($50,000) $14,910 ($31,230) $26,320 $35,705 $53,987 $72,269 $90,551
Other non-current assets ($8,000) ($87,000) $115,000 ($18,000) $43,500 $60,700 $77,900 $95,100
Accounts payable ($271,233) $0 $0 $0 $135,617 $216,986 $298,356 $379,726
Current portion of long-term debt $0 $0 $0 $0 $0 $0 $0 $0
Income taxes $150,639 $83,299 $41,499 $217,618 $163,048 $178,962 $194,875 $210,789
Accrued expenses ($8,378) $22,488 $6,321 $23,056 $30,406 $38,219 $46,033 $53,846
Other current liabilities ($4,000) $0 $0 $0 $2,000 $3,200 $4,400 $5,600
Dividends paid $0 $0 $0 ($50,000) ($50,000) ($65,000) ($80,000) ($95,000)
Net cash from operations ($712,611) ($186,445) $69,705 ($88,358) $302,800 $515,691 $728,582 $941,473
Land $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500
Buildings and improvements ($50,000) $0 $0 $0 $25,000 $40,000 $55,000 $70,000
Equipment $75,000 $0 $0 $0 ($37,500) ($60,000) ($82,500) ($105,000)
Intangible assets $0 $0 $0 $0 $0 $0 $0 $0
Net cash from investments $37,500 $12,500 $12,500 $12,500 $0 ($7,500) ($15,000) ($22,500)
Short term notes payable ($50,000) $0 $0 $0 $25,000 $40,000 $55,000 $70,000
Long term debt ($100,000) $0 $0 $0 $50,000 $80,000 $110,000 $140,000
Deferred income ($10,000) $0 $0 $0 $5,000 $8,000 $11,000 $14,000
Deferred income taxes ($3,000) $0 $0 $0 $1,500 $2,400 $3,300 $4,200
Other long-term liabilities $40,000 ($50,000) $0 $0 ($20,000) ($27,000) ($34,000) ($41,000)

Capital stock and paid in capital $0 $0 $0 $0 $0 $0 $0 $0
Net cash from financing ($123,000) ($50,000) $0 $0 $61,500 $103,400 $145,300 $187,200
Net increase (decrease) in cash ($354,870) $465,117 $868,099 $1,217,812 $1,829,297 $2,341,399 $2,853,502 $3,365,605
Cash at beginning of period $451,000 $96,130 $561,247 $1,429,346 $1,484,470 $1,824,485 $2,164,501 $2,504,516
Cash at the end of period $96,130 $561,247 $1,429,346 $2,647,158 $3,313,766 $4,165,884 $5,018,003 $5,870,121

Dashboard
For
INDOPOWER
December 11, 2019
Current Financial Performance

$2,500
$2,000
Revenue
Cost of Sales
$1,500 Gross Profit
Total Expenses
$1,000 Profit
Ownership
$500
$0
Sales Performance Labor Expenses

$1 $1
$1 $1
$1 $1
$1 $1
$1 $1
$1 $1
$0 $0
$0 $0
$0 $0
$0 $0
$0 $0
2006 2007 2008 2009 2006 2007 2008 2009
Dashboard
For
Sales Performance Labor Expenses
INDOPOWER
$1 December 11, 2019 $1
$1 $1
$1 $1
$1 $1
$1 $1
$1 $1
$0 $0
$0 $0
$0 $0
$0 $0
$0 $0
2006 2007 2008 2009 2006 2007 2008 2009
Materials Cost General & Administrative Expenses

2009
$1
$1 2008.5
$1 2008
$1 2007.5
$1 2007
$1 2006.5
$0
2006
$0
2005.5
$0
2005
$0
$0 2004.5
2006 2007 2008 2009 2006 2007 2008 2009
Total Expenses Profit

$1 2009
$1 2008.5
$1 2008
$1 2007.5
Dashboard
For
INDOPOWER
December 11, 2019
Total Expenses Profit

$1 2009
$1 2008.5
$1 2008
$1 2007.5
$1
2007
$1
2006.5
$0
$0 2006
$0 2005.5
$0 2005
$0 2004.5
2006 2007 2008 2009 2006 2007 2008 2009

Dashboard
For
INDOPOWER
December 11, 2019
Return On Ownership Sales Performance Projection Chart
10 $1
9 $1
$1
8
$1
7
$1
6
$1
5 $0
4 $0
3 $0
2 $0
1 $0
0 0 6 0 7 08 09
2006 2007 2008 2009 20 20 20 20
Breakeven Period 1 Breakeven Period 2 Breakeven Period 3

$1 $1 $1
Revenue
Revenue
$1 $1 $1
$1 $1 $1
$1 $1 $1
$1 $1 $1
$1 $1 $1
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
REVENUE FIXED COSTS TOTAL COSTS
REVENUE FIXED COSTS TOTAL COSTS REVENUE FIXED COSTS TOTAL COSTS
$1 $1
Dashboard $1
Revenue
Revenue
$1 $1 $1
$1 $1 $1
$1 $1 For $1
$1 $1
$1
$1 $1
INDOPOWER $1
$0 $0 December 11, 2019 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0

REVENUE FIXED COSTS TOTAL COSTS REVENUE FIXED COSTS TOTAL COSTS

$1 $1 $1
Revenue
Revenue
Revenue
$1 $1 $1
$1 $1 $1
$1 $1 $1
$1 $1 $1
$1 $1 $1
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
REVENUE FIXED COSTS TOTAL COSTS REVENUE FIXED COSTS TOTAL COSTS REVENUE FIXED COSTS TOTAL COSTS

$1 $1 $1
Revenue
Revenue
Revenue
$1 $1 $1
$1 $1 $1
$1 $1 $1
$1 $1 $1
$1 $1 $1
$0 $0 $0
$0 $0 The Vickers Company, All Rights Reserved.
© Copyright, 2009, $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
Breakeven Period 7 Dashboard
Breakeven Period 8 Breakeven Period 9
$1 $1
For $1
INDOPOWER
Revenue
Revenue
Revenue
$1 $1 $1
$1 $1 $1
$1 $1 December 11, 2019 $1
$1 $1 $1
$1 $1 $1
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0

$1 $1 $1
Revenue
Revenue
Revenue
$1 $1 $1
$1 $1 $1
$1 $1 $1
$1 $1 $1
$1 $1 $1
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
1200.00%
Breakeven Analysis Percentage - Summary
1000.00%
800.00%
600.00%
Dashboard
For
Breakeven Analysis Percentage - Summary
1200.00% INDOPOWER
December 11, 2019
1000.00%
800.00%
600.00%
400.00%
200.00%
0.00%
1 2 3 4
Z-Score Analysis - Publicly Held
12.00
10.00
8.00
6.00
4.00
2.00

0.00
12.00
10.00
8.00 Dashboard
6.00 For
INDOPOWER
4.00 December 11, 2019
2.00
0.00
Z-Score Analysis - Privately Held
12.00
10.00
8.00
6.00
4.00
2.00
0.00
Z-Score Analysis - Nonmanufacturing
12.00
10.00
8.00
Dashboard
For
INDOPOWER
December 11, 2019
12.00
10.00
8.00
6.00
4.00
2.00
0.00
Executive Summary
Current vs. Projected
$2,500
$2,000
1. Net Revenue
$1,500 2. Cost of Revenue
3. Gross Profit
4. Total Operating Expens es
$1,000
5. Operating Profit
6. Return on Owners hip
$500

$0
Executive Summary
$2,500
$2,000 Dashboard 1. Net Revenue

$1,500
For 2. Cost of Revenue
INDOPOWER 3. Gross Profit
December 11, 2019 4. Total Operating Expens es

$1,000
5. Operating Profit
6. Return on Owners hip
$500
$0

Dashboard
For
INDOPOWER
December 11, 2019
1.20 1.20
1.00 1.00
0.80 0.80
0.60 0.60
0.40 0.40
0.20 0.20
0.00 0.00
2006 2007 2008 2009 2006 2007 2008 2009
Current Ratio Acid Test (Quick Ratio)
12.00 12.00
10.00 10.00
8.00 8.00
6.00 6.00
4.00 4.00
2.00 2.00
0.00 0.00
2006 2007 2008 2009 2006 2007 2008 2009
Receivables Turnover Days Sales in AR
12.00 12.00
10.00 10.00
8.00 8.00
6.00 6.00
4.00 4.00
2.00 2.00
Dashboard
For
INDOPOWER
December 11, 2019
12.00 12.00
10.00 10.00
8.00 8.00
6.00 6.00
4.00 4.00
2.00 2.00
0.00 0.00
2006 2007 2008 2009 2006 2007 2008 2009
Inventory Turnover Days Inventory
1200.00% 1200.00%
1000.00% 1000.00%
800.00% 800.00%
600.00% 600.00%
400.00% 400.00%
200.00% 200.00%
0.00% 0.00%
2006 2007 2008 2009 2006 2007 2008 2009
Gross Profit Percentage Net Profit Margin
100.00% 1200.00%
90.00%
80.00% 1000.00%
70.00% 800.00%
60.00%
50.00% 600.00%
40.00% © Copyright, 2009, The Vickers Company, All Rights Reserved.
30.00% 400.00%
20.00% 200.00%
10.00%
0.00% 0.00%
Dashboard
For
100.00%
INDOPOWER1200.00%
90.00% December 11, 2019
80.00% 1000.00%
70.00% 800.00%
60.00%
50.00% 600.00%
40.00%
30.00% 400.00%
20.00% 200.00%
10.00%
0.00% 0.00%
2006 2007 2008 2009 2006 2007 2008 2009
Return on Net Worth Return on Total As sets

For
INDOPOWER
December 11, 2019
Labor Expenses
$1
$1
$1
$1
$1
$1
$0
$0
$0
$0
$0
2006 2007 2008 2009
For
Labor Expenses
INDOPOWER
December 11, 2019 $1
$1
$1
$1
$1
$1
$0
$0
$0
$0
$0
2006 2007 2008 2009
General & Administrative Expenses

2009
2008.5
2008
2007.5
2007
2006.5
2006
2005.5
2005
2004.5
2006 2007 2008 2009
Profit
2009 © Copyright, 2009, The Vickers Company, All Rights Reserved.
2008.5
2008
2007.5
For
INDOPOWER
December 11, 2019
Profit
2009
2008.5
2008
2007.5
2007
2006.5
2006
2005.5
2005
2004.5
2006 2007 2008 2009

For
INDOPOWER
December 11, 2019
Sales Performance Projection Chart

$1
$1
$1
$1
$1
$1
$0
$0
$0
$0
$0
0 6 0 7 08 09
20 20 20 20
Breakeven Period 3
$1
Revenue
$1
$1
$1
$1
$1
$0
$0
$0
$0
$0

Breakeven Period 3
$1
Revenue
$1
$1
For $1
$1
INDOPOWER $1
$0
$0
$0
$0
Breakeven Period 6
$1
Revenue
$1
$1
$1
$1
$1
$0
$0
$0
$0
$0
Breakeven Period 9
$1
Revenue
$1
$1
$1
$1
$1
$0
$0 © Copyright, 2009, The Vickers Company, All Rights Reserved.
$0
$0
$0
Breakeven Period 9
For $1
INDOPOWER
Revenue
$1
$1
$1
$1
$0
$0
$0
$0
$0
Breakeven Period 12
$1
Revenue
$1
$1
$1
$1
$1
$0
$0
$0
$0
$0
Analysis Percentage - Summary

For
Analysis Percentage - Summary
INDOPOWER
December 11, 2019
3 4
e Analysis - Publicly Held

e Analysis - Publicly Held
For
INDOPOWER
December 11, 2019
e Analysis - Privately Held
e Analysis - Nonmanufacturing

For
e Analysis - Nonmanufacturing
INDOPOWER
December 11, 2019

For
INDOPOWER
December 11, 2019

For
INDOPOWER
December 11, 2019

For
INDOPOWER
December 11, 2019

For
INDOPOWER
December 11, 2019

Comprehensive Business Analysis
For
INDOPOWER
6200 XYZ Drive
ABC, California 00000-0000
$2,500
$2,000
Revenue
Cost of Sales
$1,500
Gros s Profit
Total Expenses
Profit
$1,000
Ownership
$500
$0

Profit
$1,000
Ownership
$500
$0
PT INDONESIA POWER

The Executive Summary
For
INDOPOWER
December 11, 2019
The Executive Summary of your business yields an overall picture of its financial health. We have extracted, compiled, and entered into our
analysis system all of the vital information that pertains to this specific business and yielded this summary. The primary objective is to zero in
on all of the areas that might be detracting from the bottom line.
Knowledge is power, and knowledge of your company's value is the ultimate power tool. Item 9 is the summary results of your Market Value
Analysis. The Market Value Analysis uses the 6 standard methods endorsed by The American Society of Appraisers.
Your Your
Current Forecasted
Year Year
Category 2006 2017 Comments
1. Net Revenue $0 $0 The trend in this category is positive. ###

2. Cost of Revenue $0 $0 The trend in this category is positive. ###
3. Gross Profit $0 $0 The trend in this category is positive. ###
4. Total Operating Expenses $0 $0 The trend in this category is positive. ###
5. Operating Profit $2,006 $2,017 The trend in this category is positive. ###
6. Return on Ownership $0 #VALUE! #VALUE! ###
7. Current Ratio 1.00 1.00 The trend in this category is positive. ###
8. Z-Score - Non-manufacturing #DIV/0! #DIV/0! #DIV/0! ###
#DIV/0! #DIV/0!
Business Valuation Summary

Base Price Base Price + Intangible Assets Target Price
9. Average Valuation #DIV/0! #DIV/0! #DIV/0!
Median Valuation #DIV/0! #DIV/0!
###

Overall Rating: #DIV/0! ###
#DIV/0!
NUMBER OF EVALUATION CATEGORIES CONSIDERED= 8
NUMBER OF EVALUATION CATEGORIES THAT MAY NEED ASSISTANCE = #DIV/0!
PERCENTAGE OF EVALUATION CATEGORIES THAT MAY NEED ASSISTANCE = #DIV/0! 0% to 20% is Best
Executive Summary
1. Net Revenue
$2,500
2. Cost of Revenue
$2,000
3. Gross Profit
$1,500
4. Total Operating Expenses
$1,000
5. Operating Profit
$500
6. Return on Ownership
$0
2006 2017
PT INDONESIA POWER

The Summary Analysis
INDOPOWER
Year Year Year Year
FINANCIAL INDICATORS 2006 2007 2008 2009 Comments
Z Score: Non-manufacturing #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

(Higher is Better) If Z is less than 1.11 then the firm is classified as Failed.
Springate Analysis #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

(Higher is Better) If Z is less than 0.862 then the firm is classified as Failed.
Logit Analysis #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

(Lower is Better) If percentage is higher than 50% and trending higher-Not Good!
Fulmer H-Factor Analysis #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

(Higher is Better) If H is less than 0 then the firm is classified as "failed"
Breakeven Dollars #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Income Ratios
Turnover of Total Operating Assets 0% 0% 0% 0% Trend is Upward
Net Sales to Net Worth Err:522 #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Gross Margin on Net Sales #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

INDOPOWER
Year Year Year Year
Operating Income to Net Sales Ratio #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Profitability Ratios
Earnings Per Share (EPS) Ratio #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Net Profit Margin #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Return on Total Assets #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Return on Net Worth 0.00% 0.00% 0.00% 0.00% Trend is Upward
Liquidity Ratios
Acid Test (Quick Ratio) 1.00 1.00 1.00 1.00 Trend is Upward
Current Ratio 1.00 1.00 1.00 1.00 Trend is Upward
Activity Ratios
Average Collection Period Computations

Credit Sales $0 $0 $0 $0
Days Per Year 365 365 365 365
Credit sales per day $0 $0 $0 $0
Average Collection Period - Days #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Average Collection Period Ratio #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Inventory Turnover #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Days Sales in AR N/A N/A N/A N/A Trend is Upward

INDOPOWER
Year Year Year Year
Receivables Turnover #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Days Inventory N/A N/A N/A N/A Trend is Upward
Debt ratio #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

INDOPOWER
Year Year Year Year
Other Key Ratios
Net Sales to Inventory #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Days Purchases in AP N/A N/A N/A N/A Trend is Upward
Working Capital $0 $0 $0 $0 Trend is Upward
Net Sales to Working Capital #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Total Assets to Net Sales #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Net Sales to AR #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Net Sales to Net Fixed Assets 0.00 0.00 0.00 0.00 Trend is Upward
Net Sales to Total Assets #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Amortization and Depreciation Expense to Net Sales N/A N/A N/A N/A Trend is Upward
Gross Profit Percentage N/A N/A N/A N/A Trend is Upward
Operating Expenses as % of Net Sales N/A N/A N/A N/A Trend is Upward
Return on Net Sales N/A N/A N/A N/A Trend is Upward
Income before tax to Net Worth 0.00% 0.00% 0.00% 0.00% Trend is Upward
Income before tax to Total Assets #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Retained Earning to Net Income #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Times Interest Earned N/A N/A N/A N/A Trend is Upward

INDOPOWER
Year Year Year Year
Interest Expense to Net Sales N/A N/A N/A N/A Trend is Upward
Current Liabilities to Net Worth (1.00) (1.00) (1.00) (1.00) Trend is Upward
Current Liabilities to Inventory N/A N/A N/A N/A Trend is Upward
AP to Net Sales #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Total Liabilities to Net Worth (Debt Ratio) -100.00% -100.00% -100.00% -100.00% Trend is Upward
Net Worth to Total Liabilities (1.00) (1.00) (1.00) (1.00) Trend is Upward

INDOPOWER
Year Year Year Year
PAYROLL ANALYSIS
CURRENT NUMBER OF EMPLOYEES 37

CURRENT SALES ANNUALIZED $3,399,968
CURRENT COMPLETED PERIOD SALES $0
CURRENT PAYROLL $350,064
QUARTER/YEAR PAYROLL ONE YEAR AGO $0
SALES VOLUME REQUIRED, AT CURRENT PAYROLL LEVEL, TO PRODUCE PROFITS

EQUAL TO THE PREVIOUS YEAR PROFITS . . . . . . . . . . . . . . . . . . . #DIV/0!
#DIV/0!
#DIV/0! #DIV/0!
GROSS PAYROLL ALLOWABLE

UNDER PROJECTED CONDITIONS . . . . . . . . . . . . . . . . . . . #DIV/0!
#DIV/0! #DIV/0! #DIV/0!

Comments
#DIV/0! #DIV/0! #DIV/0!
CASH FLOW ANALYSIS
Year Year Year Year

Cash from operations 2006 2007 2008 2009 Comments
Net earnings (loss) $0 $0 $0 $0 Trend is Upward

Add-depreciation and amortization $0 $0 $0 $0 Trend is Upward
Net cash from operations $0 $0 $0 $0 Trend is Upward

INDOPOWER
Year Year Year Year
Accounts Receivable $0 $0 $0 $0 Trend is Upward
Inventory $0 $0 $0 $0 Trend is Upward
Other current assets $0 $0 $0 $0 Trend is Upward
Other non-current assets $0 $0 $0 $0 Trend is Upward
Accounts payable $0 $0 $0 $0 Trend is Upward
Current portion of long-term debt $0 $0 $0 $0 Trend is Upward
Income taxes $0 $0 $0 $0 Trend is Upward
Accrued expenses $0 $0 $0 $0 Trend is Upward
Other current liabilities $0 $0 $0 $0 Trend is Upward
Distributions to shareholders $0 $0 $0 $0 Trend is Upward
Net cash used by operations $0 $0 $0 $0 Trend is Upward
Land $0 $0 $0 $0 Trend is Upward
Buildings and improvements $0 $0 $0 $0 Trend is Upward
Equipment $0 $0 $0 $0 Trend is Upward
Intangible assets $0 $0 $0 $0 Trend is Upward
Net cash from investments $0 $0 $0 $0 Trend is Upward
Short term notes payable $0 $0 $0 $0 Trend is Upward
Long term debt $0 $0 $0 $0 Trend is Upward
Deferred income $0 $0 $0 $0 Trend is Upward
Deferred income taxes $0 $0 $0 $0 Trend is Upward
Other long-term liabilities $0 $0 $0 $0 Trend is Upward
Capital invested $0 $0 $0 $0 Trend is Upward
Net cash from financing $0 $0 $0 $0 Trend is Upward

INDOPOWER
Year Year Year Year
Net increase (decrease) in cash $0 $0 $0 $0 Trend is Upward
Cash at beginning of period $0 $0 $0 $0 Trend is Upward
Cash at the end of period $0 $0 $0 $0 Trend is Upward

INDOPOWER
Year Year Year Year
Summary Analysis
The Final Analysis Score is:
#DIV/0!
Flexakon uses "Data Funneling" to arrive at the Final Score. All of the worksheets in Flexakon contribute objective analyses. These results funnel to
the Summary Analysis worksheet where they are further analyzed and assigned individual scores. The total of all scores are common sized at 100%.
The final score reflects the sum of positive scores.
DEMO: Click back and forth on the "Troubled Firm" and "Prosperous Firm" buttons on the Master Data Entry worksheet while simultaneously viewing
Flexakon's summary analysis sheet.

Forecast Analysis - Regression Analysis Based On 4 Periods
Income Statement
Medical Manufacturer
Year Year Year Year

2006 2007 2008 2009
Net Sales $0 $0 $0 $0
Expenses
Fixed Expenses 2006 2007 2008 2009
Repairs $0 $0 $0 $0
Travel $0 $0 $0 $0

Bad debts $0 $0 $0 $0
Postage $0 $0 $0 $0
Add Item $0 $0 $0 $0
Add Item $0 $0 $0 $0
Add Item $0 $0 $0 $0
2006 2007 2008 2009

Other $0 $0 $0 $0
Operating income $2,006 $2,007 $2,008 $2,009

Other (net) $0 $0 $0 $0
2006 2007 2008 2009


Return On Ownership $0 $0 $0 $0

Balance Sheet
Current Assets 2006 2007 2008 2009
Cash and cash equivalents $0 $0 $0 $0
Total Current Assets $2,006 $2,007 $2,008 $2,009
Fixed Assets 2006 2007 2008 2009

Land $0 $0 $0 $0
Less-accumulated depreciation $0 $0 $0 $0
Total Fixed Assets $2,006 $2,007 $2,008 $2,009

Cost $0 $0 $0 $0
Less-accumulated amortization $0 $0 $0 $0
Other assets $0 $0 $0 $0
Total Assets $0 $0 $0 $0

Balance Sheet

Total Current Liabilities $2,006 $2,007 $2,008 $2,009

Sub-total Err:522 $0 $0 $0
Total Liabilities $2,006 $2,007 $2,008 $2,009

Retained earnings $0 $0 $0 $0
Altman Z-Score Analysis 2006 2007 2008 2009

Publicly Held Firm #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Privately Held Firm #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Service, Retail, Wholesale #DIV/0! #DIV/0! #DIV/0! #DIV/0!
PT INDONESIA POWER

INDOPOWER
6200 XYZ Drive
Phone: (000) 000-0000
FAX: (000) 000-0000
E-mail: someone@xyz.com
December 11, 2019
Financial Summary Analysis

*EBIT is Earnings Before Interest and Taxes
**Ownership is the Total Reward for being the owner=Owner Salary + Bonus + Net Income + Other
Year Year Year Year Trend

2006 2007 2008 2009 ASSESSMENT
Income Statement
Net Sales $0 $0 $0 $0 Downward
Cost of Goods Sold $0 $0 $0 $0 Downward
Gross Profit (Margin) $0 $0 $0 $0 Downward
G&A $2,006 $2,007 $2,008 $2,009 Upward
Total Operating Expenses $0 $0 $0 $0 Downward
EBIT* $0 $0 $0 $0 Downward
Net Income After $0 $0 $0 $0 Downward
Ownership** $0 $0 $0 $0 Downward
Balance Sheet
Current Assets $2,006 $2,007 $2,008 $2,009 Upward
Inventory $0 $0 $0 $0 Downward
Other Assets $0 $0 $0 $0 Downward
Total Assets $0 $0 $0 $0 Downward
Current Liabilities $2,006 $2,007 $2,008 $2,009 Upward
Non-current Liabilities Err:522 $0 $0 $0 Err:522
Total Liabilities $2,006 $2,007 $2,008 $2,009 Upward
Equity Err:522 $0 $0 $0 Err:522
Cash Flow
Net Cash Flow $0 $0 $0 $0 Downward
Breakeven
Break-Even #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
B/E % #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
DAY OF B/E #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
DATE OF B/E #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

Key Ratios
Current Ratio 1.00 1.00 1.00 1.00 Downward
Quick Ratio 1.00 1.00 1.00 1.00 Downward
Debt Ratio #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Asset Turnover #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Net Income/Sales #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Debt/Equity Err:522 #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Return on Assets Err:522 #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Working Capital $0 $0 $0 $0 Downward
Sales/Working Capital #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Market Value
Book Market Value ($2,006) ($2,007) ($2,008) ($2,009) Downward
Plus Ownership** ($2,006) ($2,007) ($2,008) ($2,009) Downward
Altman Z-Score Analysis
Publicly Held Firm #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Privately Held Firm #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Non-Manufacturing #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
*EBIT is Earnings Before Interest and Taxes

**Ownership is the Total Reward for being the owner=Owner Salary + Bonus + Net Income + Other

Income Statement Forecast
1 2 3 4
Net Sales Cost of Goods Sold Gross Profit (Margin) G&A

Total Operating Expens es EBIT* Net Income After Ownership**
Balance Sheet Forecast
1 2 3 4
Current Assets Inventory Other Assets Total Assets Current Liabilities
Non-current Liabilities Total Liabilities Equity

INDOPOWER
6200 XYZ Drive
Phone: (000) 000-0000
FAX: (000) 000-0000
December 11, 2019
Comparative Income Statement
Year Year Year Year

2006 2007 2008 2009
Income Details $ % $ % $ % $ %
Gross Sales $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Discounts/Allowances $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Net Sales $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Direct Material Cost $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Direct Labor Cost $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Other Direct Costs $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Total Cost of Sales $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Gross Profit $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Expenses
Fixed Expenses
Executive Salaries $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Advertising $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Auto & Truck Expenses $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Depreciation $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Employee Benefits $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Home Office Business Expenses $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Insurance $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Bank Charges $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!

Year Year Year Year

2006 2007 2008 2009
Legal & Professional Services $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Meals & Entertainment $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Office Expense $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Retirement Plans $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Rent - Equipment $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Rent - Office & Business Property $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Repairs $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Supplies $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Taxes - Business & Payroll $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Travel $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Utilities $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Other Expenses $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Total Fixed Expenses $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!

Year Year Year Year

2006 2007 2008 2009
Variable Expenses
Office salaries $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Employee benefits $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Payroll taxes $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Sales and Marketing $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Telephone and telegraph $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Stationary and office supplies $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Bad debts $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Postage $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Contributions $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
biaya listrik $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
biaya bunga $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Add Item $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Total Variable Expenses $2,006 #DIV/0! $2,007 #DIV/0! $2,008 #DIV/0! $2,009 #DIV/0!
Operating expenses $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!

Interest $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Depreciation $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Amortization $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Other $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Total expenses $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Operating income $2,006 #DIV/0! $2,007 #DIV/0! $2,008 #DIV/0! $2,009 #DIV/0!

Year Year Year Year

2006 2007 2008 2009
Gain (loss) on sale of assets $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Other (net) $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Subtotal $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Income before tax $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Income taxes $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Net income $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Return On Ownership $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
PT INDONESIA POWER

INDOPOWER
6200 XYZ Drive
Phone: (000) 000-0000
FAX: (000) 000-0000
December 11, 2019
Comparative Balance Sheet
Year Year Year Year

2006 2007 2008 2009
ASSETS $ % $ % $ % $ %
Current Assets
Cash and cash equivalents $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Accounts receivable $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Notes receivable $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Inventory $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Other current assets $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Total Current Assets $2,006 #DIV/0! $2,007 #DIV/0! $2,008 #DIV/0! $2,009 #DIV/0!
Fixed Assets
Land $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Buildings $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Equipment $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Subtotal $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Less-accumulated depreciation $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Total Fixed Assets $2,006 #DIV/0! $2,007 #DIV/0! $2,008 #DIV/0! $2,009 #DIV/0!
Intangible Assets
Cost $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Less-accumulated amortization $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Total Intangible Assets $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Other assets $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!

Year Year Year Year

2006 2007 2008 2009
Total All Other Assets $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Total Assets $0 #DIV/0! $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!

Year Year Year Year

2006 2007 2008 2009
Current Liabilities
Accounts payable $0 Err:522 $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Notes payable $0 Err:522 $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Current portion of long-term debt $0 Err:522 $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Income taxes $0 Err:522 $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Accrued expenses $0 Err:522 $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Other current liabilities $0 Err:522 $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Total Current Liabilities $2,006 Err:522 $2,007 #DIV/0! $2,008 #DIV/0! $2,009 #DIV/0!
Long-term debt $0 Err:522 $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Deferred income $0 Err:522 $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Deferred income taxes $0 Err:522 $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Other long-term liabilities Err:522 Err:522 $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Total Liabilities $2,006 Err:522 $2,007 #DIV/0! $2,008 #DIV/0! $2,009 #DIV/0!
Stockholders' Equity
Capital stock issued $0 Err:522 $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Number of shares issued $0 Err:522 $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Additional paid in capital $0 Err:522 $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Retained earnings $0 Err:522 $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Total Stockholders' Equity Err:522 Err:522 $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
Total Liabilities and Equity Err:522 Err:522 $0 #DIV/0! $0 #DIV/0! $0 #DIV/0!
PT INDONESIA POWER

Pro Forma Income Statement
Income Statement
Medical Manufacturer
Year Year Year Year

2006 2007 2008 2009
Net Sales $0 $0 $0 $0
Expenses
Fixed Expenses 2006 2007 2008 2009
Repairs $0 $0 $0 $0
Travel $0 $0 $0 $0

Bad debts $0 $0 $0 $0
Postage $0 $0 $0 $0
Add Item $0 $0 $0 $0
Add Item $0 $0 $0 $0
Add Item $0 $0 $0 $0
2006 2007 2008 2009

Other $0 $0 $0 $0
Operating income $2,006 $2,007 $2,008 $2,009

Other (net) $0 $0 $0 $0
2006 2007 2008 2009


Return On Ownership $0 $0 $0 $0
PT INDONESIA POWER

Pro Forma Balance Sheet

Balance Sheet
Current Assets 2006 2007 2008 2009
Cash and cash equivalents $0 $0 $0 $0
Total Current Assets $2,006 $2,007 $2,008 $2,009
Fixed Assets 2006 2007 2008 2009

Land $0 $0 $0 $0
Less-accumulated depreciation $0 $0 $0 $0
Total Fixed Assets $2,006 $2,007 $2,008 $2,009

Cost $0 $0 $0 $0
Less-accumulated amortization $0 $0 $0 $0
Other assets $0 $0 $0 $0

Balance Sheet

Total Current Liabilities $2,006 $2,007 $2,008 $2,009

Sub-total Err:522 $0 $0 $0

Retained earnings $0 $0 $0 $0
PT INDONESIA POWER

The Prediction of Corporate Failure
Logit Analysis: The Model
Chistine Zavgren
Bankruptcy prediction models are more generally known as measures of financial distress. The best-known,
and most-widely used, multiple discriminant analysis method is the one proposed by Edward Altman,
Professor of Finance at the Stern School of Business, New York University, The Z-Score Analysis or Zeta
Model. Despite the positive results of his study, Altman’s model had a key weakness: it assumed variables
in the sample data to be normally distributed. "If all variables are not normally distributed, the methods
employed may result in selection of an inappropriate set of predictors". Chistine Zavgren developed a
model that corrected for this problem. Her model used logit analysis to predict bankruptcy. Due to its use of
logit analysis, her model is considered "more robust". Further, logit analysis actually provides a probability
(in terms of a percentage) of bankruptcy. Also, the probability calculated might be considered a measure of
the effectiveness of management, i.e. effective management will not lead a company to the verge of
bankruptcy.
Application of the logit model requires four steps. First, a series of seven financial ratios are calculated.
Second, each ratio is multiplied by a coefficient unique to that ratio. This coefficient can be either positive or
negative. Third, the resulting values are summed together (y). Finally, the probability of bankruptcy for a
firm is calculated as the inverse of (1 + ey) where "e" is the base of natural logarithms."Explanatory
variables with a negative coefficient increase the probability of bankruptcy because they reduce ey toward
zero, with the result that the bankruptcy probability function approaches 1/1, or 100 percent. Likewise,
independent variables with a positive coefficient decrease the probability of bankruptcy".
Logit Analysis developed by Christine Zavgren-Bankruptcy Predictor

Zavgren, C. 1983, The Prediction of Corporate Failure: The State of the Art, Journal of Accounting Literature

The Prediction of Corporate Failure
Chistine Zavgren
Year Year Year Year
2006 2007 2008 2009
Cash $0 $0 $0 $0
Marketable Securities $0 $0 $0 $0
Fixed Assets $2,006 $2,007 $2,008 $2,009
Current Liabilities $2,006 $2,007 $2,008 $2,009
Long Term Debt $0 $0 $0 $0
Sales $0 $0 $0 $0
Income from Continuing Operations $2,006 $2,007 $2,008 $2,009
Logit Analysis
Year Year Year Year
2006 2007 2008 2009
Constant 0.23883 0.23883 0.23883 0.23883
Inventories/Sales 0.000 0.000 0.000 0.000
Receivables/Inventory 0.000 0.000 0.000 0.000
Cash+Marketable Securities/Total Assets #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Quick Assets/Current Liabilities 0.000 0.000 0.000 0.000
Income from CO/(Total Assets-Current Liab) -0.486 -0.486 -0.486 -0.486
Long-Term Debt/(Total Assets-Current Liab) 0.000 0.000 0.000 0.000
Sales/(Net Working Capital+Fixed Assets) #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Sum of Coefficients * Ratios #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Probability of Bankruptcy #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Logit Analysis
1200.00%
1000.00%
800.00%
600.00%
400.00%
0.00%
Logit Analysis
1200.00%
1000.00%
800.00% The Prediction of Corporate Failure

600.00%
Chistine Zavgren
400.00%
200.00%
0.00%
1 2 3 4
PT INDONESIA POWER

The Fulmer H-Factor Model
Fulmer, John G. Jr., Moon, James E., Gavin, Thomas A., Erwin, Michael J., "A Bankruptcy Classification
Model For Small Firms". Journal of Commercial Bank Lending (July 1984): pp. 25-37.
Fulmer used step-wise multiple discriminate analysis to evaluate 40 financial ratios applied to a sample of
60 companies -30 failed and 30 successful. The average asset size of these firms was $455,000.
Fulmer reported a 98% accuracy rate in classifying the test companies one year prior to failure and an 81%
accuracy rate more than one year prior to bankruptcy.
The model takes the following form:

H = 5.528 (V1) + 0.212 (V2) + 0.073 (V3) + 1.270 (V4) - 0.120 (V5) + 2.335 (V6) + 0.575 (V7) + 1.083 (V8)
+ 0.894 (V9) - 6.075
Fulmer H-Factor Analysis Year Year Year Year

2006 2007 2008 2009
Retained Earnings/Total Assets V1 #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Sales/Total Assets V2 #DIV/0! #DIV/0! #DIV/0! #DIV/0!
EBIT/Equity V3 Err:522 #DIV/0! #DIV/0! #DIV/0!
Cash Flow/Total Debt V4 0.000000 0.000000 0.000000 0.000000
Total Debt/Total Assets V5 #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Current Liabilities/Total Assets V6 #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Log Tangible Total Assets V7 Err:502 Err:502 Err:502 Err:502
Working Capital/Total Debt V8 0.000000 0.000000 0.000000 0.000000
Log EBIT/Interest V9 #DIV/0! #DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0! #DIV/0!

#DIV/0! #DIV/0! #DIV/0! #DIV/0!
Err:522 #DIV/0! #DIV/0! #DIV/0!
0.00 0.00 0.00 0.00
#DIV/0! #DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0! #DIV/0!
Err:502 Err:502 Err:502 Err:502
0.00 0.00 0.00 0.00
#DIV/0! #DIV/0! #DIV/0! #DIV/0!
Sum #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Less -6.075 -6.075 -6.075 -6.075
H= #DIV/0! #DIV/0! #DIV/0! #DIV/0!

12.00
H-Factor Analysis
10.00
8.00
6.00
4.00
2.00
0.00
2006 2007 2008 2009
If H is less than 0 then the firm is classified as "failed"
PT INDONESIA POWER

Springate Bankruptcy Predictor
Gordon L. V. Springate
This model was developed in 1978 at S.F.U. by Gordon L.V. Springate, following procedures developed by
Altman in the U.S. Springate used step-wise multiple discriminate analysis to select four out of 19 popular
financial ratios that best distinguished between sound business and those that actually failed.
The Springate model takes the following form:
Z = 1.03A + 3.07B + 0.66C + 0.4D
Z < 0.862; then the firm is classified as "failed"
WHERE A = Working Capital/Total Assets
B = Net Profit before Interest and Taxes/Total Assets
C = Net Profit before Taxes/Current Liabilities
D = Sales/Total Assets
This model achieved an accuracy rate of 92.5% using the 40 companies tested by Springate. Botheras
tested the Springate Model on 50 companies with an average asset size of $2.5 million and found an 88.0%
accuracy rate. Sands tested the Springate Model on 24 companies with an average asset size of $63.4
million and found an accuracy rate of 83.3%.
Year Year Year Year

2006 2007 2008 2009
Working Capital 0 0 0 0
Net Profit before interest and Taxes 2,006 2,007 2,008 2,009
Total Assets 0 0 0 0
Net Profit before Taxes 0 0 0 0
Current Liabilities 2,006 2,007 2,008 2,009
Sales 0 0 0 0
Analysis
Year Year Year Year
2006 2007 2008 2009
Working Capital/Total Assets #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Net Profit before interest and Taxes/Total Assets #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Net Profit before Taxes/Current Liabilities 0.00 0.00 0.00 0.00

Sales/Total Assets #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Z= #DIV/0! #DIV/0! #DIV/0! #DIV/0!
If Z is less than 2.675 then the firm is classified as Failed.
Springate Analysis
12.00
10.00
8.00
6.00
4.00
2.00
0.00
2006 2007 2008 2009
PT INDONESIA POWER

INDOPOWER
6200 XYZ Drive
Phone: (000) 000-0000
FAX: (000) 000-0000
December 11, 2019
Breakdown of Operating Costs-12 Periods

TOTAL OPERATING COSTS
COMPARATIVE PERIODS Year Year Year Year
2006 2007 2008 2009
Total For Period $0 $0 $0 $0
1 DAY $0 $0 $0 $0
1 HOUR $0.00 $0.00 $0.00 $0.00
1 MINUTE $0.00 $0.00 $0.00 $0.00
LABOR EXPENSE
2006 2007 2008 2009
1 DAY $0 $0 $0 $0
1 HOUR $0.00 $0.00 $0.00 $0.00
1 MINUTE $0.00 $0.00 $0.00 $0.00
MATERIAL EXPENSE
2006 2007 2008 2009
1 DAY $0 $0 $0 $0
1 HOUR $0.00 $0.00 $0.00 $0.00
1 MINUTE $0.00 $0.00 $0.00 $0.00
OTHER EXPENSES
2006 2007 2008 2009
1 DAY $0 $0 $0 $0
1 HOUR $0.00 $0.00 $0.00 $0.00
1 MINUTE $0.00 $0.00 $0.00 $0.00
PT INDONESIA POWER

INDOPOWER
6200 XYZ Drive
Phone: (000) 000-0000
FAX: (000) 000-0000
December 11, 2019
Breakeven Analysis Dollars & Percentage Summary
Year Year Year Year

2006 2007 2008 2009
ON SALES VOLUME OF........... $0 $0 $0 $0
BREAKEVEN VOLUME (DOLLARS) #DIV/0! #DIV/0! #DIV/0! #DIV/0!
BREAKEVEN POINT (PERCENT) #DIV/0! #DIV/0! #DIV/0! #DIV/0!
DAYS REQUIRED TO BREAKEVEN #DIV/0! #DIV/0! #DIV/0! #DIV/0!
DATE OF BREAKEVEN #DIV/0! #DIV/0! #DIV/0! #DIV/0!
SALES VOLUME REQUIRED

BEFORE PROFIT BEGINS......... #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Per Month #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Per Week #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Per Day #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Per Hour #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Per Minute #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Breakeven Analysis Percentages

1200.00%
1000.00%
800.00%
600.00%
200.00%
1200.00%
1000.00%
800.00%
600.00%
400.00%
200.00%
0.00%
1 2 3 4
PT INDONESIA POWER

Altman's Z-Scores Explained
Publicly Held Firms

Altman's model is probably the classic of this genre. The original data sample consisted
of 66 firms, half of which had filed for bankruptcy under Chapter 7. All businesses in the
database were manufacturers, and small firms with assets of less than $1 million were eliminated.
The Z-Score formula is as follows:

Z = 1.2X.sub.1 + 1.4X.sub.2 + 3.3X.sub.3 + 0.6X.sub.4 + 1.0X.sub.5
Where X.sub.1 = Working Capital/Total Assets.
Where X.sub.2 = Retained Earnings/Total Assets. This is a measure of cumulative

profitability that reflects the firm's age as well as earning power. Many studies have shown
failure rates to be closely related to the age of the business.
Where X.sub.3 = Earnings Before Income Taxes/Total Assets. This is a measure of

operating efficiency separated from any leverage effects. It recognizes operating earnings
as a key to long-run viability.
Where X.sub.4 = Market Value of Equity/Book Value of Debt. This ratio adds a market
dimension. Academic studies of stock markets suggest that security price changes may
foreshadow upcoming problems.
Where X.sub.5 = Sales/Total Assets. This is a standard turnover measure. Unfortunately, it

varies greatly from one industry to another.
Privately Held Firms.

If a firm's stock is not publicly traded, the X4 term (Market Value of Equity/Book Value of
Debt) cannot be calculated. To correct for this problem, the Z score can be re-estimated
using book values of equity. This provides the following score:
Z.sub.1 = .717X.sub.1 + .847X.sub.2 + 3.107X.sub.3 + .420X.sub.4 + .998X.sub.5
Nonmanufacturing-Small Business-Merchandising and Service firms Firms.

The X.sub.5 (Sales/Total Assets) ratio is believed to vary significantly by industry. It is likely
to be higher for merchandising and service firms than for manufacturers, since the former are
typically less capital intensive. Consequently, nonmanufacturers would have significantly higher
asset turnover and Z scores. The model is thus likely to underpredict certain sorts of bankruptcy.
To correct for this potential defect, Altman recommends the following correction that eliminates
the X.sub.5 ratio:
Z.sub.11 = 6.56X.sub.1 + 3.26X.sub.2 + 6.72X.sub.3 + 1.05X.sub.4

The Altman Z-Score Analysis - Publicly Held Firm
Your Z-Score if Publicly Held Firm
Year Year Year Year

2006 2007 2008 2009
Publicly Held Firm #DIV/0! #DIV/0! #DIV/0! #DIV/0!
KEY:
Z-SCORE ABOVE 2.99--YOU'RE IN GOOD SHAPE
Z-SCORE BETWEEN 2.99 and 1.81--WARNING SIGNS
Z-SCORE BELOW 1.81--BIG TROUBLE--COULD BE HEADING TOWARD BANKRUPTCY
12.00
10.00
8.00
6.00
4.00
2.00
0.00

The Altman Z-Score Analysis - Privately Held Firm
Your Z-Score if Privately Held Firm
Year Year Year Year

2006 2007 2008 2009
Privately Held Firm #DIV/0! #DIV/0! #DIV/0! #DIV/0!
KEY:
Z-Score Analysis - Privately Held
12.00
10.00
8.00
6.00
4.00
2.00
0.00

The Altman Z-Score Analysis - Nonmanufacturing Firm
Your Z-Score if Small Business, Service, Retail Sales, or Wholesaler
Year Year Year Year

2006 2007 2008 2009
Nonmanuf. #DIV/0! #DIV/0! #DIV/0! #DIV/0!
KEY:
12.00
10.00
8.00
6.00
4.00
2.00
0.00

Ratios - What are they?
This section produces 12 important financial ratios. These ratios are usually thought of as belonging to four basic
categories: profitability ratios, liquidity ratios, activity ratios, and leverage ratios:
Category Ratio
Profitability ratios • Earnings Per Share
• Gross Profit Margin
• Net Profit Margin
• Return on Assets
• Return on Equity
Liquidity ratios • Current Ratio
• Quick Ratio
Activity ratios • Average Collection Period
• Inventory Turnover Ratio
Leverage ratios • Debt Ratio
• Equity Ratio
• Times Interest Earned Ratio
This is by no means an exhaustive list of the ratios that have been developed to help analyze a company's financial
position and the way that it conducts business. It is, however, representative.
Analyzing Profitability Ratios

If you are considering investing money in a company, its profitability is a major concern. If the company intends to pay
dividends to its stockholders, those dividends must come out of its profits. If the company hopes to increase its worth in
the marketplace by enhancing or expanding its product line, then an important source of capital to make improvements
is its profit margin. There are several different, but related, means of evaluating a company's profitability.
Analyzing Liquidity Ratios

The issue of liquidity, as you might expect, concerns creditors. Liquidity is a company's ability to meet its debts as they
come due. A company may have considerable total assets, but if those assets are difficult to convert to cash it is possible
that the company might be unable to pay its creditors in a timely fashion. Creditors want their loans to be paid in the
medium of cash, not in a medium such as inventory or factory equipment.

Analyzing Activity Ratios
There are various ratios that can give you insight into how well a company manages its operating and sales activities.
One primary goal-perhaps, the primary goal-of these activities is to produce income through effective use of its
resources. Two ways to measure this effectiveness are the Average Collection Period and the Inventory Turnover rate.
Analyzing Leverage Ratios

The term "leverage" means the purchase of assets with borrowed money. Suppose that your company retails office
supplies. When you receive an order for business cards, you pay one of your suppliers 50 percent of the revenue to print
them for you. This is a variable cost: the more you sell, the greater your cost.
But if you purchase the necessary printing equipment, you could make the business cards yourself. So doing would turn
a variable cost into a fixed cost: no matter how many cards you sell, the cost of printing them is fixed at however much
you paid for the printing equipment. The more cards you sell, the greater your profit margin. This effect is termed
operating leverage.
If you borrow money to acquire the printing equipment, you are using another type of leverage, termed financial
leverage. The cost is still fixed at however much money you must pay, at regular intervals, to retire the loan. Again, the
more cards you sell, the greater your profit margin. But if you do not sell enough cards to cover the loan payment, you
could lose money. In that case, it might be difficult to find funds either to make the loan payments or to cover your other
expenses. Your credit rating might fall, making it more costly for you to borrow other money.
Leverage is a financial tool that accelerates changes in income, both positive and negative. A company's creditors and
investors are interested in how much leverage has been used to acquire assets. From the standpoint of creditors, a high
degree of leverage represents risk because the company might not be able to repay a loan. From the investors'
standpoint, if the return on assets is less than the cost of borrowing money to acquire assets, then the investment is
unattractive. The investor could obtain a better return in different ways-one way would be to loan funds rather than to
invest them in the company.

Summary
This workbook has some of the financial ratios that are important to understanding how, and how well, a company
conducts its business. There are variations on virtually every ratio discussed here, and there are ratios that were not
covered at all, but their principal forms follow the formulas illustrated.
Only occasionally can you calculate one of these indicators and gain immediate insight into a business operation. More
frequently, it is necessary to know the sort of business that a company conducts, because the marketplace imposes
different demands on different lines of business. Furthermore, you can usually understand one ratio by considering it in
the context of another ratio (the debt ratio and the return on assets is a good example of one ratio providing the context
for another).
Keep in mind that it's important to evaluate a financial ratio in terms of its trend over time, of a standard such as an
industry average, and in light of other ratios that describe the company's operations and financial structure.

Liquidity Ratios
Current Ratio
INDOPOWER 1.20
6200 XYZ Drive
1.00
Phone: (000) 000-0000 0.80
FAX: (000) 000-0000
0.60
December 11, 2019 0.40
0.20
PT INDONESIA POWER
0.00
2006 2007 2008 2009
Current ratio Year Year Year Year

2006 2007 2008 2009
Current assets $2,006 $2,007 $2,008 $2,009
Current liabilities $2,006 $2,007 $2,008 $2,009
Current ratio 1.00 1.00 1.00 1.00
rasio lancar
The current ratio compares a company's current assets (those that can be converted to cash
during the current accounting period) to its current liabilities (those liabilities coming due
during the same period). The usual formula is:
Current Ratio = Current Assets / Current Liabilities
The current ratio measures the company's ability to repay the principal amounts of its
liabilities.
The current ratio is closely related to the concept of working capital. Working capital is the
difference between current assets and current liabilities.
Is a high current ratio good or bad? Certainly, from the creditor's standpoint, a high current
ratio means that the company is well-placed to pay back its loans. Consider, though, the
nature of the current assets: they consist mainly of cash and cash equivalents. Funds
invested in these types of assets do not contribute strongly and actively to the creation of
income. Therefore, from the standpoint of stockholders and management, a current ratio that
is very high means that the company's assets are not being used to best advantage.

Liquidity Ratios
Acid Test (Quick Ratio)
INDOPOWER 1.20
6200 XYZ Drive
ABC, California 00000-0000 1.00
Phone: (000) 000-0000 0.80
FAX: (000) 000-0000
0.60
December 11, 2019 0.40
0.20
PT INDONESIA POWER
0.00
2006 2007 2008 2009
Quick ratio Year Year Year Year

2006 2007 2008 2009
Current Assets $2,006 $2,007 $2,008 $2,009
Current Assets Less Inventory $2,006 $2,007 $2,008 $2,009
Current liabilities $2,006 $2,007 $2,008 $2,009
Quick ratio 1.00 1.00 1.00 1.00
Quick Ratio
The quick ratio is a variant of the current ratio. It takes into account the fact that inventory,
while it is a current asset, is not as liquid as cash or accounts receivable. Cash is
completely liquid; accounts receivable can normally be converted to cash fairly quickly, by
pressing for collection from the customer. But inventory cannot be converted to cash except
by selling it. The quick ratio determines the relationship between quickly accessible current
assets and current liabilities:
Quick Ratio = (Current Assets - Inventory) / Current Liabilities
The quick ratio shows whether a company can meet its liabilities from quickly-accessible
assets.
In practice, a quick ratio of 1.0 is normally considered adequate, with this caveat: the credit
periods that the company offers its customers and those granted to the company by its
creditor must be roughly equal. If revenues will stay in accounts receivable for as long as
90 days, but accounts payable are due within 30 days, a quick ratio of 1.0 will mean that
accounts receivable cannot be converted to cash quickly enough to meet accounts
payable.
It is possible for a company to manipulate the values of its current and quick ratios by
taking certain actions toward the end of an accounting period such as a fiscal year. It might
wait until the start of the next period to make purchases to its inventory, for example. Or, if
its business is seasonal, it might choose a fiscal year that ends after its busy season, when
inventories are usually low. As a potential creditor, you might want to examine the
company’s current and quick ratios on, for example, a quarterly basis.
creditor must be roughly equal. If revenues will stay in accounts receivable for as long as
90 days, but accounts payable are due within 30 days, a quick ratio of 1.0 will mean that
accounts receivable cannot be converted to cash quickly enough to meet accounts
payable.
It is possible for a company to manipulate the values of its current and quick ratios by
taking certain actions toward the end of an accounting period such as a fiscal year. It might
wait until the start of the next period to make purchases to its inventory, for example. Or, if
its business is seasonal, it might choose a fiscal year that ends after its busy season, when
inventories are usually low. As a potential creditor, you might want to examine the
company’s current and quick ratios on, for example, a quarterly basis.
Both a current and a quick ratio can also mislead you if the inventory figure does not
represent the current replacement cost of the materials in inventory. There are various
methods of valuing inventory. The LIFO method, in particular, can result in an inventory
valuation that is much different from the inventory's current replacement value; this is
because it assumes that the most recently acquired inventory is also the most recently
sold.
If your actual costs to purchase materials are falling, for example, the LIFO method could
result in an over-valuation of the existing inventory. This would tend to inflate the value of
the current ratio, and to underestimate the value of the quick ratio if you calculate it by
subtracting inventory from current assets, rather than summing cash and cash equivalents.

Earnings Per Share (EPS)
INDOPOWER $12.00
6200 XYZ Drive
ABC, California 00000-0000 $10.00
Phone: (000) 000-0000 $8.00
FAX: (000) 000-0000
$6.00
December 11, 2019 $4.00
$2.00
PT INDONESIA POWER
$0.00
2006 2007 2008 2009
Earnings Per Share (EPS) Year Year Year Year

2006 2007 2008 2009
Shares of common stock outstanding 0 0 0 0
EPS #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Earnings Per Share (EPS)
Depending on your financial objectives, you might consider investing in a company to
obtain a steady return on your investment in the form of regular dividend payments, or to
obtain a profit by owning the stock as the market value of its shares increases. These two
objectives might both be met, but in practice they often are not. Companies frequently face
a choice of distributing income in the form of dividends, or retaining that income to invest in
research, new products, and expanded operations. The hope, of course, is that the
retention of income to invest in the company will subsequently increase its income, thus
making the company more profitable and increasing the market value of its stock.
In either case, Earnings Per Share (EPS) is an important measure of the company's
income. Its basic formula is:
EPS = Income Available for Common Stock / Shares of Common Stock Outstanding
EPS is usually a poor candidate for vertical analysis, because different companies always
have different numbers of shares of stock outstanding. It may be a good candidate for
horizontal analysis, if you have access both to information about the company's income
and shares outstanding. With both these items, you can control for major fluctuations over
time in shares outstanding. This sort of control is important: it is not unusual for a company
to purchase its own stock on the open market to reduce the number of outstanding shares.
So doing increases the value of the EPS ratio, perhaps making the stock appear a more
attractive investment.
Note that the EPS can decline steadily throughout the year. Because, the number of shares
outstanding is constant throughout the year, the EPS changes are due solely to changes in
net income.
EPS is usually a poor candidate for vertical analysis, because different companies always
have different numbers of shares of stock outstanding. It may be a good candidate for
horizontal analysis, if you have access both to information about the company's income
and shares outstanding. With both these items, you can control for major fluctuations over
time in shares outstanding. This sort of control is important: it is not unusual for a company
to purchase its own stock on the open market to reduce the number of outstanding shares.
So doing increases the value of the EPS ratio, perhaps making the stock appear a more
attractive investment.
Note that the EPS can decline steadily throughout the year. Because, the number of shares
outstanding is constant throughout the year, the EPS changes are due solely to changes in
net income.
Many companies issue at least two different kinds of stock: common and preferred.
Preferred stock is issued under different conditions than common stock. Preferred stock is
often callable at the company's discretion, it pays dividends at a different (usually, higher)
rate per share, it might not carry voting privileges, and often has a higher priority than
common stock as to the distribution of liquidated assets if the company goes out of
business.
Calculating EPS for a company that has issued preferred stock introduces a slight
complication. Because the company pays dividends on preferred stock before any
distribution to shareholders of common stock, it is necessary to subtract these dividends
from net income:
EPS (Net Income - Preferred Dividends) / Shares of Common Stock Outstanding

Gross Profit Margin
INDOPOWER 1200.0%
6200 XYZ Drive
ABC, California 00000-0000 1000.0%
Phone: (000) 000-0000 800.0%

FAX: (000) 000-0000
600.0%
December 11, 2019 400.0%
200.0%
PT INDONESIA POWER
0.0%
2006 2007 2008 2009
Gross Profit Margin Year Year Year Year Year

2006 2007 2008 2009 ###
Sales $0 $0 $0 ###
$0
Cost of sales $0 $0 $0 ###
$0
Gross profit margin #DIV/0! #DIV/0! #DIV/0! #DIV/0!
###
Gross Profit Margin
The gross profit margin is a basic ratio that measures the added value that the market
places on a company's non-manufacturing activities. Its formula is:
Gross profit margin = (Sales - Cost of Goods Sold) / Sales
The cost of goods sold is, clearly, an important component of the gross profit margin. It is
usually calculated as the sum of the cost of materials the company purchases plus any
labor involved in the manufacture of finished goods, plus associated overhead.
The gross profit margin depends heavily on the type of business in which a company is
engaged. A service business, such as a financial services institution or a laundry,
typically has little or no cost of goods sold. A manufacturing, wholesaling, or retailing
company typically has a large cost of goods sold, with a gross profit margin that varies
from 20 percent to 40 percent.
The gross profit margin measures the amount that customers are willing to pay for a
company's product, over and above the company's cost for that product. As mentioned
previously, this is the value that the company adds to that of the products it obtains from
its suppliers. This margin can depend on the attractiveness of additional services, such
as warranties, that the company provides. The gross profit margin also depends heavily
on the ability of the sales force to persuade its customers of the value added by the
company.
This added value is, of course, created by other costs such as operating expenses. In
turn, these costs must be met largely by the gross profit on sales. If customers do not
place sufficient value on whatever the company adds to its products, there will not be
enough gross profit to pay for the associated costs. Therefore, the calculation of the
gross profit margin helps to highlight the effectiveness of the company's sales strategies
The gross profit margin measures the amount that customers are willing to pay for a
company's product, over and above the company's cost for that product. As mentioned
previously, this is the value that the company adds to that of the products it obtains from
its suppliers. This margin can depend on the attractiveness of additional services, such
as warranties, that the company provides. The gross profit margin also depends heavily
on the ability of the sales force to persuade its customers of the value added by the
company.
This added value is, of course, created by other costs such as operating expenses. In
turn, these costs must be met largely by the gross profit on sales. If customers do not
place sufficient value on whatever the company adds to its products, there will not be
enough gross profit to pay for the associated costs. Therefore, the calculation of the
gross profit margin helps to highlight the effectiveness of the company's sales strategies
and sales management.

Net Profit Margin
INDOPOWER 1200.00%
6200 XYZ Drive
ABC, California 00000-0000 1000.00%
Phone: (000) 000-0000 800.00%

FAX: (000) 000-0000
600.00%
December 11, 2019 400.00%
200.00%
PT INDONESIA POWER
0.00%
2006 2007 2008 2009
Net Profit Margin Year Year Year Year

2006 2007 2008 2009
Net Income $0 $0 $0 $0
Sales $0 $0 $0 $0
Net profit margin #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Net Profit Margin
The net profit margin narrows the focus on profitability, and highlights not just the
company's sales efforts, but also its ability to keep operating costs down, relative to sales.
The formula generally used to determine the net profit margin is:
Net Profit Margin = Earnings After Taxes / Sales
When net profit margin falls dramatically from the first to the fourth quarters, a principal
culprit is cost of sales.
Another place to look when you see a discrepancy between gross profit margin and net
profit margin is operating expenses. When the two margins covary closely, it suggests that
management is doing a good job of reducing expenses when sales fall, and increasing
expenses when necessary to support production and sales in better times.

Return on Assets
INDOPOWER 1200.0%
6200 XYZ Drive
1000.0%
Phone: (000) 000-0000 800.0%
FAX: (000) 000-0000
600.0%
December 11, 2019 400.0%
200.0%
PT INDONESIA POWER
0.0%
2006 2007 2008 2009
Return on Assets Year Year Year Year

2006 2007 2008 2009
Total assets $0 $0 $0 $0
Return on assets #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Return on Assets
One of management's most important responsibilities is to bring about a profit by effective
use of the resources it has at hand. One ratio that speaks to this question is return on
assets. There are several ways to measure this return; one useful method is:
Return on Assets = Net Income/ Total Assets
This formula will return the percentage earnings for a company in terms of its total assets.
The better the job that management does in managing its assets-the resources available to
it-to bring about profits, the greater this percentage will be.
It's normal to calculate the return on total assets on an annual basis, rather than on a
quarterly basis.

Return on Equity
INDOPOWER 1200.0%
6200 XYZ Drive
1000.0%
Phone: (000) 000-0000 800.0%
FAX: (000) 000-0000
600.0%
December 11, 2019 400.0%
200.0%
PT INDONESIA POWER
0.0%
2006 2007 2008 2009
Return on Equity Year Year Year Year

2006 2007 2008 2009
Stockholder's equity Err:522 $0 $0 $0
Return on equity Err:522 #DIV/0! #DIV/0! #DIV/0!
Return on Equity
Another related profitability measure to Return on Assets is the Return on Equity. Again,
there are several ways to calculate this ratio; here, it is measured according to this formula:
Return on Equity = Net Income / Stockholder's Equity
You can compare return on equity with return on assets to infer how a company obtains the
funds used to acquire assets.
The principal difference between the formula for return on assets and for return on
equity is the use of equity rather than total assets in the denominator, and it is here
that the technique of comparing ratios comes into play. By examining the difference
between Return on Assets and Return on Equity, you can largely determine how the
company is funding its operations.
Assets are acquired through two major sources: creditors (through borrowing) and
stockholders (through retained earnings and capital contributions). Collectively, the retained
earnings and capital contributions constitute the company's equity. When the value of the
company's assets exceeds the value of its equity, you can expect that some form of
financial leverage makes up the difference: i.e., debt financing.
Therefore, if the Return on Equity ratio is much larger than the Return on Assets ratio, you
can infer that the company has funded some portion of its operations through borrowing.

Activity Ratios
Average Collection Period
INDOPOWER 12.00
6200 XYZ Drive
Phone: (000) 000-0000 8.00
FAX: (000) 000-0000
6.00
December 11, 2019 4.00
2.00
PT INDONESIA POWER
0.00
2006 2007 2008 2009
Average Collection Period Year Year Year Year

2006 2007 2008 2009
Credit Sales $0 $0 $0 $0
Days Per Year 365 365 365 365
Credit sales per day $0 $0 $0 $0
Average Collection Period - Days #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Average Collection Period Ratio #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Average Collection Period
You can obtain a general estimate of the length of time it takes to receive payment for
goods or services by calculating the Average Collection Period.
One formula for this ratio is:
Average Collection Period = Accounts Receivable / (Credit Sales / Days)
Where Days is the number of days in the period for which Accounts Receivable and Credit
Sales accumulate.
You should interpret the average collection period in terms of the company's credit policies.
If, for example, the company's policy as stated to its customers is that payment is to be
received within two weeks, then an average collection period of 30 days indicates that
collections are lagging. It may be that collection procedures need to be reviewed, or it is
possible that one particularly large account is responsible for most of the collections in
arrears. It is also possible that the qualifying procedures used by the sales force are not
stringent enough.
The calculation of the Average Collection Period assumes that credit sales are distributed
roughly evenly during any given period. To the degree that the credit sales cluster at the
end of the period, the Average Collection Period will return an inflated figure. If you obtain a
result that appears too long (or too short), be sure to check whether the sales dates occur
evenly throughout the period in question.
Regardless of the cause, if the average collection period is over-long, it means that the
company is losing profit. The company is not converting cash due from customers into new
possible that one particularly large account is responsible for most of the collections in
arrears. It is also possible that the qualifying procedures used by the sales force are not
stringent enough.
The calculation of the Average Collection Period assumes that credit sales are distributed
roughly evenly during any given period. To the degree that the credit sales cluster at the
end of the period, the Average Collection Period will return an inflated figure. If you obtain a
result that appears too long (or too short), be sure to check whether the sales dates occur
evenly throughout the period in question.
Regardless of the cause, if the average collection period is over-long, it means that the
company is losing profit. The company is not converting cash due from customers into new
assets that can, in turn, be used to generate new income.

Activity Ratios
Inventory Turnover Ratio
INDOPOWER 12.00
6200 XYZ Drive
Phone: (000) 000-0000 8.00
FAX: (000) 000-0000
6.00
December 11, 2019 4.00
2.00
PT INDONESIA POWER
0.00
2006 2007 2008 2009
Inventory Turnover Ratio Year Year Year Year

2006 2007 2008 2009
Cost of Goods Sold $0 $0 $0 $0
Average Inventory $0 $0 $0 $0
Inventory Turnover #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Inventory Turnover Ratio
No company wants to have too large an inventory (the sales force excepted:
salespeople prefer to be able to tell their customers that they can obtain their
purchase this afternoon). Goods that remain in inventory too long tie up the
company's assets in idle stock, often incur carrying charges for the storage of the
goods, and can become obsolete while awaiting sale.
Just-in-Time inventory procedures attempt to ensure that the company obtains its
inventory no sooner than absolutely required in order to support its sales efforts. That
is, of course, an unrealistic ideal, but by calculating the inventory turnover rate you
can estimate how well a company is approaching the ideal.
The formula for the Inventory Turnover Ratio is:
Inventory Turnover = Cost of Goods Sold / Average Inventory
where the Average Inventory figure refers to the value of the inventory on any given
day during the period during which the Cost of Goods Sold is calculated. The higher
an inventory turnover rate, the more closely a company conforms to just-in-time
procedures.
The figures for cost of goods sold and average inventory are taken directly from the
Income Statement's cost of sales and the Balance Sheet's inventory levels. In a
situation where you know only the beginning and ending inventory-for example, at the
beginning and the ending of a period-you would use the average of the two levels:
hence the term "average inventory."
An acceptable inventory turnover rate can be determined only by knowledge of a

company's business sector. If you are in the business of wholesaling fresh produce,
where the Average Inventory figure refers to the value of the inventory on any given
day during the period during which the Cost of Goods Sold is calculated. The higher
an inventory turnover rate, the more closely a company conforms to just-in-time
procedures.
The figures for cost of goods sold and average inventory are taken directly from the
Income Statement's cost of sales and the Balance Sheet's inventory levels. In a
situation where you know only the beginning and ending inventory-for example, at the
beginning and the ending of a period-you would use the average of the two levels:
hence the term "average inventory."
An acceptable inventory turnover rate can be determined only by knowledge of a

company's business sector. If you are in the business of wholesaling fresh produce,
for example, you would probably require an annual turnover rate in the 50s: a much
lower rate would mean that you were losing too much inventory to spoilage. But if you
sell computing equipment, you could probably afford an annual turnover rate of
around 3 or 4, because hardware does not spoil, nor does it become technologically
obsolete more frequently than every few months.

Leverage Ratios
Debt Ratio
INDOPOWER 1200.0%
6200 XYZ Drive
ABC, California 00000-0000 1000.0%
Phone: (000) 000-0000 800.0%

FAX: (000) 000-0000
600.0%
December 11, 2019 400.0%
200.0%
PT INDONESIA POWER
0.0%
2006 2007 2008 2009
Debt Ratio Year Year Year Year

2006 2007 2008 2009
Debt ratio #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Debt Ratio
The debt ratio is defined by this formula:
Debt ratio = Total Liabilities / Total assets
It is a healthy sign when a company's debt ratio is falls, although both stockholders and
potential creditors would prefer to see the rate of decline in the debt ratio more closely
match the decline in return on assets. As the return on assets falls, the net income available
to make payments on debt also falls. This company should probably take action to retire
some of its short-term debt, and the current portion of its long-term debt, as soon as
possible.

Leverage Ratios
Equity Ratio
INDOPOWER 1200.0%
6200 XYZ Drive
ABC, California 00000-0000 1000.0%
Phone: (000) 000-0000 800.0%

FAX: (000) 000-0000
600.0%
December 11, 2019 400.0%
200.0%
PT INDONESIA POWER
0.0%
2006 2007 2008 2009
Equity Ratio Year Year Year Year

2006 2007 2008 2009
Total Equity Err:522 $0 $0 $0
Equity ratio Err:522 #DIV/0! #DIV/0! #DIV/0!
Equity Ratio
The equity ratio is the opposite of the debt ratio. It is that portion of the company's assets
financed by stockholders:
Equity Ratio = Total Equity / Total assets
It is usually easier to acquire assets through debt than to acquire them through equity. There
are certain obvious considerations: for example, you might need to acquire investment
capital from many investors; whereas you might be able to borrow the required funds from
just one creditor. Less obvious is the issue of priority.
By law, if a firm ceases operations, its creditors have the first claim on its assets to help
repay the borrowed funds. Therefore, an investor's risk is somewhat higher than that of a
creditor, and the effect is that stockholders tend to demand a greater return on their
investment than a creditor does on its loan. The stockholder's demand for a return can take
the form of dividend requirements or return on assets, each of which tend to increase the
market value of their stock.
But there is no "always" in financial planning. Because investors usually require a higher
return on their investment than do creditors, it might seem that debt is the preferred method
of raising funds to acquire assets. Potential creditors, though, look at ratios such as the
return on assets and the debt ratio. A high debt ratio (or, conversely, a low equity ratio)
means that existing creditors have supplied a large portion of the company's assets, and
that there is relatively little stockholder's equity to help absorb the risk.

Leverage Ratios
Times Interest Earned Ratio
INDOPOWER 12.0
6200 XYZ Drive
Phone: (000) 000-0000 8.0

FAX: (000) 000-0000
6.0
December 11, 2019 4.0
2.0
PT INDONESIA POWER
0.0
2006 2007 2008 2009
Times Interest Earned Ratio Year Year Year Year

2006 2007 2008 2009
EBIT $0 $0 $0 $0
Interest charges $0 $0 $0 $0
Times interest earned #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Times interest Earned Ratio
One measure frequently used by creditors to evaluate the risk involved in loaning money to
a firm is the Times Interest Earned ratio. This is the number of times in a given period that a
company earns enough income to cover its interest payments. A ratio of 5, for example,
would mean that the amount of interest payments is earned 5 times over during that period.
The usual formula is:
Times Interest Earned = *EBIT / Total Interest Payments
*EBIT stands for Earnings Before Interest and Taxes.
The Times Interest Earned ratio, in reality, seldom exceeds 10. A value of 44.1 is very high,
although certainly not unheard of during a particularly good quarter. A value of 5.1 would
usually be considered strong but within the normal range.
Notice that this is a measure of how deeply interest charges cut into a company's income.
A ratio of 1, for example, would mean that the company earns enough income (after
covering such costs as operating expenses and costs of sales) to cover only its interest
charges. There would be no income remaining to pay income taxes (of course, in this case
it's likely that there would be no income tax liability), to meet dividend requirements or to
retain earnings for future investments.

INDOPOWER
6200 XYZ Drive
Phone: (000) 000-0000
FAX: (000) 000-0000
December 11, 2019
EXPANDED FINANCIAL RATIOS

Description Year Year Year Year
2006 2007 2008 2009
Amortization and Depreciation Expense to Net Sales N/A N/A N/A N/A
AP to Net Sales #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Current Liabilities to Inventory N/A N/A N/A N/A
Current Liabilities to Net Worth (1.00) (1.00) (1.00) (1.00)
Current Ratio 1.00 1.00 1.00 1.00
Days Inventory N/A N/A N/A N/A
Days Purchases in AP N/A N/A N/A N/A
Days Sales in AR N/A N/A N/A N/A
Gross Profit Percentage N/A N/A N/A N/A
Income before tax to Net Worth 0.00% 0.00% 0.00% 0.00%
Income before tax to Total Assets #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Interest Expense to Net Sales N/A N/A N/A N/A
Inventory Turnover #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Net Sales to AR #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Net Sales to Inventory #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Net Sales to Net Fixed Assets - - - -
Net Sales to Net Worth - - - -
Net Sales to Total Assets #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Net Sales to Working Capital #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Net Worth to Total Liabilities (1.00) (1.00) (1.00) (1.00)
Operating Expenses as % of Net Sales N/A N/A N/A N/A
Quick Ratio 1.00 1.00 1.00 1.00
Retained Earning to Net Income #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Return on Net Sales N/A N/A N/A N/A
Return on Net Worth 0.00% 0.00% 0.00% 0.00%
Return on Total Assets #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Times Interest Earned N/A N/A N/A N/A
Total Assets to Net Sales #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Total Liabilities to Net Worth (1.00) (1.00) (1.00) (1.00)
Working Capital $0 $0 $0 $0
Z-Score - Non-manufacturing #DIV/0! #DIV/0! #DIV/0! #DIV/0!

EXPANDED FINANCIAL RATIOS
PT INDONESIA POWER

Financial Snapshot - Summary Charts
Year Year Year Year

2006 2007 2008 2009
Return on Investment % #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Return on Assets % #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Net Profit Margin % #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Debt Ratio % Err:522 #DIV/0! #DIV/0! #DIV/0!
Leverage Ratio 0 0 0 0
Current Ratio 1.00 1.00 1.00 1.00
Acid Test 1.00 1.00 1.00 1.00
Snapshot Summary
1200.00%
1000.00%
800.00%
600.00%
400.00%
200.00%
0.00%
2006 2007 2008 2009
Return on Investment % Return on As sets %
Net Profit Margin % Debt Ratio %
Return on Investment %
1200.00%
1000.00%
800.00%
600.00%
400.00%
200.00%
0.00%
2006 2007 2008 2009
1200.00%
1000.00%
800.00%
600.00%
400.00%
200.00%
0.00%
2006 2007 2008 2009
Return on Assets %
1200.00%
1000.00%
800.00%
600.00%
400.00%
200.00%
0.00%
2006 2007 2008 2009
Net Profit Margin %

1200.00%
1000.00%
800.00%
600.00%
400.00%
200.00%
0.00%
2006 2007 2008 2009

600.00%
400.00%
200.00%
0.00%
2006 2007 2008 2009
Debt Ratio %
1200.00%
1000.00%
800.00%
600.00%
400.00%
200.00%
0.00%
2006 2007 2008 2009
Leverage Ratio
1
1
1
1
1
1
0
0
0
0
0
2006 2007 2008 2009
Current Ratio
1.20
1.00
0.80
Current Ratio
1.20
1.00
0.80
0.60
0.40
0.20
0.00
2006 2007 2008 2009
Acid Test
1.20
1.00
0.80
0.60
0.40
0.20
0.00
2006 2007 2008 2009
PT INDONESIA POWER

Financial Snapshot - Period 1
PROFIT Net Profit $ Net Profit %
RATIOS - #DIV/0!
Net Profit
Margin % Operating Expenses Inventory -
#DIV/0! ¸ -
Return on Accounts Receivable -
Assets % Sales
Return on #DIV/0! X - ¸
Investment % Sales
#DIV/0! -
Gross Profit _
Asset Turnover ¸ Gross Profit % - Cost of Sales
#DIV/0! #DIV/0! ¸ -
X Sales
-
Total Assets
-
Fixed Assets
2,006
Leverage Ratio
0 ¸ +
Current Assets
2,006
Investment
1,625,000
= _
+
Total Liabilities = Non-Current + Current Liabilities

Err:522 Err:522 2,006
¸
Debt Ratio Total Assets
Err:522 -
PT INDONESIA POWER

ancial Snapshot - Period 1
Activity ratios
Inventory for
x 365 divided by cost of sales = #DIV/0! days
Average time to collect
x 365 divided by credit sales = #DIV/0! days
Liquidity Ratios
a) Current Ratio = 1.00
Current Assets
Current Liabilities
b) Acid Test = 1.00
Current assets minus inventory
Current Liabilities
Total Current Assets
Total Fixed Assets
Total Assets
Total Current Liabilities
Total Liabilities
Total Stockholders' Equity
Working Capital
PT INDONESIA POWER

RATIOS - #DIV/0!
Net Profit
#DIV/0! ¸ -
Assets % Sales
Investment % Sales
#DIV/0! -
Gross Profit _
#DIV/0! #DIV/0! ¸ -
X Sales
-
Total Assets
-
Fixed Assets
2,007
Leverage Ratio
0 ¸ +
Current Assets
2,007
Investment
1,625,000
= _
+

2,007 - 2,007
¸
#DIV/0! -
PT INDONESIA POWER

Activity ratios
Inventory for
Liquidity Ratios
Current Assets
Current Liabilities
b) Acid Test = 1.00
Current Liabilities

Total Fixed Assets
Total Assets
Total Liabilities

Working Capital
PT INDONESIA POWER

RATIOS - #DIV/0!
Net Profit
#DIV/0! ¸ -
Assets % Sales
Investment % Sales
#DIV/0! -
Gross Profit _
#DIV/0! #DIV/0! ¸ -
X Sales
-
Total Assets
-
Fixed Assets
2,008
Leverage Ratio
0 ¸ +
Current Assets
2,008
Investment
1,625,000
= _
+

2,008 - 2,008
¸
#DIV/0! -
PT INDONESIA POWER

Activity ratios
Inventory for
Liquidity Ratios
Current Assets
Current Liabilities
b) Acid Test = 1.00
Current Liabilities

Total Fixed Assets
Total Assets
Total Liabilities

Working Capital
PT INDONESIA POWER

RATIOS - #DIV/0!
Net Profit
#DIV/0! ¸ -
Assets % Sales
Investment % Sales
#DIV/0! -
Gross Profit _
#DIV/0! #DIV/0! ¸ -
X Sales
-
Total Assets
-
Fixed Assets
2,009
Leverage Ratio
0 ¸ +
Current Assets
2,009
Investment
1,625,000
= _
+

2,009 - 2,009
¸
#DIV/0! -
PT INDONESIA POWER

Activity ratios
Inventory for
Liquidity Ratios
Current Assets
Current Liabilities
b) Acid Test = 1.00
Current Liabilities

Total Fixed Assets
Total Assets
Total Liabilities

Working Capital
PT INDONESIA POWER

RATIOS - #DIV/0!
Net Profit
#DIV/0! ¸ -
Assets % Sales
Investment % Sales
#DIV/0! -
Gross Profit _
#DIV/0! #DIV/0! ¸ -
X Sales
-
Total Assets
-
Fixed Assets
2,010
Leverage Ratio
0 ¸ +
Current Assets
2,010
Investment
1,625,000
= _
+

2,010 - 2,010
¸
#DIV/0! -
PT INDONESIA POWER

Activity ratios
Inventory for
Liquidity Ratios
Current Assets
Current Liabilities
b) Acid Test = 1.00
Current Liabilities

Total Fixed Assets
Total Assets
Total Liabilities

Working Capital
PT INDONESIA POWER

RATIOS - #DIV/0!
Net Profit
#DIV/0! ¸ -
Assets % Sales
Investment % Sales
#DIV/0! -
Gross Profit _
#DIV/0! #DIV/0! ¸ -
X Sales
-
Total Assets
-
Fixed Assets
2,011
Leverage Ratio
0 ¸ +
Current Assets
2,011
Investment
1,625,000
= _
+

2,011 - 2,011
¸
#DIV/0! -
PT INDONESIA POWER

Activity ratios
Inventory for
Liquidity Ratios
Current Assets
Current Liabilities
b) Acid Test = 1.00
Current Liabilities

Total Fixed Assets
Total Assets
Total Liabilities

Working Capital
PT INDONESIA POWER

RATIOS - #DIV/0!
Net Profit
#DIV/0! ¸ -
Assets % Sales
Investment % Sales
#DIV/0! -
Gross Profit _
#DIV/0! #DIV/0! ¸ -
X Sales
-
Total Assets
-
Fixed Assets
2,012
Leverage Ratio
0 ¸ +
Current Assets
2,012
Investment
1,625,000
= _
+

2,012 - 2,012
¸
#DIV/0! -
PT INDONESIA POWER

Activity ratios
Inventory for
Liquidity Ratios
Current Assets
Current Liabilities
b) Acid Test = 1.00
Current Liabilities

Total Fixed Assets
Total Assets
Total Liabilities

Working Capital
PT INDONESIA POWER

RATIOS - #DIV/0!
Net Profit
#DIV/0! ¸ -
Assets % Sales
Investment % Sales
#DIV/0! -
Gross Profit _
#DIV/0! #DIV/0! ¸ -
X Sales
-
Total Assets
-
Fixed Assets
2,013
Leverage Ratio
0 ¸ +
Current Assets
2,013
Investment
1,625,000
= _
+

2,013 - 2,013
¸
#DIV/0! -
PT INDONESIA POWER

Activity ratios
Inventory for
Liquidity Ratios
Current Assets
Current Liabilities
b) Acid Test = 1.00
Current Liabilities

Total Fixed Assets
Total Assets
Total Liabilities

Working Capital
PT INDONESIA POWER

RATIOS - #DIV/0!
Net Profit
#DIV/0! ¸ -
Assets % Sales
Investment % Sales
#DIV/0! -
Gross Profit _
#DIV/0! #DIV/0! ¸ -
X Sales
-
Total Assets
-
Fixed Assets
2,014
Leverage Ratio
0 ¸ +
Current Assets
2,014
Investment
1,625,000
= _
+

2,014 - 2,014
¸
#DIV/0! -
PT INDONESIA POWER

Activity ratios
Inventory for
Liquidity Ratios
Current Assets
Current Liabilities
b) Acid Test = 1.00
Current Liabilities

Total Fixed Assets
Total Assets
Total Liabilities

Working Capital
PT INDONESIA POWER

RATIOS - #DIV/0!
Net Profit
#DIV/0! ¸ -
Assets % Sales
Investment % Sales
#DIV/0! -
Gross Profit _
#DIV/0! #DIV/0! ¸ -
X Sales
-
Total Assets
-
Fixed Assets
2,015
Leverage Ratio
0 ¸ +
Current Assets
2,015
Investment
1,625,000
= _
+

2,015 - 2,015
¸
#DIV/0! -
PT INDONESIA POWER

ncial Snapshot - Period 10
Activity ratios
Inventory for
Liquidity Ratios
Current Assets
Current Liabilities
b) Acid Test = 1.00
Current Liabilities

Total Fixed Assets
Total Assets
Total Liabilities

Working Capital
PT INDONESIA POWER

RATIOS - #DIV/0!
Net Profit
#DIV/0! ¸ -
Assets % Sales
Investment % Sales
#DIV/0! -
Gross Profit _
#DIV/0! #DIV/0! ¸ -
X Sales
-
Total Assets
-
Fixed Assets
2,016
Leverage Ratio
0 ¸ +
Current Assets
2,016
Investment
1,625,000
= _
+

2,016 - 2,016
¸
#DIV/0! -
PT INDONESIA POWER

Activity ratios
Inventory for
Liquidity Ratios
Current Assets
Current Liabilities
b) Acid Test = 1.00
Current Liabilities

Total Fixed Assets
Total Assets
Total Liabilities

Working Capital
PT INDONESIA POWER

RATIOS - #DIV/0!
Net Profit
#DIV/0! ¸ -
Assets % Sales
Investment % Sales
#DIV/0! -
Gross Profit _
#DIV/0! #DIV/0! ¸ -
X Sales
-
Total Assets
-
Fixed Assets
2,017
Leverage Ratio
0 ¸ +
Current Assets
2,017
Investment
1,625,000
= _
+

2,017 - 2,017
¸
#DIV/0! -
PT INDONESIA POWER

Activity ratios
Inventory for
Liquidity Ratios
Current Assets
Current Liabilities
b) Acid Test = 1.00
Current Liabilities

Total Fixed Assets
Total Assets
Total Liabilities

Working Capital
PT INDONESIA POWER

Market Value Analysis
Overview
INDOPOWER
Determining the Value of a Business

Perhaps the most difficult stage in a buyout is determining an acceptable price for the business. Business valuation is partly an art
and partly a science. Computing the value of the company's tangible assets usually poses no major problem, but assigning a price
to the intangibles such as goodwill, almost always creates controversy. The seller expects goodwill to reflect the hard work and
long hours invested in building the business. The buyer, however, is willing to pay extra only for those intangible assets that
produce exceptional income. So, how can the buyer and the seller arrive at a fair price? There are few universal rules in
establishing the value of a business, but both parties should observe the following guidelines.
There is no single best method for determining a business's worth since each business sale is unique.
The wisest approach is to compute a company’s value using several techniques and then choose the one that makes the most
sense.
The deal must be financially feasible for both parties. The seller must be satisfied with the price received for the business.
Frequently, the entrepreneur feels like he is selling his baby. So, he does not want to leave a dime on the table. But, the buyer
cannot pay an excessively high price that would require heavy borrowing and would strain cash flows from the outset.
The buyer and the seller should have access to business records.
Valuations should be based on facts, not fiction.
No surprise is the best surprise. Both parties should deal with one another honestly and in good faith.
The primary reason buyers purchase existing businesses is to get their future earning potential. The second most common reason
is to get an established asset base. It is much easier to buy assets than to build them. Evaluation methods should take these
characteristics into consideration. However, too many business sellers and buyers depend on rules of thumb that ignore the unique
features of small companies. For example, cable TV franchises are valued at 11 times cash flow; advertising agencies at 75
percent of gross income; day care centers at $500 to $1,000 per child enrolled; motels at $12,300 to $14,600 per room; and
garbage pickup routes at two and one half times gross income. The problem is that such one size fits-all approaches seldom work
well because no two businesses are alike.
The best rule of thumb to use in valuing businesses is "Don't use rules of thumb to value businesses.” If you rely on these rules too
much, you can be led astray. On average, businesses sell for one third less than the accepted industry rule of thumb.
There are three techniques and several variations for determining the value of a business:
1 The balance sheet technique.
2 The earnings approach.
3 The market (or price/earnings) approach .
Balance Sheet Technique.

The balance sheet technique is one of the most commonly used methods of evaluating a business, although it is not highly
recommended because it oversimplifies the valuation process. This method computes the company's net worth or owner's equity
(net worth = assets - liabilities) and uses this figure as the value. The problem with this technique is that it fails to recognize reality:
Most small businesses have market values that exceed their reported book values.

Overview
INDOPOWER
The first step is to determine which assets are included in the sale. In most cases, the owner has some personal assets he does
not want to sell. Remember that net worth on a financial statement will likely differ significantly from actual net worth in the market.

Overview
INDOPOWER
Variation: Adjusted Balance Sheet Technique. A more realistic method for determining a company's value is to adjust the book
value of net worth to reflect actual market value. The values reported on a company’s books may overstate or understate the true
value of assets and liabilities. Typical assets in a business sale include notes and accounts receivable, inventories, supplies, and
fixtures. If a buyer purchases notes and accounts receivable, he should estimate the likelihood of their collection and adjust their
value accordingly.
In manufacturing, wholesale, and retail businesses, inventory usually is the largest single asset involved in the sale. Taking a
physical inventory count is the best way to determine accurately the quantity of goods to be transferred. The sale may include
three types of inventory, each having its own method of valuation: raw materials, work in-process, and finished goods. The buyer
and the seller must arrive at a method for evaluating the inventory First-in-first-out (FIFO), last-in-first out (LIFO), and average
costing are three frequently used techniques, but the most common methods use the cost of last purchase and the replacement
value of the inventory. Before accepting any inventory value, the buyer should evaluate the condition of the goods.
One young couple purchased a lumber yard without examining the inventory completely. After completing the sale, they discovered
that most of the lumber in a warehouse they had neglected to inspect was warped and was of little value as building material. The
bargain price they paid for the business turned out not to be the good deal they had expected. To avoid such problems, some
buyers insist on having a knowledgeable representative on an inventory team that counts the inventory and checks its condition.
Nearly every sale involves merchandise that cannot be sold; but, by taking this precaution, a buyer minimizes the chance of being
stuck with worthless inventory.
Fixed assets transferred in a sale might include land, buildings, equipment, and fixtures. Business owners frequently carry real
estate and buildings at prices well below their actual market value. Equipment and fixtures, depending on their condition and
usefulness, may increase or decrease the true value of the business. Appraisals of these assets on insurance policies are helpful
guidelines for establishing market value.
Business evaluations based on balance sheet method suffer one major drawback: they do not consider the future earning potential
of the business. These techniques value assets at current prices and do not consider them as tools for creating future profits. The
next method for computing the value of a business is based on its expected future earnings.
Earnings Approach.
The buyer of an existing business is essentially purchasing its future income. The earnings approach is more refined because it
considers the future income potential of the business.
There are three versions of the earnings approach.
Variation 1: Excess Earnings Method. This method combines both the value of the firm's existing assets (over its liabilities) and an
estimate of its future earnings potential to determine a business's selling price. One advantage of this technique is that it offers an
estimate of goodwill. Goodwill is an intangible asset that often creates problems in a business sale. In fact, the most common
method of valuing a business is to compute its tangible net worth and then to add an often arbitrary adjustment for goodwill. In
essence, goodwill is the difference between an established, successful business and one that has yet to prove itself. It is based on
the company’s reputation and its ability to attract customers. A buyer should not accept blindly the seller's arbitrary adjustment for
goodwill because it is likely to be inflated.

Overview
INDOPOWER
The excess earnings method provides a more consistent and realistic approach for determining the value of goodwill. It measures
goodwill by the amount of profit the business earns above the average firm in the same industry. It also assumes that the owner is
entitled to a reasonable return on the firm's adjusted tangible net worth..
Step 1: Compute adjusted tangible net worth.

Using the previous method of valuation, the buyer should compute the firm's adjusted tangible net worth.
Total tangible assets (adjusted for market value) minus total liabilities yields adjusted tangible net worth.
Step 2: Calculate the opportunity costs of investing in the business.

Opportunity Costs represent the cost of forgoing a choice. If the buyer chooses to purchase the assets of a business, he cannot
invest his money elsewhere. So, the opportunity cost of the purchase would be the amount the buyer could earn by investing the
same amount in a similar risk investment.
There are three principal components in the rate of return used to value a business: (1) the basic, risk free return, (2) an inflation
premium, and (3) the risk allowance for investing in the particular business. The basic, risk free return and the inflation premium
are reflected in investments like U. S. Treasury bonds. To determine the appropriate rate of return for investing in a business, the
buyer must add to this base rate a factor reflecting the risk involved in purchasing the company. The greater the risk, the higher the
rate of return. A normal-risk business typically indicates a 25 percent rate of return.

Overview
INDOPOWER
The second part of the buyer’s opportunity cost is the salary she could earn working for someone else.
Step 3: Project net earnings. The buyer must estimate the company's net earnings for the upcoming year before subtracting the
owner's salary. Averages can be misleading, so the buyer must be sure to investigate the trend of net earnings. Have they risen
steadily over the past five years, dropped significantly remained relatively constant, or fluctuated wildly? The more erratic your
earnings are, the more they will be discounted. Past income statements provide useful guidelines for estimating earnings.
Step 4: Compute extra earning power. A company’s extra earning power is the difference between forecasted earnings (step 3)
and total opportunity costs (step 2). Most small businesses that are for sale do not have extra earning power (i.e., excess
earnings). They show marginal or no profits.
Step 5: Estimate the value of intangibles. The owner can use the extra earning power of the business to estimate the value of its
intangible assets- that is, goodwill. Multiplying the extra earning power by a years of profit figure yields an estimate of the intangible
assets’ value. The years of profit figure for a normal risk business ranges from three to four. A very high-risk business may have a
years of profit figure of 1, while a well-established firm might use a figure of 7.
Step 6: Determine the value of the business. To determine the value of the business, the buyer simply adds the adjusted tangible
net worth (step 1) and the value of the intangibles (step 5).
Both the buyer and seller should consider the tax implications of transferring goodwill. The amount the seller receives for goodwill
is taxed as ordinary income. The buyer cannot count this amount as a deduction because goodwill is a capital asset that cannot be
depreciated or amortized for tax purposes. Instead, the buyer would prefer to pay the seller for signing a covenant not to compete
because its value is fully tax deductible.
The success of this approach depends on the accuracy of the buyer's estimates of net earnings and risk. But, it does offer a
systematic method for assigning a value to goodwill.
Variation 2: Capitalized Earnings Approach. Another earnings approach capitalizes expected net profits to determine the value of
a business. The buyer should prepare his own pro forma income statement and should ask the seller to prepare one also. Use a
five year weighted average of past sales (with the greatest weights assigned to the most recent years) to estimate sales for the
upcoming year.
Once again, the buyer must evaluate the risk involved in purchasing the business to determine the appropriate rate of return on the
investment. The greater the risk involved, the higher the return the buyer requires. Risk determination is always somewhat
subjective, but it is necessary for proper evaluation. The capitalized earnings approach divides estimated net earnings (after
subtracting the owner's reasonable salary) by the rate of return that reflects the risk level. For example, the capitalized value
(assuming a reasonable salary of $25,000) would be:
net earnings ( after deducting owner's salary)

____________________________________
rate of return 25%

Overview
INDOPOWER
Clearly, firms with lower risk factors are more valuable. Most normal risk businesses use a rate of return factor ranging from 25
percent to 33 percent. The lowest risk factor most buyers would accept for any business ranges from 15 to 20 percent.

Overview
INDOPOWER
Variation 3: Discounted Future Earnings Approach.
This variation of the earnings approach assumes that a dollar earned in the future is worth less than that same dollar today.
Therefore, using this approach, the buyer estimates the company's net income for several years into the future and then discounts
these future earnings back to their present value. The resulting present value is an estimate of the company's worth. The reduced
value of future dollars has nothing to do with inflation. Instead, present value represents the cost of the buyer giving up thc
opportunity to earn a reasonable rate of return by receiving income in the future instead of today. To illustrate the importance of the
time value of money, consider two $1 million sweepstake winners. Rob wins $1 million in a sweepstakes, but he receives it in
$50,000 installments over 20 years. If Rob invested every installment at 15 percent interest, he would have accumulated
$5,890,505.98 at the end of 20 years. Lisa wins $1 million in another sweepstakes, but she collects her winnings in a lump sum. If
Lisa invested her $1 million today at 15 percent. She would have accumulated $16,366,537.39 at the end of twenty years. The
difference in their wealth is the result of the time value of money.
The discounted future earnings approach involves five steps.

Step 1: Project future earnings for five years into the future.
One way is to assume that earnings will grow by a constant amount over the next five years. Perhaps a better method is to
develop three forecasts-an optimistic, a pessimistic, and a most likely for each year and then find a weighted average using the
formula.
The buyer must remember that the farther into the future he forecasts, the less reliable are his estimates .
Step 2: Discount these future earnings at the appropriate present value rate.
The rate the buyer selects should reflect the rate he could earn on a similar risk investment.
Step 3: Estimate the income stream beyond five years.

One technique suggests multiplying the fifth year income by 1/rate of return.
Step 4: Discount the income estimate beyond five years using the present value factor for the sixth year.
Step 5: Compute the total value.
The primary advantage of this technique is that it values a business solely on the basis of its future earning potential, but its
reliability depends on making forecasts of future earnings and on choosing a realistic present value rate. The discounted cash flow
technique is especially well-suited for valuing service businesses (whose asset bases are often small) and for companies
experiencing high growth rates.
Market Approach.
The market (or price/earnings) approach uses the price/earnings ratios of similar businesses to establish the value of a company.
The buyer must use businesses whose stocks are publicly traded to get a meaningful comparison. A company's price/earnings
ratio (or P/E ratio) is the price of one share of its common stock in the market divided by its earnings per share (after deducting
preferred stock dividends). To get a representative P/E ratio, the buyer should average the P/Es of as many similar businesses as
possible. To compute the company's value, the buyer multiplies the average price/earnings ratio by the private company's
estimated earnings.
The biggest advantage of the market approach is its simplicity. But, this method suffers from several disadvantages, including the
following:

Overview
INDOPOWER
Necessary comparisons between publicly traded and privately owned companies. The stock of privately owned companies is
illiquid, and, therefore, the PIE ratio used is often subjective and lower than that of publicly held companies.
Unrepresentative earnings estimates. The private company's net earnings may not realistically reflect its true earning potential. To
minimize taxes, owners usually attempt to keep profits low and rely on fringe benefits to make up the difference.
Finding similar companies for comparison. Often, it is extremely difficult for a buyer to find comparable publicly held companies
when estimating the appropriate P/E ratio.
Applying the after-tax earnings of a private company to determine its value. If a prospective buyer is using an after-tax P/E ratio
from public companies, he also must use after-tax earnings from the private company.
Despite its drawbacks, the market approach is useful as a general guideline to establishing a company's value.

Overview
INDOPOWER
Conclusion
Which of these methods is best for determining the value of a small business? Simply stated, there is no single best method.
Valuing a business is partly an art and partly a science. Using these techniques, a range of values will emerge. Buyers should look
for values that might cluster together and then use their best judgment to determine their offering price.
PT INDONESIA POWER

Balance Sheet Technique

Book Value of Net Worth = Assets minus Liabilities
= $0 $2,006
= ($2,006)
Adjusted Balance Sheet Technique

Adjusted Net Worth = Adjusted Assets minus Liabilities
= $241,506 $2,006
= $239,500
Earnings Approach
Variation 1 - Excess Earnings Method
Step 1 Adjusted tangible net worth equals $241,506 $2,006
minus
equals $239,500
Step 2 Opportunity Costs equals $184,875
Step 3 Estimated net earnings equals $0
Step 4 Extra earning power=estimated net earnings-opportunity cost =
equals ($184,875)
Step 5 Value of intangibles=extra earning power X years of profit figure =
equals ($924,375)
Step 6 Value of business tangible net worth + value of intangibles =
equals ($684,875)
Variation 2 - Capitalized Earnings Approach

net earnings
Value = --------------------------------------------------------------------
rate of return
$0
Value = ---------------------------------------------------------------------
0.25
Value = $0
Variation 3 - Discounted Future Earnings Approach

Step 1 Projected future earnings approach
Year Pessimistic Most Likely Optimistic Weighted Average

2010 $0 $0 $0 $0
2011 $0 $0 $0 $0
2012 $0 $0 $0 $0
2013 $0 $0 $0 $0
2014 $0 $0 $0 $0
Total $0
Step 2 Discount future earnings at the appropriate present value factor

Year Forecasted Earnings X Present Value Factor = Net Present Value
2010 $0 X 0.8000 $0
2011 $0 X 0.6400 $0
2012 $0 X 0.5120 $0
2013 $0 X 0.4096 $0
2014 $0 X 0.3277 $0
Total $0

Step 3 Estimate income stream beyond 4 years
1
Income Stream = Fourth year income X --------------
Rate of Return
= $0 X 4.00
= $0
Step 4 Discount income stream beyond four years (using fifth year present value factor)
Present value of income stream = $0 X 0.1854
equals $0
Step 5 Compute the Total Value

Total Value = Step 2 + Step 4
Total Value = $0 + $0
Total Value = $0
Market Approach
Value = estimated earnings x Representative price-earnings ratio

Value = $0 Times #DIV/0!
Value = #DIV/0!
Summary of Approaches Base Price Base Price + Intangibles

Balance Sheet Technique ($2,006) $129,994
Adjusted Balance Sheet Technique $239,500 $371,500
Earnings Approach Variation 1 ($684,875) ($552,875)
Variation 2 $0 $132,000
Variation 3 $0 $132,000
Market Approach #DIV/0! #DIV/0!
Average #DIV/0! #DIV/0!
Median #DIV/0! #DIV/0!
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Optimal Operating Analysis
Optimal Operating Statement (Potential Maximum Performance) What-if Analysis Reset Spinners Calculator
Potential Maximum Compare with What-if Analysis Current Year

Performance Year Use the spinners and watch the bottom line change.
Medical Manufacturer -$- -%- 2006 Click Here for the Expense / Sales worksheet
1
Gross Sales $0 #DIV/0! $0 89% What-if Sales $0 1
Discounts/Allowances $0 #DIV/0! $0 Discounts/Allowances $0 1
Net Sales $0 #DIV/0! $0 Net Sales $0 0
0
Direct Material Cost #DIV/0! #DIV/0! $0 105% What-if Direct Materials $0 0
Direct Labor Cost #DIV/0! #DIV/0! $0 100% What-if Direct Labor $0
Other Direct Costs #DIV/0! #DIV/0! $0 100% What-if Other Direct $0
Total Cost of Sales #DIV/0! #DIV/0! $0 Total Cost of Sales $0
What-if Projections vs. Current Year
Gross Profit #DIV/0! #DIV/0! $0 Gross Profit $0
0
(0)
Total Fixed Expenses #DIV/0! #DIV/0! $0 100% What-if Fixed Expenses $0
(0)
Total Variable Expenses #DIV/0! #DIV/0! $2,006 100% What-if Variable Expenses $2,006
(0)
Operating expenses #DIV/0! #DIV/0! $0 Operating expenses $2,006 (0)
Interest #DIV/0! #DIV/0! $0 100% Interest $0 (0)
Depreciation #DIV/0! #DIV/0! $0 100% Depreciation $0
Amortization #DIV/0! #DIV/0! $0 100% Amortization $0
Other #DIV/0! #DIV/0! $0 100% Other $0 Maximum Potential
Total expenses #DIV/0! #DIV/0! $0 Total expenses $2,006
Other Income $0
1
Operating income #DIV/0! #DIV/0! $2,006 Operating income ($2,006) 1
Income before tax #DIV/0! #DIV/0! $0 Change in Income before tax ($2,006) 1
0
0
0
1
1
1
Income taxes #DIV/0! #DIV/0! $0 Net Income Income taxes $0 0
Net income #DIV/0! #DIV/0! $0 100.00% Net income ($2,006) 0
0
Return On Ownership #DIV/0! #DIV/0! $0 ($2,006) Return On Ownership ($2,006)
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Comparative Payroll Analysis

Reset Spinners Calculator
Payroll Analysis What-if Payroll Analysis

This analysis uses simple direct proportions. What-if Analysis
Refer to it as a payroll performance snapshot in positive & negative situations. Use the spinners to experiment with the payroll demand.
CURRENT NUMBER OF EMPLOYEES 37 CURRENT NUMBER OF EMPLOYEES 37

CURRENT SALES ANNUALIZED (Weekly X 52 Weeks) $3,399,968 CURRENT SALES ANNUALIZED (Weekly X 52 Weeks) $3,229,970 95%
CURRENT COMPLETED YEAR SALES $0 CURRENT COMPLETED YEAR SALES $0 100%
CURRENT PAYROLL ANNUALIZED (Weekly X 52 Weeks) $350,064 CURRENT PAYROLL ANNUALIZED (Weekly X 52 Weeks) $350,064 100%
PRIOR YEAR PAYROLL $0 PRIOR YEAR PAYROLL $0 100%
SALES VOLUME REQUIRED, AT CURRENT PAYROLL LEVEL, TO PRODUCE PROFITS SALES VOLUME REQUIRED, AT CURRENT PAYROLL LEVEL, TO PRODUCE PROFITS
EQUAL TO THE PREVIOUS YEAR PROFITS-------- #DIV/0! EQUAL TO THE PREVIOUS YEAR PROFITS-------- #DIV/0!
#DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0! #DIV/0!
GROSS PAYROLL ALLOWABLE GROSS PAYROLL ALLOWABLE

UNDER PROJECTED CONDITIONS----- #DIV/0! UNDER PROJECTED CONDITIONS----- #DIV/0!
#DIV/0! #DIV/0! OR #DIV/0! #DIV/0! #DIV/0! OR #DIV/0!
#DIV/0! #DIV/0! #DIV/0! #DIV/0!
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Expense Analysis
Choose a Financial Period and Click The Respective Button

2006
Reset Spinners Calculator
2007
2008 2008
2009 What-if Actual Change
Net Sales $0 $0 $0
Total Expenses $0 $0 $0
Operating Income $0 $0 $0
Type of Actual Change Expense

Expense Expense Value To a Value of: By Difference: By Percentage Percentage Of Actual Expenses
Net Sales $0 $0 $0 0.00% #DIV/0!
Direct Material Cost $0 $0 $0 0.00% #DIV/0!
Direct Labor Cost $0 $0 $0 0.00% #DIV/0!
Other Direct Costs $0 $0 $0 0.00% #DIV/0!
Executive Salaries $0 $0 $0 0.00% #DIV/0!
Advertising $0 $0 $0 0.00% #DIV/0!
Auto & Truck Expenses $0 $0 $0 0.00% #DIV/0!
Depreciation $0 $0 $0 0.00% #DIV/0!
Employee Benefits $0 $0 $0 0.00% #DIV/0!
Home Office Business Expenses $0 $0 $0 0.00% #DIV/0!
Insurance $0 $0 $0 0.00% #DIV/0!

Bank Charges $0 $0 $0 0.00% #DIV/0!
Legal & Professional Services $0 $0 $0 0.00% #DIV/0!
Meals & Entertainment $0 $0 $0 0.00% #DIV/0!
Office Expense $0 $0 $0 0.00% #DIV/0!
Retirement Plans $0 $0 $0 0.00% #DIV/0!
Rent - Equipment $0 $0 $0 0.00% #DIV/0!
Rent - Office & Business Property $0 $0 $0 0.00% #DIV/0!
Repairs $0 $0 $0 0.00% #DIV/0!
Supplies $0 $0 $0 0.00% #DIV/0!
Taxes - Business & Payroll $0 $0 $0 0.00% #DIV/0!
Travel $0 $0 $0 0.00% #DIV/0!
Utilities $0 $0 $0 0.00% #DIV/0!
Office salaries $0 $0 $0 0.00% #DIV/0!
Employee benefits $0 $0 $0 0.00% #DIV/0!
Payroll taxes $0 $0 $0 0.00% #DIV/0!
Sales and Marketing $0 $0 $0 0.00% #DIV/0!
Telephone and telegraph $0 $0 $0 0.00% #DIV/0!
Stationary and office supplies $0 $0 $0 0.00% #DIV/0!
Interest $0 $0 $0 0.00% #DIV/0!
Depreciation $0 $0 $0 0.00% #DIV/0!
Amortization $0 $0 $0 0.00% #DIV/0!
Bad debts $0 $0 $0 0.00% #DIV/0!
Postage $0 $0 $0 0.00% #DIV/0!
Contributions $0 $0 $0 0.00% #DIV/0!
Other Expenses $0 $0 $0 0.00% #DIV/0!
Total All Expenses $0 $0 $0 0% #DIV/0!
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Expense Budget Analysis
Account Budget Actual Difference ($) Difference (%)
Labor
Office 25,000 28,150 3,150 0
Store 15,000 16,260 1,260 0
Salespeople 27,500 23,220 (4,280) (0)
Others 12,000 9,640 (2,360) (0)
Operations
Advertising 48,000 37,260 (10,740) (0)
biaya lain-lain 50,000
Bad Debts 4,000 6,130 2,130 1
Cash Discounts 6,000 9,260 3,260 1
Delivery Costs 3,400 5,150 1,750 1
Depreciation 3,000 2,570 (430) (0)
Dues and Subscriptions 500 370 (130) (0)
Employee Benefits 14,000 12,850 (1,150) (0)
Insurance 6,000 4,520 (1,480) (0)
Interest 450 440 (10) (0)
Legal and Auditing 1,000 1,300 300 0
Maintenance and Repairs 1,500 1,420 (80) (0)
Office Supplies 300 370 70 0
Postage 125 160 35 0
Rent or Mortgage 2,500 3,570 1,070 0
Sales Expenses 1,200 910 (290) (0)
Shipping and Storage 600 890 290 0
Supplies 250 200 (50) (0)
Taxes 2,000 1,320 (680) (0)
Telephone 250 260 10 0
Utilities 450 450 - -
Other 2,000 2,460 460 0
Total Expenses 227,025 169,130 (57,895) (0)

Expense Reduction Impact
$1
INDOPOWER $1
6200 XYZ Drive $1
ABC, California 00000-0000 $0
Phone: (000) 000-0000 $0

FAX: (000) 000-0000 $0
E-mail: someone@xyz.com 2006
2007
2008
2009
Impact
December 11, 2019
Increased Sales Versus Expense Reduction

How Expenses Impact On Profits
Year Year Year Year Total

2006 2007 2008 2009 Impact
A 6% reduction in expenses equals
an additional profit of..................................... $0 $0 $0 $0 $0
OR
at your present net profit of.................................. $0 $0 $0 $0 $0
and your current net sales of.......................... $0 $0 $0 $0 $0
your current total costs are............................. $0 $0 $0 $0 $0
A cost reduction yields a new profit of......... $0 $0 $0 $0 $0
Therefore you would have to build an

additional sales volume of.............................. #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
to equal the expense reduction.
The Conclusion: A reduction in expenses is far more efficient than building additional sales volume.
Try another percentage…………… 6
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COMPANY STOCK VALUATION

Return on incremental investment beginning 3rd Year 20%
Plowback rate beginning 3rd Year 30%
Weighted average cost of capital 12%
Tax rate 30%
Year Year Year Year

2006 2007 2008 2009
Sales $0 $0 $0
Earnings before interest and taxes (EBIT) $0 $0 $0
Taxes on EBIT $0 $0 $0
EBIAT $0 $0 $0
Current assets less marketable securities ($97,994) ($97,993) ($97,992)

Current liabilities $2,006 $2,007 $2,008
Adjusted net working capital ($100,000) ($100,000) ($100,000)
Gross property, plant and equipment $0 $0 $0

Accumulated depreciation $0 $0 $0
Net property, plant and equipment $0 $0 $0
Invested capital ($100,000) ($100,000) ($100,000) ($100,000)
EBIAT $0 $0 $0
Less change in invested capital $0 $0 $0
Free cash flow $0 $0 $0
Terminal value $0
Total $0 $0 $0
PV factor 89.29% 79.72% 71.18%
PV of cash flow and terminal value $0 $0 $0
Cumulative PV $0 $0 $0

Enterprise value $0
Plus marketable securities $100,000
Less short-term debt ($2,006)
Less long-term debt $0
Equity value $97,994
Divide by number of shares outstanding 0
Value per share #DIV/0!
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B/E Adjusted By Reducing Expenses on Existing Sales Volume
Spin an Expense Reduction Here…………… 0% Reset Calculator

Expense
Reduction of 0%
Adjusted Current
Expenses Year
FOR THE PERIOD OF...... 2006 2006
BREAK-EVEN VOLUME (DOLLARS)…………… #DIV/0! #DIV/0!

BREAK-EVEN POINT (PERCENT)……………… #DIV/0! #DIV/0!
DATE OF BREAK-EVEN……………………………… #DIV/0! #DIV/0!
ON SALES VOLUME OF……………………………… $0 $0

WITH VARIABLE COSTS OF…………………… $0 $0
AND FIXED EXPENSES OF……………………… $0 $0
OPERATING PROFIT IS…………………………………………………………… $0 $0
OPERATING PROFIT (%) IS……………………… #DIV/0! #DIV/0!
SALES VOLUME REQUIRED

BEFORE PROFIT BEGINS…………………………… #DIV/0! PER YEAR #DIV/0! PER YEAR
#DIV/0! PER MONTH #DIV/0! PER MONTH
#DIV/0! PER WEEK #DIV/0! PER WEEK

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B/E Adjusted By Reducing Expenses on Existing Sales Volume

#DIV/0! PER DAY #DIV/0! PER DAY
#DIV/0! PER HOUR #DIV/0! PER HOUR
#DIV/0! PER MINUTE #DIV/0! PER MINUTE
Expense Reduction Analysis
1000.00%
900.00%
800.00%
700.00%
600.00%
500.00%
400.00%
300.00%
200.00%
100.00%
0.00%
Adjusted Current
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December 11, 2019
educing Expenses on Existing Sales Volume
Total
Impact of
Reductions
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educing Expenses on Existing Sales Volume

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PT INDONESIA POWER

Break-Even Applied
Leveraging
The concepts of operating leverage and financial leverage are key to an accurate analysis of a company’s value. A firm is
leveraged whenever it incurs either fixed operating costs (operating leverage) or fixed capital costs (financial leverage).
More specifically, a firm’s degree of operating leverage is the extent to which its operations involve fixed operating
expenses such as fixed manufacturing costs, fixed selling costs, and fixed administrative costs.
A firm’s degree of financial leverage is the extent to which that firm finances its assets by borrowing. More specifically,
financial leverage is the extent to which a firm’s Return on Assets exceeds the cost of financing those assets by means of
debt. The firm expects that the leverage acquired by borrowing will bring it earnings that will exceed the fixed costs of the
assets and of the sources of funds. The firm expects that these added earnings will increase the amount of returns to
shareholders.
Today it is almost impossible for a firm to succeed financially without using some form of leverage. Firms
commonly use leverage as a tool to help bolster their financial position and operating condition (for example, their return to
stockholders).
However, with increased leverage comes increased risk. If your company chooses to be highly leveraged, it must be willing
to accept the risk that the downside losses will be as great as its upside profits. This can easily occur if a firm’s sales
volume is not large enough to cover its fixed operating expenses and the required interest payments on its debt.
You can find plenty of examples of this phenomenon in a stack of annual reports from the 1980s. Within that stack you can
find several companies that were highly leveraged. Tracking these firms through the 1990s, you would see trends depicting
peaks and troughs: the positive and the negative impacts of using leverage to operate a business. Many firms were
acquired via "Leveraged buyouts," where the funds needed to make the acquisition were themselves borrowed (hence the
term "leveraged").
The likelihood of experiencing these kinds of swings is one reason that managers, analysts, and stockholders must apply
the concepts of operating and financial leverage to accurately analyze a firm’s overall value and financial health.

Break-Even Applied
Leveraging
An additional concept that is useful in interpreting the risks due to operating leverage and financial leverage is business
risk. Business risk is the inherent uncertainty of doing business. It represents the risk that a company assumes by the
nature of the products it manufactures and sells, its position in the marketplace, its pricing structure—in short, all the
fundamental aspects involved in the creation of profitable revenues. Assuming a higher degree of operating or financial
leverage is seldom risky when the business risk is very low. But if the business risk itself is high, then increasing the degree
of either type of leverage compounds the risk.
Analyzing Operating Leverage

Operating leverage is the extent to which a firm’s operations involve fixed operating expenses. Managers can define the
degree of operating leverage they want the firm to incur, based on the choices they make regarding fixed expenses. They
can, for example, acquire new equipment that increases automation and reduces variable labor expenses. Alternatively,
they can choose to maintain their variable labor expenses. Other things being equal, the more automated equipment a firm
acquires through capital investment, the higher its operating leverage will be.
Case Study: Greeting Cards

You own a small company that prints customized greeting cards. At present, your variable operating costs are $0.03 per
card to print a box of 500 cards, which you sell for $35.00.
One of your employees suggests that, if you purchase a personal computer and a modem, your customers could send their
own designs for greeting cards to you electronically. This would save you the cost of doing the design and layout of the
cards for each order.

Break-Even Applied
Leveraging
You review some recent orders and find that you paid an employee an average of $3.00 per order to do the design and
layout. So your costs and profit per order are as follows:
• Variable $0.03 per card for 500 cards = $15.00

• Fixed design and layout per box = $3.00
• Total cost per box: $18.00
• Operating income per box: $17.00
If you can remove the cost of design and layout, your total costs will drop from $18.00 to $15.00 per order and your
operating income per box will increase from $17.00 to $20.00.
On the other hand, purchasing a computer and a modem will cost $1,400. This will introduce a new, fixed cost to the
production of the cards. You will have to sell 70 boxes of greeting cards (70 boxes * $20.00 profit) to cover the cost of the
equipment—that is, to break even on the investment.
You should base your decision on how dependable your business card orders are. Suppose that you have a steady stream
of around 60 orders per month. In that case, you break even on the investment in a little over a month, and after that you
show an additional $3.00 profit for every order. That added profit is the result of leveraging your capital investment.
Now suppose that your business card orders are not so dependable. Most of your business depends on the patronage of
one large account. When its business is good, and it is hiring and promoting staff, you receive frequent orders from it for
greeting cards. But when its business is not so good, you can go for several months with only a few orders.
If the timing of your investment in the computer coincides with a drop in orders for greeting cards, the computer could sit
idle for several months. There will be little profit to cover its cost, the break-even point will be pushed well into the future,
and you will have lost the opportunity to invest the $1,400 in some other manner, such as advertising. The leverage is
actually working against you.

Break-Even Applied
Leveraging
Of course, there are other considerations you must take into account. You would want to consider how many of your
customers have the inclination and equipment to send their own designs to you, whether they would demand a price break
if they do so, maintenance on the computer, and so on. Business decisions are seldom clear-cut.
So, operating leverage cuts both ways. A good decision can increase your profitability dramatically, once you have broken
even on the fixed cost. Bad timing can cut your profitability dramatically if it takes longer than anticipated to break even on
the investment.
Case Study: Comparing the Degree of Operating Leverage

For a more detailed example, consider three different specialty stores whose operations are identical in all respects, except
for the decisions they have made regarding their variable and fixed expenses:
• Store A has decided to incur the lowest fixed and highest variable costs of the three stores. It has little in the way of
special equipment, and relies heavily on the experience and knowledge of its salespeople. At this store, sales commissions
are relatively high.

Break-Even Applied
Leveraging
Store A
Fixed costs: $20,000.00 Variable costs: $1.50 Unit price: $2.00
Units Sold (000) Sales Fixed costs Variable Costs Total Costs Profits
20 $40,000 $20,000 $30,000 $50,000 ($10,000)
50 $100,000 $20,000 $75,000 $95,000 $5,000
80 $160,000 $20,000 $120,000 $140,000 $20,000
110 $220,000 $20,000 $165,000 $185,000 $35,000
140 $280,000 $20,000 $210,000 $230,000 $50,000
170 $340,000 $20,000 $255,000 $275,000 $65,000
200 $400,000 $20,000 $300,000 $320,000 $80,000
Cost, Sale s and Profit
Store A
$450,000
$400,000
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$0 Units Sold (000)
20 50 80 110 140 170 200
• Store B has decided to incur fixed costs that are higher than that of Store A, but to keep its variable costs lower than Store
A. This store has invested a moderate amount of money in paint-mixing equipment that enables a salesperson to match
paint samples automatically. It believes that reliance on this equipment allows it to hire salespeople who are less
experienced; its sales staff therefore does not earn as much as that at Store A.
Store B
20 $40,000 $40,000 $24,000 $64,000 ($24,000)
50 $100,000 $40,000 $60,000 $100,000 $0
80 $160,000 $40,000 $96,000 $136,000 $24,000
110 $220,000 $40,000 $132,000 $172,000 $48,000

Break-Even Applied
Leveraging
140 $280,000 $40,000 $168,000 $208,000 $72,000
170 $340,000 $40,000 $204,000 $244,000 $96,000
200 $400,000 $40,000 $240,000 $280,000 $120,000
Cost, Sale s and P rofit
Store B
$450,000
$400,000
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$0 Units Sold (000)
20 50 80 110 140 170 200
• Store C has decided to incur the highest fixed and lowest variable costs of the three. It has invested heavily in equipment
that not only matches paint samples exactly, but mixes paints automatically to produce a gallon of matching paint. Its
salespeople need no special knowledge, and receive lower commissions than the sales staffs at Store A and Store B.

Break-Even Applied
Leveraging
Store C
20 $40,000 $60,000 $20,000 $80,000 ($40,000)
50 $100,000 $60,000 $50,000 $110,000 ($10,000)
80 $160,000 $60,000 $80,000 $140,000 $20,000
110 $220,000 $60,000 $110,000 $170,000 $50,000
140 $280,000 $60,000 $140,000 $200,000 $80,000
170 $340,000 $60,000 $170,000 $230,000 $110,000
200 $400,000 $60,000 $200,000 $260,000 $140,000
Cost , Sale s and Profit
Store C
$450,000
$400,000
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$0 Units Sold (000)
20 50 80 110 140 170 200
The examples above display an analysis of each store’s sales and Earnings Before Interest and Taxes (EBIT) for a given
quantity of sales at their existing fixed costs, variable costs, and unit sales rates.
The examples also make some trends evident. These trends are consequences of each store’s decision as to the
relationship between its variable costs and its fixed costs:
Store A, which has the lowest fixed cost and the highest per unit cost, will break even faster than Store B and Store C.
However, once the break-even point has been met and as the level of production increases, Store A’s EBIT will not be as
great as either Store B’s or Store C’s. This is because Store A has the highest per unit sales cost. No matter how many
gallons of paint it sells, it incurs the same, relatively high sales commission on each sale.

Break-Even Applied
Leveraging
Store B, which has fixed costs that fall between Store A and Store B, breaks even slower than Store A but faster than Store
C. Once it reaches its break-even point, it is more profitable than Store A because its unit sales cost is lower than Store A.
However, after breaking even on its paint-matching equipment, Store B is less profitable, in terms of EBIT, than Store C as
sales increase: it pays its sales staff a higher commission than does Store C.
Store C, which has the highest fixed costs and the lowest per unit sales cost, breaks even more slowly than the other two
stores. But after the break-even point has been reached, Store C’s EBIT rises faster than either Store A or Store B because
of its low sales commission rates.

Break-Even Applied
Leveraging
Store A Store B Store C
Fixed costs: $20,000 $40,000 $60,000
Variable costs: $1.50 $1.20 $1.00
Sales price: $2.00 $2.00 $2.00
Store A
Units Sold (000) Sales Fixed costs Variable Costs Profits
20 $40,000 $20,000 $30,000 ($10,000)

50 $100,000 $20,000 $75,000 $5,000
80 $160,000 $20,000 $120,000 $20,000
110 $220,000 $20,000 $165,000 $35,000
140 $280,000 $20,000 $210,000 $50,000
170 $340,000 $20,000 $255,000 $65,000
200 $400,000 $20,000 $300,000 $80,000
Store B
20 $40,000 $40,000 $24,000 ($24,000)
50 $100,000 $40,000 $60,000 $0
80 $160,000 $40,000 $96,000 $24,000
110 $220,000 $40,000 $132,000 $48,000
140 $280,000 $40,000 $168,000 $72,000
170 $340,000 $40,000 $204,000 $96,000
200 $400,000 $40,000 $240,000 $120,000
Store C
20 $40,000 $60,000 $20,000 ($40,000)
50 $100,000 $60,000 $50,000 ($10,000)
80 $160,000 $60,000 $80,000 $20,000
110 $220,000 $60,000 $110,000 $50,000
140 $280,000 $60,000 $140,000 $80,000
170 $340,000 $60,000 $170,000 $110,000
200 $400,000 $60,000 $200,000 $140,000
$150,000
Profits ($)
$100,000
$50,000

$0
($50,000)
20 50 80 110 140 170 200
$150,000
Break-Even Applied
Profits ($)
$100,000
Leveraging
$50,000
$0
($50,000)
20 50 80 110(000)
Units Sold 140 170 200

Break-Even Applied
Leveraging
Degree of Operating Leverage (DOL)
Another way to understand how operating leverage impacts your company’s profitability is by calculating the Degree of
Operating Leverage (DOL):
DOL = Units*(Price-Variable Cost)/(Units*(Price-Variable Cost)-Fixed Cost)

or, equivalently:
DOL = Contribution Margin/(Contribution Margin — Fixed Cost)
Using the data for the three specialty stores, one can calculate the DOL at the point where unit sales are 120,000:
Store A, for example, has a DOL of 1.5 with unit sales of 120,000:
DOL =120,000*($2.00-$1.50)/(120,000*($2.00-$1.50)=$20,000)
DOL = 1.5
These calculations quantify the data shown in example below. The numbers indicate that the EBIT of the companies that
have the greatest operating leverage are also the most sensitive to changes in sales volume.

Fixed costs: $20,000 $40,000 $60,000
Variable costs: $1.50 $1.20 $1.00
Sales price: $2.00 $2.00 $2.00
Units Sold
000 Sales Fixed costs Variable costs EBIT DOL
Store A 120 $240,000 $20,000 $180,000 $40,000 1.50
Store A 200 $400,000 $20,000 $300,000 $80,000 1.25
Store B 120 $240,000 $40,000 $144,000 $56,000 1.71
Store B 200 $400,000 $40,000 $240,000 $120,000 1.33
Store C 120 $240,000 $60,000 $120,000 $60,000 2.00
Store C 200 $400,000 $60,000 $200,000 $140,000 1.43
Profit ($)
$160,000
$140,000
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000 © Copyright, 2009, The Vickers Company, All Rights Reserved.
$0
120000 200000 120000 200000 120000 200000
Store A Store A Store B Store B Store C Store C
Units Sold (000)
Profit ($)
$160,000
$140,000 Break-Even Applied
$120,000
$100,000 Leveraging
$80,000
$60,000
$40,000
$20,000
$0
120000 200000 120000 200000 120000 200000
Units Sold (000)
Each store sells the same number of units: 120,000 or 200,000. Each store sells them for the same price: $2.00 per unit.
But because the stores differ in their fixed and variable costs, they also differ in their 1 BIT. For Store A, a 67% increase in
unit sales from 120,000 to 200,000 results in a (67% * 1.5 DOL) or 100% increase in EBIT. For Store B, a 67% increase in
unit sales results in a (67% * 1.7 DOL) or 114% increase in EBIT. And Store C experiences a (67% * 2.0 DOL) or 133%
increase in EBIT. So, the higher the DOL, the greater the EBIT as unit sales increase.
Expressed in raw dollar amounts, an increase in unit sales from 120,000 to 200,000 means an increase in profits of
$40,000 for Store A, $64,000 for Store B, and $80,000 for Store C.
However, the calculated DOL will be the same on the downside. So for every decrease in sales volume, each firm’s DOL
will cause an unwanted decrease in EBIT corresponding to the desired increase in EBIT (see example below).

Break-Even Applied
Leveraging
Fixed costs: $20,000 $40,000 $60,000
Variable costs: $1.50 $1.20 $1.00
Sales price: $2.00 $2.00 $2.00
Units Sold
(000) Sales Fixed costs Variable costs EBIT DOL
Store A 200 $400,000 $20,000 $300,000 $80,000 1.25
Store A 120 $240,000 $20,000 $180,000 $40,000 1.50
Store B 200 $400,000 $40,000 $240,000 $120,000 1.33
Store B 120 $240,000 $40,000 $144,000 $56,000 1.71
Store C 200 $400,000 $60,000 $200,000 $140,000 1.43
Store C 120 $240,000 $60,000 $120,000 $60,000 2.00
Profit ($)
$160,000
$110,000
$60,000
$10,000
($40,000)
200000 120000 200000 120000 200000 120000
Units Sold (000)
The DOL gives managers a great deal of information for setting operating targets and planning profitability. For example,
you would want to make operating leverage decisions based on your knowledge of how your sales volume fluctuates. If
your company experiences large swings in sales volume throughout the year, it would be much riskier to maintain a high
degree of leverage than it would be if your company has a predictable, steady stream of sales.
Case Study: Hot-dog Sales

HotDog Man is a small business that sells specialty coffee drinks at office buildings. Each morning and afternoon, trucks
arrive at offices’ front entrances, and the office employees purchase hotdogs and drinks. The business is profitable, but
HotDog Man’s offices are located to the north of town, where rents are less expensive, and the principal sales area is south
of town. This means that the trucks must drive cross-town four times each day.

Break-Even Applied
Leveraging
The cost of transportation to and from the sales area, plus the power demands of the trucks’ coffee brewing equipment, are
significant portions of the variable costs. HotDog Man could reduce the amount of driving—and, therefore, the variable
costs—if it moves the offices much closer to the sales area.
HotDog Man presently has fixed costs of $10,000 per month. The lease of a new office, closer to the sales area, would cost
an additional $2,200 per month. This would increase the fixed costs to $12,200 per month (see below).

Break-Even Applied
Leveraging
Units sold per month 20,000 Unit variable costs $0.60
Average unit sales price $2.20 Current fixed costs $10,000
Contribution margin $202,986
DOL 2.45
Fixed Variable
1994 sales month Units Sales costs Costs EBIT
January 6,582 $14,480 $10,000 $3,949 $531
February 11,121 $24,466 $10,000 $6,673 $7,794
March 14,178 $31,192 $10,000 $8,507 $12,685
April 13,692 $30,122 $10,000 $8,215 $11,907
May 11,597 $25,513 $10,000 $6,958 $8,555
June 9,599 $21,118 $10,000 $5,759 $5,358
July 9,913 $21,809 $10,000 $5,948 $5,861
August 10,926 $24,037 $10,000 $6,556 $7,482
September 14,349 $31,568 $10,000 $8,609 $12,958
October 12,965 $28,523 $10,000 $7,779 $10,744
November 6,972 $15,338 $10,000 $4,183 $1,155
December 4,972 $10,938 $10,000 $2,983 ($2,045)
Sum: $82,986
Standard Deviation: $4,963
Although the lease of new offices would increase the fixed costs, a careful estimate of the potential savings in gasoline and
vehicle maintenance indicates that HotDog Man could reduce the variable costs from $0.60 per unit to $0.35 per unit. Total
sales are unlikely to increase as a result of the move, but the savings in variable costs could increase the annual profit from
$82,986 to $88,302. This is a 6.4% growth in profit margin: not an insignificant amount (see below).
Units sold per month 20,000 Unit variable costs $0.35

Average unit sales price $2.20 Current fixed costs $10,000
Additional monthly lease Contribution margin $234,702
payment, new offices: $2,200 DOL 2.66
Projected fixed costs: $12,200
Fixed Variable
1994 sales month Units Sales costs Costs EBIT
January 6,582 $14,480 $12,200 $2,304 ($23.30)
February 11,121 $24,466 $12,200 $3,892 $8,374

Break-Even Applied
Leveraging
March 14,178 $31,192 $12,200 $4,962 $14,029
April 13,692 $30,122 $12,200 $4,792 $13,130
May 11,597 $25,513 $12,200 $4,059 $9,254
June 9,599 $21,118 $12,200 $3,360 $5,558
July 9,913 $21,809 $12,200 $3,470 $6,139
August 10,926 $24,037 $12,200 $3,824 $8,013
September 14,349 $31,568 $12,200 $5,022 $14,346
October 12,965 $28,523 $12,200 $4,538 $11,785
November 6,972 $15,338 $12,200 $2,440 $698
December 4,972 $10,938 $12,200 $1,740 ($3,002)
Sum: $88,302
Standard Deviation: $5,738
But look at the change in the variability of the profit from month to month. From November through January, when it is much
more difficult to lure office workers out into the cold to purchase coffee, HotDog Man barely breaks even. In fact, in
December of 1994, the business lost money.
The example above indicates that by moving some of the expenses from the category of variable costs to that of fixed
costs, HotDog Man increases total annual earnings but the variability of the earnings from month to month also increases.
Although the company earns more during the spring and fall by reducing the variable costs, it loses more during the winter
months because it must continue to meet its higher fixed costs.

Break-Even Applied
Leveraging
This increase in variability is reflected in the month-to-month standard deviation of earnings, which is shown in both
examples directly under the annual sum of earnings. The current cost structure results in a standard deviation of $4,963,
but the projected cost structure has a month-to-month standard deviation of $5,738.
The increase in variability is also reflected in the HotDog Man’s DOL. As shown in both examples, the DOL would increase
from 2.45 to 2.66 as a result of increasing fixed costs and decreasing variable costs. Both the DOL and the business risk
would increase if HotDog Man moved its offices.
If HotDog Man has plenty of money in the bank to meet unexpected expenses, such as major repairs to its trucks or the
trucks’ coffee brewers, then the acceptance of greater fixed costs may make good financial as well as operational sense.
But if HotDog Man’s owners frequently take profits out of the business, so that it has relatively little in the way of resources
to cushion the impact of unexpected expenses, it might be unwise to add to its fixed costs. Where will the money come
from to repair a truck that breaks down at the end of January?
Managers can use the DOL to plan not only their operations, as was done in the HotDog Man case study, but also their net
income and their pricing. It is useful to perform sensitivity analysis around sales volume levels, and around adjustments to
both fixed and variable expenses.
Variability in profit levels, whether measured as EBIT, operating income, or net income does not necessarily increase the
level of business risk as the DOL increases. If the variability is predictable—if the timing and size of the swings can be
forecast with confidence—then a company can anticipate and allow for them in its budgets.
Planning by Using the DOL

In January, for example, the managers of Firms A, B, and C might set out their annual operations and profit targets by
means of the following assumptions:
• We want to increase our sales volume from 120,000 to 200,000.

Break-Even Applied
Leveraging
• Our market research leads us to believe that to sell an additional 80,000 units we must lower our unit sales price from
$2.00 to $1.70.
• Neither total fixed costs nor unit variable costs will change during this year.
Based on these assumptions, the change in net operating income for each firm would be as shown below.
Unit Unit Total Fixed Unit Total Net Increase

Sales Price Sales Costs variable variable operating in net
costs costs income income
Firm A 120,000 $2.00 $240,000 $20,000 $1.50 $180,000 $40,000
200,000 $1.70 $340,000 $20,000 $1.50 $300,000 $20,000 ($20,000)
Firm B 120,000 $2.00 $240,000 $40,000 $1.20 $144,000 $56,000
200,000 $1.70 $340,000 $40,000 $1.20 $240,000 $60,000 $4,000
Firm C 120,000 $2.00 $240,000 $60,000 $1.00 $120,000 $60,000
200,000 $1.70 $340,000 $60,000 $1.00 $200,000 $80,000 $20,000

Break-Even Applied
Leveraging
As before, Firm C has a higher DOL than either Firms A or B. Although the managers of Firm C believe that this works to
their advantage, they should also perform the same analysis on the downside. If, despite reducing their unit sales price,
their total sales remain at 120,000 instead of increasing to 200,000, the reduction in unit price would reduce profits by
$36,000 instead of increasing them by $20,000. It is for this reason that companies with a high degree of leverage must be
confident that their sales volumes will not fall. Otherwise, they run a significant risk of missing their profit objectives.
Performing an analysis of the impacts that leverage can have on a firm’s profitability is essential to a clear picture of the risk
a company has decided to take on. However, the DOL is only one of the indicators that a manager, shareholder, or creditor
uses to measure the value and risk to a firm’s financial health. Another important measure is a company’s degree of
financial leverage.
Analyzing Financial Leverage

Financial leverage is the extent to which a company finances the acquisition of its assets by means of debt: that is, a
company that borrows money to acquire assets engages financial leverage. This type of leverage is a critical component in
the measurement of the financial health and value of a company. It helps managers, analysts, stockholders, as well as long
and short-term creditors distinguish between a firm’s level of business risk and the financial risk that the firm has assumed.
In contrast, financial risk is the additional exposure, above and beyond business risk, that a firm incurs by using financial
leverage: that is, the debt that the firm assumes by financing the acquisition of its assets.
Suppose, for example, that you decide to start a business that offers training classes in the design of business software.
Your business risk consists of factors such as the desirability of the training, the number of people who might want it, the
number of other firms that offer similar training classes, the market share of business software systems that you choose to
focus on, and the quality and price of your service relative to that of your competition.

Break-Even Applied
Leveraging
If you obtain a loan to finance the purchase of computer workstations for your clients to use during training, you have
assumed an additional financial risk, beyond your business risk: the possibility that your firm will be unable to repay that
loan from its earnings.
It is useful to separate business from financial risk to make decisions pertaining to financial leverage. One way to focus on
financial risk is to analyze a firm’s financial structure: that is, the way that the firm has gone about financing its assets. Part
of a company’s overall financial structure is its capital structure. The company’s capital structure is the combination of
various forms of debt and equity that are used to finance its assets.
A thorough understanding of the debt that your company has assumed significantly enhances your ability to make good
decisions about acquiring new debt. As a creditor, it is essential to understand a borrower’s capital structure in order to
measure the risk of making a loan, and to determine whether the interest rate is in line with that risk.
The acquisition of additional debt, of course, changes a company’s degree of financial leverage, and therefore new debt
can have either a beneficial or a detrimental impact on the evaluations made by creditors and stockholders.
Suppose that you can obtain a loan at 9 percent interest to finance the acquisition of new computer workstations. If the
return on the assets represented by the new workstations is 12 percent, you will have leveraged the loan, to your benefit.
But if the return on this equipment turns out to be only 6 percent, the leverage works against you: you will pay more in
interest than you will earn from the asset.

Break-Even Applied
Leveraging
Clearly, financial leverage is an important indicator to investors (should I buy this stock?), to managers (will this decision get
me a promotion or a pink slip?), to stockholders (should I sell or stand pat?) and to creditors (can they repay this loan?).
There are several financial leverage ratios that help you analyze a company’s capital structure. These ratios include the
Debt Ratio and the Times Interest Earned ratio.
The ratios provide managers, analysts, investors, and creditors with useful indications of how financial leverage impacts the
level of financial risk a company has assumed. The ratio information is critical for determining the stability, and even the
solvency, of a company.
Determining the Debt Ratio

The Debt Ratio is the ratio of total debt to total assets. (Another term for the Debt Ratio is the Leverage Factor.) The
example below calculates the Debt Ratio of three firms that are identical in all respects except for the amount of debt that
they have assumed.
Total Total Debt

Debt Assets Ratio
Firm A $0 $10,000 0%
Firm B $2,000 $10,000 20%
Firm C $5,000 $10,000 50%
The Debt Ratio measures the proportion of a firm’s total assets that are financed, both short-term and long-term, by means
of creditors’ funds. Managers, analysts, shareholders, and creditors use the Debt Ratio as one indicator of how much risk a
firm is carrying.
For example, a company’s value is in large measure a function of the value of its assets. If a firm has a high debt ratio, then
a high proportion of its assets has been financed by means of debt. This implies that the company must spend a greater
proportion of its earnings to pay off those debts, instead of reinvesting its earnings in the company.

Break-Even Applied
Leveraging
On the other hand, a company with a low debt ratio has used its equity to acquire assets. This implies that it requires a
smaller proportion of its earnings to retire debt, and the company can make more dollars available for reinvestment and
dividends.
A firm’s debt ratio is also a useful indicator of how well it will weather difficult financial times. For example, if a company with
a high debt ratio suffers significant earnings losses, it will be hard pressed to continue operations and simultaneously pay
off its debts. But a company with a low debt ratio is in a much better position to continue operations if earnings decrease,
because it will not need to use its earnings for debt retirement.
In debt ratio example, Firm C has the highest debt ratio. This implies that if the firm were to experience a recessionary
period, the cash flow it generates may not be sufficient to meet principal and interest payments on the debt acquired. In this
example, the Debt Ratio indicates that Firm C is at the greatest financial risk.
The Equity Ratio is the opposite of the Debt Ratio. It returns the ratio of a firm’s equity to its assets. The higher the Equity
Ratio, the lower a firm’s financial leverage.

Break-Even Applied
Leveraging
Determining the Times Interest Earned Ratio
Times Interest Earned refers to the number of times that interest payments are covered by a firm’s earnings. It is calculated
by dividing the EBIT by interest charges: that is, the income that is available for the payment of interest, divided by the
interest expense. Thus, the Times Interest Earned ratio indicates the extent to which a firm’s current earnings are able to
meet current interest payments out of net operating income or EBIT. The example below shows possible Times Interest
Earned ratios for three firms.
EBIT Interest Times Interest

Earned
Firm A $200,000 $30,000 6.7
Firm B $200,000 $50,000 4.0
Firm C $200,000 $100,000 2.0
The Times Interest Earned ratios in the example indicate that Firm A, because it has relatively low debt, uses a lower
proportion of its earnings to cover interest payments. Firm B covers annual interest payments four times at its current
earnings level, and Firm C covers annual interest payments two times at its current earnings level.
Firm C runs a greater risk of financial difficulty than the other two firms. This is because it must cover interest payments
before applying earnings to any other purpose, such as reinvestment.
Summary
In the business environment operating and financial leverage are important ingredients in determining the success or
demise of many companies. Firms acquire leverage to bolster their financial positions, thus increasing shareholder value.
However, with increased leverage comes increased risk. Managers, analysts, shareholders, and creditors must be very
clear about the implications of the risks associated with a firm’s operating and financial leverage to make investment
decisions. Knowing these implications brings their decisions in line with their desired levels of risk.
PT INDONESIA POWER

INDOPOWER
6200 XYZ Drive
Phone: (000) 000-0000
FAX: (000) 000-0000
December 11, 2019
Breakeven Analysis - Period 1

Revenues Cost of Sales Gross Profit Fixed Exp. Income Taxes Net Income
$0 $0 $0 $0 ($602) ($1,404) Reset Calculator
Breakeven Period 1 Income Chart Period 1

$2,500
$1 $2,000 Sales Revenue

Revenue
$1 $1,500 Cost of Sales

$1
$1 $1,000 Gross Profit
$1 $500
$1 Fixed Expenses
$0 $0
Other Expenses
$0 -$500
$0 Income Before Tax
$0 -$1,000
$0 -$1,500 Income Taxes
-$2,000
-$2,500
Total Sales: $0 What-if Sales: 106% Value of What-if Sales: $0
Total Cost of Sales: $0 What-if Cost of Sales: 131% Value of What-if Cost of Sales: $0
Total Fixed Expenses: $0 What-if Fixed Expenses: 131% Value of What-if Fixed Expenses: $0
Breakeven Percentage: 0.00% Breakeven Dollars $0 Breakeven Date Dec 30
PT INDONESIA POWER

INDOPOWER
6200 XYZ Drive
Phone: (000) 000-0000
FAX: (000) 000-0000
December 11, 2019


$2,500

Revenue

$1
$1 $500
$1 Fixed Expenses
$0 $0
Other Expenses
$0 -$500
$0 -$1,000
-$2,000
-$2,500
PT INDONESIA POWER

INDOPOWER
6200 XYZ Drive
Phone: (000) 000-0000
FAX: (000) 000-0000
December 11, 2019


$2,500

Revenue

$1
$1 $500
$1 Fixed Expenses
$0 $0
Other Expenses
$0 -$500
$0 -$1,000
-$2,000
-$2,500
PT INDONESIA POWER

INDOPOWER
6200 XYZ Drive
Phone: (000) 000-0000
FAX: (000) 000-0000
December 11, 2019


$2,500

Revenue

$1
$1 $500
$1 Fixed Expenses
$0 $0
Other Expenses
$0 -$500
$0 -$1,000
-$2,000
-$2,500
PT INDONESIA POWER

INDOPOWER
6200 XYZ Drive
Phone: (000) 000-0000
FAX: (000) 000-0000
December 11, 2019


$2,500

Revenue

$1
$1 $500
$1 Fixed Expenses
$0 $0
Other Expenses
$0 -$500
$0 -$1,000
-$2,000
-$2,500
Breakeven Percentage: #DIV/0! Breakeven Dollars #DIV/0! Breakeven Date #DIV/0!
PT INDONESIA POWER

INDOPOWER
6200 XYZ Drive
Phone: (000) 000-0000
FAX: (000) 000-0000
December 11, 2019


$2,500

Revenue

$1
$1 $500
$1 Fixed Expenses
$0 $0
Other Expenses
$0 -$500
$0 -$1,000
-$2,000
-$2,500
PT INDONESIA POWER

INDOPOWER
6200 XYZ Drive
Phone: (000) 000-0000
FAX: (000) 000-0000
December 11, 2019

Revenues Cost of Sales Gross Profit Fixed Exp. Income Taxes
$0 $0 $0 $0 ($603) Reset Calculator

$2,500

Revenue

$1
$1 $500
$1 Fixed Expenses
$0 $0
Other Expenses
$0 -$500
$0 -$1,000
-$2,000
-$2,500
PT INDONESIA POWER

INDOPOWER
6200 XYZ Drive
Phone: (000) 000-0000
FAX: (000) 000-0000
December 11, 2019


$2,500

Revenue

$1
$1 $500
$1 Fixed Expenses
$0 $0
Other Expenses
$0 -$500
$0 -$1,000
-$2,000
-$2,500
PT INDONESIA POWER

INDOPOWER
6200 XYZ Drive
Phone: (000) 000-0000
FAX: (000) 000-0000
December 11, 2019


$2,500

Revenue

$1
$1 $500
$1 Fixed Expenses
$0 $0
Other Expenses
$0 -$500
$0 -$1,000
-$2,000
-$2,500
PT INDONESIA POWER

INDOPOWER
6200 XYZ Drive
Phone: (000) 000-0000
FAX: (000) 000-0000
December 11, 2019


$2,500

Revenue

$1
$1 $500
$1 Fixed Expenses
$0 $0
Other Expenses
$0 -$500
$0 -$1,000
-$2,000
-$2,500
PT INDONESIA POWER

INDOPOWER
6200 XYZ Drive
Phone: (000) 000-0000
FAX: (000) 000-0000
December 11, 2019


$2,500

Revenue

$1
$1 $500
$1 Fixed Expenses
$0 $0
Other Expenses
$0 -$500
$0 -$1,000
-$2,000
-$2,500
PT INDONESIA POWER

INDOPOWER
6200 XYZ Drive
Phone: (000) 000-0000
FAX: (000) 000-0000
December 11, 2019


$2,500

Revenue

$1
$1 $500
$1 Fixed Expenses
$0 $0
Other Expenses
$0 -$500
$0 -$1,000
-$2,000
-$2,500
PT INDONESIA POWER

$2,500
$2,000
$1,500
$1,000
$500
$0
Revenue Cost of Sales Gros s Profit Total Expenses Profit Ownership

Sales Performance
Sales Performance
$1
$1
$1
$1
$1
$1
$0
$0
$0
$0
$0
2006 2007 2008 2009

Total Expenses
Total Expenses
$1
$1
$1
$1
$1
$1
$0
$0
$0
$0
$0
2006 2007 2008 2009

Labor Expenses
Labor Expenses
$1
$1
$1
$1
$1
$1
$0
$0
$0
$0
$0
2006 2007 2008 2009

Materials Cost
Materials Cost
$1
$1
$1
$1
$1
$1
$0
$0
$0
$0
$0
2006 2007 2008 2009

2009
2008.5
2008
2007.5
2007
2006.5
2006
2005.5
2005
2004.5
2006 2007 2008 2009

$1
$1
$1
$1
$1
$1
$0
$0
$0
$0
$0
1 2 3 4

Profit
Profit
2009
2008.5
2008
2007.5
2007
2006.5
2006
2005.5
2005
2004.5
2006 2007 2008 2009

Return On Ownership
Return On Ownership
10
0
2006 2007 2008 2009

Comparative Trend Analysis
Category Actual Industry Variance Trend
Services - Certified Public Accountants $ % $ % $ % Your Business vs.
45 Your Industry
Total Revenue (Sales) $2,010,000 100.00% $2,010,000 100.00% $0.00 0.00% N/A
Total Expenses as % of Revenue $1,663,353 82.75% $1,097,460 54.60% $565,893 28.15% Negative Trend
Net Income to Owner as % of Revenue $346,647 17.25% $912,540 45.40% ($565,893) -28.15% Negative Trend
Detail of Expenses (as % of Revenue)

Cost of Goods Sold $945,000 47.01% $16,080 0.80% $928,920 46.21% Negative Trend
Salaries & Wages $190,000 9.45% $293,460 14.60% ($103,460) -5.15% Positive Trend
Advertising $50,000 2.49% $14,070 0.70% $35,930 1.79% Negative Trend
Auto & Truck Expenses $30,000 1.49% $68,340 3.40% ($38,340) -1.91% Positive Trend
Depreciation $5,000 0.25% $60,300 3.00% ($55,300) -2.75% Positive Trend
Employee Benefits $3,000 0.15% $18,090 0.90% ($15,090) -0.75% Positive Trend
Home Office Business Expenses $1,000 0.05% $24,120 1.20% ($23,120) -1.15% Positive Trend
Insurance $1,000 0.05% $34,170 1.70% ($33,170) -1.65% Positive Trend
Interest Expense $2,133 0.11% $20,100 1.00% ($17,967) -0.89% Positive Trend
Legal & Professional Services $11,000 0.55% $24,120 1.20% ($13,120) -0.65% Positive Trend
Meals & Entertainment $4,000 0.20% $12,060 0.60% ($8,060) -0.40% Positive Trend
Office Expense $6,000 0.30% $60,300 3.00% ($54,300) -2.70% Positive Trend
Retirement Plans $1,000 0.05% $16,080 0.80% ($15,080) -0.75% Positive Trend
Rent - Equipment $3,000 0.15% $18,090 0.90% ($15,090) -0.75% Positive Trend
Rent - Office & Business Property $1,000 0.05% $70,350 3.50% ($69,350) -3.45% Positive Trend
Repairs $1,000 0.05% $14,070 0.70% ($13,070) -0.65% Positive Trend
Supplies $1,000 0.05% $36,180 1.80% ($35,180) -1.75% Positive Trend
Taxes - Business & Payroll $1,000 0.05% $32,160 1.60% ($31,160) -1.55% Positive Trend
Travel $6,000 0.30% $16,080 0.80% ($10,080) -0.50% Positive Trend
Utilities $0 0.00% $52,260 2.60% $0 0.00% Positive Trend
Other Expenses $0 0.00% $196,980 9.80% $0 0.00% Positive Trend
Total Expenses as % of Revenue $1,262,133 62.79% $1,097,460 54.60% $164,673 8.19% Negative Trend
Number of Positives 19
PT INDONESIA POWER Number of Negatives 5

Current
$2,500,000
$2,000,000
Total Revenue (Sales)

$1,500,000
Total Expens es as % of
Revenue
$1,000,000 Net Income to Owner as
% of Revenue
$500,000
$0
Industry
$2,500,000
$2,000,000
Total Revenue (Sales)

$1,500,000
Total Expens es as % of
Revenue
$1,000,000 Net Income to Owner as
% of Revenue
$500,000
$0

Cash Flow Sensitivity Analysis
% change in assumptions 5.0%
Most Likely Pessimistic Optimistic

Beginning Cash Balance $12,000 $12,000 $12,000
Cash Inflows (Income):
Accounts Receivable Collections $264,600 251,370 277,830
Loan Proceeds $0
Cash Sales $30,000 28,500 31,500
Other:
Enter description here $0
Total Cash Inflows $294,600 $279,870 $309,330
Available Cash Balance $306,600 $291,870 $321,330
Cash Outflows (Expenses):
Advertising $15,456 $16,229 $14,683
Bank Service Charges $0
Cash Purchases $893 $938 $848
Contingencies $0
Credit Card Fees $0
Delivery Charges $0
Deposits $0
Dues & Subscriptions $0
Employee Benefits $7,022 $7,373 $6,671
Health Insurance $0
Insurance $2,276 $2,390 $2,162
Interest $0
Inventory Purchases $0
Lease Payments $0
Licenses & Permits $0
Miscellaneous $70 $74 $67
Office Supplies $2,113 $2,219 $2,007
Payroll $30,000 $31,500 $28,500
Payroll Taxes $2,341 $2,458 $2,224
Professional Fees $0
Rent or Lease $2,000 $2,100 $1,900
Repairs & Maintenance $1,301 $1,366 $1,236
Sales tax $0
Services $0

Signs $0
Supplies $0
Taxes & Licenses $0
Utilities & Telephone $850 $893 $808

Other:
Subtotal $64,322 $67,538 $61,106
Other Cash Out Flows:
Capital Purchases $0
Building Construction $0
Decorating $0
Fixtures & Equipment $0
Install Fixtures & Equip. $0
Remodeling $0
Lease Payments $0
Loan Principal $0
Owner's Draw $6,000 $6,300 $5,700
Other:
Subtotal $6,000 $6,300 $5,700
Total Cash Outflows $70,322 $73,838 $66,806
Ending Cash Balance $236,278 $218,032 $254,524

Cash Flow Sensitivity Analysis - Aged AR
100% Total Credit Sales $270,000

60% 30 Days $162,000
30% 60 Days $81,000
5% 90 Days $13,500
4% 120 Days $10,800
1% Unrecoverable ($2,700)
Total Projected Collections $264,600
Most Likely Pessimistic Optimistic

Beginning Cash Balance $12,000 $12,000 $12,000
Cash Inflows (Income):
Accounts Receivable Collections $264,600 251,370 277,830
Loan Proceeds $0
Cash Sales $30,000 28,500 31,500
Other:
Total Cash Inflows $294,600 $279,870 $309,330
Available Cash Balance $306,600 $291,870 $321,330
Cash Outflows (Expenses):
Advertising $15,456 $16,229 $14,683
Bank Service Charges $0
Cash Purchases $893 $938 $848
Contingencies $0
Credit Card Fees $0
Delivery Charges $0
Deposits $0
Dues & Subscriptions $0
Employee Benefits $7,022 $7,373 $6,671
Health Insurance $0
Insurance $2,276 $2,390 $2,162
Interest $0
Inventory Purchases $0
Lease Payments $0

Licenses & Permits $0

Miscellaneous $70 $74 $67
Office Supplies $2,113 $2,219 $2,007
Payroll $30,000 $31,500 $28,500
Payroll Taxes $2,341 $2,458 $2,224
Professional Fees $0
Rent or Lease $2,000 $2,100 $1,900
Repairs & Maintenance $1,301 $1,366 $1,236
Sales tax $0
Services $0
Signs $0
Supplies $0
Taxes & Licenses $0
Utilities & Telephone $850 $893 $808

Other:
Subtotal $64,322 $67,538 $61,106
Other Cash Out Flows:
Capital Purchases $0
Building Construction $0
Decorating $0
Fixtures & Equipment $0
Install Fixtures & Equip. $0
Remodeling $0
Lease Payments $0
Loan Principal $0
Owner's Draw $6,000 $6,300 $5,700
Other:
Subtotal $6,000 $6,300 $5,700
Total Cash Outflows $70,322 $73,838 $66,806
Ending Cash Balance $236,278 $218,032 $254,524

Return-on-Investment (ROI) Analysis
Cash flow and ROI statement
YEAR
BENEFIT DRIVERS
0 1 2 3
Greater margin driven by higher production capacity $500,000 $1,000,000 $1,250,000
Improved cycle time benefits:
Reduced energy cost due to less running time 125,000 125,000 125,000
Reduced labor cost due to less running time 500,000 500,000 500,000
Fewer accidents, resulting in less workers' compensation 100,000 100,000 100,000
Improved quality benefits:
Fewer defects, resulting in less rework 250,000 300,000 300,000
Fewer customer returns, resulting in less reprocessing costs 50,000 75,000 75,000
Reduced time spent handling customer complaints 50,000 75,000 75,000
<Benefit driver>
<Benefit driver>
<Benefit driver>
<Benefit driver>
Total annual benefits $1,575,000 $2,175,000 $2,425,000
Implementation filter 85% 90% 95%
Total benefits realized $1,338,750 $1,957,500 $2,303,750
Costs Year 0 Year 1 Year 2 Year 3

Total $1,650,000 $125,000 $125,000 $125,000
Benefits Year 0 Year 1 Year 2 Year 3

Annual benefit flow ($1,650,000) $1,213,750 $1,832,500 $2,178,750
Cumulative benefit flow (1,650,000) (436,250) 1,396,250 3,575,000
Discounted benefit flow Year 0 Year 1 Year 2 Year 3

Discounted costs $1,650,000 $108,696 $94,518 $82,190
Discounted benefits 0 1,164,130 1,480,151 1,514,753
Total discounted benefit flow (1,650,000) 1,055,435 1,385,633 1,432,563
Total cumulative discounted benefit flow (1,650,000) (594,565) 791,068 2,223,632
Initial investment Year 0 Year 1 Year 2 Year 3

Initial investment $1,200,000 $0 $0 $0
Implementation costs 400,000 0 0 0
Ongoing support costs 0 100,000 100,000 100,000
Training costs 50,000 25,000 25,000 25,000
Other costs 0 0 0 0
Total costs $1,650,000 $125,000 $125,000 $125,000

ROI measures
Cost of capital 15%
Net present value $2,223,632
Return on investment 66% 143% 215%
Payback (in years) 1.24
Return on investment
250%
200%
150%
100%
50%
0%
Year 1 Year 2 Year 3

Small Business Headcount and Payroll Analysis
Annual
HEADCOUNT SUMMARY Q1 Q2 Q3 Q4 Annual total Q1 cost
salary
Executive
Owner 1.00 1.00 1.00 1.00 4.00 $100,000 $25,000
Chief financial officer 1.00 1.00 1.00 1.00 4.00 50,000 12,500
Open 0.00 0
Total 2.00 2.00 2.00 2.00 8.00 $37,500
Finance
Financial Analyst 1.00 1.00 1.00 1.00 4.00 $30,000 $7,500
Credit Analyst 1.00 1.00 1.00 1.00 4.00 25,000 6,250
Open 0.00 0
Total 2.00 2.00 2.00 2.00 8.00 $13,750
Human Resources
Director 1.00 1.00 1.00 1.00 4.00 $40,000 $10,000
Open 0.00 0
Open 0.00 0
Total 1.00 1.00 1.00 1.00 4.00 $10,000
Information Technology
Director 1.00 1.00 1.00 1.00 4.00 $40,000 $10,000
Open 0.00 0
Total 1.00 1.00 1.00 1.00 4.00 $10,000
Accounting
Controller 1.00 1.00 1.00 1.00 4.00 $30,000 $7,500
Open 0.00 0
Total 1.00 1.00 1.00 1.00 4.00 $7,500
Sales
Sales Manager 1.00 1.00 1.00 1.00 4.00 $40,000 $10,000
Sales Representatives 2.00 2.00 2.00 2.00 8.00 59,000 29,500
Open 0.00 0
Total 3.00 3.00 3.00 3.00 12.00 $39,500

Operations
Director 1.00 1.00 1.00 1.00 4.00 $30,000 $7,500
Open 0.00 0
Total 1.00 1.00 1.00 1.00 4.00 $7,500
Marketing
Director 1.00 1.00 1.00 1.00 4.00 $35,000 $8,750
Open 0.00 0
Total 1.00 1.00 1.00 1.00 0.00 $8,750
Corporate totals 12.00 12.00 12.00 12.00 44.00 $134,500
SUMMARY DATA BY DEPARTMENT

Total number Salary + Variable
Department Total salary Benefits
of employees benefits compensation %
Executive 8 $150,000 $37,500 $187,500 15.0%
Finance 8 55,000 13,750 68,750 6.0%
Human Resources 4 40,000 10,000 50,000 5.0%
Information Technology 4 40,000 10,000 50,000 5.0%
Accounting 4 30,000 7,500 37,500 5.0%
Sales 12 158,000 39,500 197,500 20.0%
Operations 4 30,000 7,500 37,500 10.0%
Marketing 0 35,000 8,750 43,750 5.0%
Corporate Totals 44 $538,000 $134,500 $672,500
Total number
Department % of total Total comp % of total
of employees
Executive 8 18.2% $230,000 30.1%
Finance 8 18.2% 77,050 10.1%
Human Resources 4 9.1% 52,000 6.8%
Information Technology 4 9.1% 52,000 6.8% Quarterly metrics:
Accounting 4 9.1% 39,000 5.1%
Sales 12 27.3% 229,100 29.9% Q1
Operations 4 9.1% 40,500 5.3% Q2
Marketing 0 0.0% 45,500 5.9% Q3
Q4
Corporate Totals 44 100.0% $765,150 100.0%

KEY MODEL INPUTS

Fringe benefit percentage 25.0% Quarterly Analysis of Salary and Benefits
Fiscal revenue $5,256,000
Current Net Profit $157,680 $180,000
$160,000
HEADCOUNT ANALYSIS $140,000
Current Headcount 44
$120,000
Current Net Profit $157,680
Projected Net profit $165,874 $100,000
Surplus $8,194 $80,000
Headcount Needed 44.50 $60,000
Under-staffed at Projected Net Profit (0.50)
$40,000
$20,000
Key metrics:
Revenue/employee $119,455 $0
Total compensation/employee $17,390 Q1 Q2 Q3 Q4
Salary Benefits Salary + benefits
Net profit/employee $3,584

Q2 cost Q3 cost Q4 cost Annual cost
$25,000 $25,000 $25,000 $100,000

12,500 12,500 12,500 50,000
0 0 0 0
$37,500 $37,500 $37,500 $150,000
$7,500 $7,500 $7,500 $30,000

6,250 6,250 6,250 25,000
0 0 0 0
$13,750 $13,750 $13,750 $55,000
$10,000 $10,000 $10,000 $40,000

0 0 0 0
0 0 0 0
$10,000 $10,000 $10,000 $40,000
$10,000 $10,000 $10,000 $40,000

0 0 0 0
$10,000 $10,000 $10,000 $40,000
$7,500 $7,500 $7,500 $30,000

0 0 0 0
$7,500 $7,500 $7,500 $30,000
$10,000 $10,000 $10,000 $40,000

29,500 29,500 29,500 118,000
0 0 0 0
$39,500 $39,500 $39,500 $158,000

$7,500 $7,500 $7,500 $30,000
0 0 0 0
$7,500 $7,500 $7,500 $30,000
$8,750 $8,750 $8,750 $35,000

0 0 0 0
$8,750 $8,750 $8,750 $35,000
$134,500 $134,500 $134,500 $538,000
Variable Stock-based
Total compensation
pay compensation
$22,500 $20,000 $230,000
3,300.00 5,000.00 77,050.00
2,000.00 0.00 52,000.00
2,000.00 0.00 52,000.00
1,500.00 0.00 39,000.00
31,600.00 0.00 229,100.00
3,000.00 0.00 40,500.00
1,750.00 0.00 45,500.00
$67,650 $25,000 $765,150
Quarterly metrics:
$134,500 $33,625 $168,125
134,500 33,625 168,125
134,500 33,625 168,125
134,500 33,625 168,125
$538,000 $134,500 $672,500

Quarterly Analysis of Salary and Benefits
Q1 Q2 Q3 Q4

Corporate Headcount and Payroll Analysis
Annual
HEADCOUNT SUMMARY Q1 Q2 Q3 Q4 Annual total Q1 cost
salary
Executive
Chief executive officer 1.00 1.00 1.00 1.00 4.00 $300,000 $75,000
Chief financial officer 1.00 1.00 1.00 1.00 4.00 250,000 62,500
Chief operating officer 1.00 1.00 1.00 1.00 4.00 225,000 56,250
Chief information officer 1.00 1.00 1.00 1.00 4.00 225,000 56,250
President 1.00 1.00 1.00 1.00 4.00 240,000 60,000
0.00 0
Total 5.00 5.00 5.00 5.00 20.00 $310,000
Finance
Vice president 1.00 1.00 1.00 1.00 4.00 $200,000 $50,000
Financial planning director 1.00 1.00 1.00 1.00 4.00 125,000 31,250
Financial analyst 2.00 2.00 2.00 2.00 8.00 100,000 50,000
Credit analyst 1.00 1.00 1.00 1.00 4.00 70,000 17,500
Advisor 1.00 1.00 1.00 1.00 4.00 85,000 21,250
0.00 0
Total 6.00 6.00 6.00 6.00 24.00 $170,000
Human Resources
Vice president 1.00 1.00 1.00 1.00 4.00 $140,000 $35,000
Director 1.00 1.00 1.00 1.00 4.00 100,000 25,000
Senior human resource representative 2.00 2.00 2.00 2.00 8.00 80,000 40,000
Benefits coordinator 1.00 1.00 1.00 1.00 4.00 75,000 18,750
Compensation manager 2.00 2.00 2.00 2.00 8.00 75,000 37,500
Human resource generalist 2.00 2.00 2.00 2.00 8.00 65,000 32,500
Payroll 1.00 1.00 1.00 1.00 4.00 65,000 16,250
Trainer 0.00 65,000 0
Recruiter 0.00 65,000 0
0.00 0
Total 10.00 10.00 10.00 10.00 40.00 $205,000
Information Technology
Vice president 1.00 1.00 1.00 1.00 4.00 $140,000 $35,000
Director 1.00 1.00 1.00 1.00 4.00 110,000 27,500
Systems engineer 2.00 2.00 2.00 2.00 8.00 90,000 45,000
Systems analyst 1.00 1.00 1.00 1.00 4.00 90,000 22,500
Technician 1.00 1.00 2.00 2.00 6.00 80,000 20,000

Support 2.00 2.00 2.00 2.00 8.00 75,000 37,500
Architect 1.00 1.00 1.00 1.00 4.00 80,000 20,000
Programmer 1.00 1.00 1.00 1.00 4.00 80,000 20,000
0.00 0
Total 10.00 10.00 11.00 11.00 42.00 $227,500
Accounting
Vice president 1.00 1.00 1.00 1.00 4.00 $130,000 $32,500
Controller 1.00 1.00 1.00 1.00 4.00 95,000 23,750
Accounting manager 1.00 1.00 1.00 1.00 4.00 75,000 18,750
Accounts receivable 1.00 1.00 1.00 1.00 4.00 55,000 13,750
Accounts payable 1.00 1.00 1.00 1.00 4.00 55,000 13,750
Treasury 1.00 1.00 1.00 1.00 4.00 75,000 18,750
General accountant 1.00 1.00 1.00 1.00 4.00 55,000 13,750
0.00 0
Total 7.00 7.00 7.00 7.00 28.00 $135,000
Sales
Vice president 1.00 1.00 1.00 1.00 4.00 $120,000 $30,000
Regional director 2.00 2.00 2.00 2.00 8.00 100,000 50,000
Business development 1.00 1.00 1.00 1.00 4.00 90,000 22,500
Direct sales representative 4.00 4.00 4.00 4.00 16.00 90,000 90,000
Inside sales 1.00 1.00 1.00 1.00 4.00 75,000 18,750
Sales operations 1.00 1.00 1.00 1.00 4.00 75,000 18,750
Channel sales representative 1.00 1.00 1.00 1.00 4.00 80,000 20,000
0.00 0
Total 11.00 11.00 11.00 11.00 44.00 $250,000

Operations
Vice president 1.00 1.00 1.00 1.00 4.00 $150,000 $37,500
Director 1.00 1.00 1.00 1.00 4.00 100,000 25,000
Manager 1.00 1.00 1.00 1.00 4.00 85,000 21,250
Floor manager 5.00 5.00 5.00 5.00 20.00 65,000 81,250
Assistant 1.00 1.00 1.00 1.00 4.00 45,000 11,250
0.00 0
Total 9.00 9.00 9.00 9.00 36.00 $176,250
Marketing
Vice president 1.00 1.00 1.00 1.00 4.00 $135,000 $33,750
Director 1.00 1.00 1.00 1.00 4.00 105,000 26,250
Product manager 1.00 1.00 1.00 1.00 4.00 90,000 22,500
Market research 1.00 1.00 1.00 1.00 4.00 75,000 18,750
Market analyst 1.00 1.00 1.00 1.00 4.00 75,000 18,750
Product manager 1.00 1.00 1.00 1.00 4.00 90,000 22,500
Merchandiser 1.00 1.00 1.00 1.00 4.00 70,000 17,500
Assistant 1.00 1.00 1.00 1.00 4.00 50,000 12,500
0.00 0
Total 8.00 8.00 8.00 8.00 20.00 $172,500
Corporate totals 66.00 66.00 67.00 67.00 254.00 $1,646,250
SUMMARY DATA BY DEPARTMENT

Total number Salary + Variable
Department Total salary Benefits
of employees benefits compensation %
Executive 20 $1,240,000 $310,000 $1,550,000 15.0%
Finance 24 680,000 170,000 850,000 10.0%
Human Resources 40 835,000 208,750 1,043,750 5.0%
Information Technology 42 950,000 237,500 1,187,500 5.0%
Accounting 28 540,000 135,000 675,000 5.0%
Sales 44 1,000,000 250,000 1,250,000 40.0%
Operations 36 705,000 176,250 881,250 10.0%
Marketing 20 690,000 172,500 862,500 5.0%
Corporate Totals 254 $6,640,000 $1,660,000 $8,300,000
Total number
Department % of total Total comp % of total
of employees

Executive 20 7.9% $1,936,000 20.5%
Finance 24 9.4% 968,000 10.3%
Human Resources 40 15.7% 1,085,500 11.5%
Information Technology 42 16.5% 1,235,000 13.1% Quarterly metrics:
Accounting 28 11.0% 702,000 7.4%
Sales 44 17.3% 1,650,000 17.5% Q1
Operations 36 14.2% 951,750 10.1% Q2
Marketing 20 7.9% 897,000 9.5% Q3
Q4
Corporate Totals 254 100.0% $9,425,250 100.0%
KEY MODEL INPUTS

Fringe benefit percentage 25.0% Quarterly Analysis of Salary and Benefits
Fiscal revenue $15,256,000
Current Net Profit $457,680 $2,500,000
HEADCOUNT ANALYSIS $2,000,000

Current Headcount 254
Current Net Profit $457,680 $1,500,000
Projected Net profit $490,000
Surplus $32,320
$1,000,000
Headcount Needed 254.90
Under-staffed at Projected Net Profit (1.00)
$500,000
Key metrics:
Revenue/employee $60,063 $0
Total compensation/employee $37,107 Q1 Q2 Q3 Q4
Net profit/employee $1,802

Q2 cost Q3 cost Q4 cost Annual cost
$75,000 $75,000 $75,000 $300,000

62,500 62,500 62,500 250,000
56,250 56,250 56,250 225,000
56,250 56,250 56,250 225,000
60,000 60,000 60,000 240,000
0 0 0 0
$310,000 $310,000 $310,000 $1,240,000
$50,000 $50,000 $50,000 $200,000

31,250 31,250 31,250 125,000
50,000 50,000 50,000 200,000
17,500 17,500 17,500 70,000
21,250 21,250 21,250 85,000
0 0 0 0
$170,000 $170,000 $170,000 $680,000
$35,000 $35,000 $35,000 $140,000

25,000 25,000 25,000 100,000
40,000 40,000 40,000 160,000
18,750 18,750 18,750 75,000
37,500 37,500 37,500 150,000
37,500 37,500 37,500 145,000
16,250 16,250 16,250 65,000
0 0 0 0
0 0 0 0
0 0 0 0
$210,000 $210,000 $210,000 $835,000
$35,000 $35,000 $35,000 $140,000

27,500 27,500 27,500 110,000
45,000 45,000 45,000 180,000
22,500 22,500 22,500 90,000
20,000 40,000 40,000 120,000

37,500 37,500 37,500 150,000
20,000 20,000 20,000 80,000
20,000 20,000 20,000 80,000
0 0 0 0
$227,500 $247,500 $247,500 $950,000
$32,500 $32,500 $32,500 $130,000

23,750 23,750 23,750 95,000
18,750 18,750 18,750 75,000
13,750 13,750 13,750 55,000
13,750 13,750 13,750 55,000
18,750 18,750 18,750 75,000
13,750 13,750 13,750 55,000
0 0 0 0
$135,000 $135,000 $135,000 $540,000
$30,000 $30,000 $30,000 $120,000

50,000 50,000 50,000 200,000
22,500 22,500 22,500 90,000
90,000 90,000 90,000 360,000
18,750 18,750 18,750 75,000
18,750 18,750 18,750 75,000
20,000 20,000 20,000 80,000
0 0 0 0
$250,000 $250,000 $250,000 $1,000,000

$37,500 $37,500 $37,500 $150,000
25,000 25,000 25,000 100,000
21,250 21,250 21,250 85,000
81,250 81,250 81,250 325,000
11,250 11,250 11,250 45,000
0 0 0 0
$176,250 $176,250 $176,250 $705,000
$33,750 $33,750 $33,750 $135,000

26,250 26,250 26,250 105,000
22,500 22,500 22,500 90,000
18,750 18,750 18,750 75,000
18,750 18,750 18,750 75,000
22,500 22,500 22,500 90,000
17,500 17,500 17,500 70,000
12,500 12,500 12,500 50,000
0 0 0 0
$172,500 $172,500 $172,500 $690,000
$1,651,250 $1,671,250 $1,671,250 $6,640,000
Variable Stock-based
Total compensation
pay compensation
$186,000 $200,000 $1,936,000
68,000.00 50,000.00 968,000.00
41,750.00 0.00 1,085,500.00
47,500.00 0.00 1,235,000.00
27,000.00 0.00 702,000.00
400,000.00 0.00 1,650,000.00
70,500.00 0.00 951,750.00
34,500.00 0.00 897,000.00
$875,250 $250,000 $9,425,250

Quarterly metrics:
$1,646,250 $411,563 $2,057,813
1,651,250 412,813 2,064,063
1,671,250 417,813 2,089,063
1,671,250 417,813 2,089,063
$6,640,000 $1,660,000 $8,300,000
Quarterly Analysis of Salary and Benefits
Q1 Q2 Q3 Q4

Additional Information and Free Excel Training
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Comparative Balance Sheet - 12 Periods

Year Year Year Year Year Year Year

© Copyright, 2007, The Vickers Company, All Rights Reserved.

© Copyright, 2007, The Vickers Company, All Rights Reserved.

Gross Profit $1,215,000 $1,628,650 $1,757,500 $2,289,987

Variable Expenses 2006 2007 2008 2009

2006 2007 2008 2009

Operating income $656,240 $1,044,863 $1,109,658 $1,617,279

Other income and expenses 2006 2007 2008 2009

Income before tax $686,240 $1,075,763 $1,141,485 $1,660,061

Income taxes $205,872 $322,729 $342,445 $498,018

Net income $480,368 $753,034 $799,039 $1,162,043

Return On Ownership $670,368 $944,034 $994,039 $1,357,043

© Copyright, 2007, The Vickers Company, All Rights Reserved.

Fixed Assets 2006 2007 2008 2009

Intangible Assets 2006 2007 2008 2009

Other assets $25,000 $25,750 $26,523 $27,318

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities 2006 2007 2008 2009

Non-Current Liabilities 2006 2007 2008 2009

Total Liabilities $1,717,200 $1,773,680 $1,829,594 $1,872,718

Stockholders' Equity 2006 2007 2008 2009

Total Liabilities and Equity $4,167,200 $4,094,180 $5,467,899 $6,172,246

Amount sheet is out-of-balance $0 $0 $0 $0

© Copyright, 2007, The Vickers Company, All Rights Reserved.

Financing Data (0 on) Depreciation Capital Current Portion LT Portion Rate

Gross profit $1,215,000 $1,628,650 $1,757,500 $2,289,987 $6,891,136

Operating income $1,215,000 $1,628,650 $1,757,500 $2,289,987 $6,891,136

Other income and expenses

Income before tax $686,240 $1,075,763 $1,141,485 $1,660,061 $4,563,549

Income taxes $205,872 $322,729 $342,445 $498,018 $1,369,065

Net income $480,368 $753,034 $799,039 $1,162,043 $3,194,484

Retained earnings-beginning $1,400,000 $1,400,000 $1,542,000 $1,685,260 $1,400,000

Retained earnings-ending $1,880,368 $2,153,034 $2,341,039 $2,847,303 $4,594,484

Detailed Supporting Information

Depreciation: Enter the numbers of years.

© Copyright, 2007, The Vickers Company, All Rights Reserved.

Other assets $25,000 $25,000 $25,750 $26,523 $27,318

Total Liabilities $1,706,000 $1,717,200 $1,773,680 $1,829,594 $1,872,718

Total Liabilities and Equity $3,266,000 $4,167,200 $4,094,180 $5,467,899 $6,172,246

"C" Corporation (Y/N) Y

© Copyright, 2007, The Vickers Company, All Rights Reserved.

© Copyright, 2007, The Vickers Company, All Rights Reserved.

© Copyright, 2007, The Vickers Company, All Rights Reserved.

© Copyright, 2007, The Vickers Company, All Rights Reserved.

© Copyright, 2009, The Vickers Company, All Rights Reserved.

© Copyright, 2009, The Vickers Company, All Rights Reserved.

© Copyright, 2009, The Vickers Company, All Rights Reserved.

Variable Expenses 2006 2007 2008 2009

© Copyright, 2009, The Vickers Company, All Rights Reserved.

Operating income 2006 2007 2008 2009

Income before tax $0 $0 $0 $0

© Copyright, 2009, The Vickers Company, All Rights Reserved.

Year Year Year Year

© Copyright, 2009, The Vickers Company, All Rights Reserved.

Total Liabilities 2006 2007 2008 2009

Total Liabilities and Equity Err:522 $0 $0 $0

Amount sheet is out-of-balance Err:522 $0 $0 $0

© Copyright, 2009, The Vickers Company, All Rights Reserved.

© Copyright, 2009, The Vickers Company, All Rights Reserved.

Other income and expenses

Income before tax $0 $0 $0 $0 $0

Detailed Supporting Information