FINANCIAL ANALYSIS MODEL

ANALYST'S NAME Dr. Glenn L. Stevens

NAME OF COMPANY Sample Firm

1996

NUMBER OF YEARS OF DATA 3

INCOME STATEMENT 1996 1997 1998

Sales Revenue $1,500 $1,550 $1,700 $0 $0

Less: Cost of Goods Sold $1,000 $1,030 $1,040 $0 $0

Gross Profits $500 $520 $660 =IF($B$8>4,F13-F14," ")

Less: Operating Expenses:

Selling Expense $140 $150 $155 $0 $0

General / Admin. Exp. $260 $270 $275 $0 $0

Lease Expense $5 $0 $2 $0 $0

Depreciation Expense $10 $11 $12 $0 $0

Total Operating Expenses $415 $431 $444 =IF($B$8>4,SUM(F17:F20)," ")

Operating Profits $85 $89 $216 =IF($B$8>4,F15-F21," ")

Less: Interest Expense $23 $29 $30 $0 $0

Net Profits Before Taxes $62 $60 $186 =IF($B$8>4,F22-F23," ")

Less: Taxes $10 $12 $15 $0 $0

Net Profit After Taxes $52 $48 $171 =IF($B$8>4,F24-F25," ")

Less: Pref. Stock Divds. $1 $0 $0 $0 $0

$51 $48 $171 IF($B$8>4,F26-F27," ")

BALANCE SHEET

Current Assets:

Cash $31 $12 $18 $0 $0

Marketable Securities $82 $66 $68 $0 $0

Accounts Receivable $104 $152 $160 $0 $0

Inventories $145 $191 $200 $0 $0

Total Current Assets $362 $421 $446 =IF($B$8>4,SUM(F33:F36)," ")

Gross Fixed Assets (at cost):

Land & Buildings $180 $195 $200 $0 $0

Machinery and Equipment $0 $0 $0 $0 $0

Furniture & Fixtures $0 $0 $0 $0 $0

Vehicles $0 $0 $0 $0 $0

Other (Inc. Fin. Leases) $0 $0 $0 $0 $0

Total Gross Fixed Assets $180 $195 $200 =IF($B$8>4,SUM(F39:F43)," ")

Less: Accumulated Depreciation $52 $63 $65 $0 $0

Net Fixed Assets $128 $132 $135 =IF($B$8>4,F44-F45," ")

Other Assets $0 $0 $0 $0 $0

Total Assets $490 $553 $581 =IF($B$8>4,F37+F46," ")

Current Liabilities: 1996 1997 1998 =IF($B$8>4,F37+F46," ")

Accounts Payable $126 $136 $150 $0 $0

Notes Payable $190 $200 $140 $0 $0

Accruals $25 $27 $28 $0 $0

Taxes Payable $0 $0 $0 $0 $0

Other Current Liabilities $0 $0 $0 $0 $0

Total Current Liabilities $341 $363 $318 =IF($B$8>4,SUM(F51:F55)," ")

L / T Debt (Inc. Financial Leases) $40 $38 $13 $0 $0

Total Liabilities $381 $401 $331 =IF($B$8>4,F56+F57," ")

Preferred Stock $0 $0 $0 $0 $0

Common Stock $20 $20 $20 $0 $0

Paid-In Capital In Excess of Par $30 $30 $30 $0 $0

Retained Earnings $59 $102 $200 $0 $0

Note: Enter data in Blue-coded cells; Black cells are computer generated

FIRST CALENDAR YEAR OF DATA

Earnings Available for Common Stockholders

A B C D E F G H I J

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Total Stockholders' Equity $109 $152 $250 =IF($B$8>4,SUM(F59:F62)," ")

Total Liabs. & Stockhldrs' Equity $490 $553 $581 =IF($B$8>4,F58+F63," ")

Reconciliation TA & TL/SE $0 $0 $0 =IF($B$8>4,F64-F48," ")

Number of Common Shares 500 500 500 0 0

End-of-Year Stock Price $3.00 $5.00 $5.50 $0.00 $0.00

RATIO ANALYSIS

Current Ratio 1.06 1.16 1.40 =IF($B$8>4,F37/F56," ")

Quick Ratio 0.64 0.63 0.77 =IF($B$8>4,(F37-F36)/F56," ")

Inventory Turnover 6.90 5.39 5.20 =IF($B$8>4,F14/F36," ")

Average Collection Period 24.96 35.30 33.88 =IF($B$8>4,F35/(F13/360)," ")

Fixed Asset Turnover 11.72 11.74 12.59 =IF($B$8>4,F13/F46," ")

Total Asset Turnover 3.06 2.80 2.93 =IF($B$8>4,F13/F48," ")

Debt Ratio 0.78 0.73 0.57 =IF($B$8>4,F58/F48," ")

Debt-to-Equity 0.37 0.25 0.05 =IF($B$8>4,F57/F63," ")

Times Interest Earned 3.70 3.07 7.20 =IF($B$8>4,F22/F23," ")

Gross Profit Margin 33.33% 33.55% 38.82% =IF($B$8>4,F15/F13," ")

Operating Profit Margin 5.67% 5.74% 12.71% =IF($B$8>4,F22/F13," ")

Net Profit Margin 3.47% 3.10% 10.06% =IF($B$8>4,F26/F13," ")

Return on Total Assets (ROA) 10.61% 8.68% 29.43% =IF($B$8>4,F26/F48," ")

Return on Equity (ROE) 47.71% 31.58% 68.40% =IF($B$8>4,F26/F63," ")

Earnings Per Share $0.10 $0.10 $0.34 =IF($B$8>4,F28/F66," ")

Price/Earnings Ratio 29.41 52.08 16.08 =IF(AND(F67>0,F89>0),F67/F89," ")

DUPONT ANALYSIS

Net Profit AT/Sales 3.47% 3.10% 10.06% =IF($B$8>4,F26/F13," ")

Sales/Total Assets 306.12% 280.29% 292.60% =IF($B$8>4,F13/F48," ")

ROA 10.61% 8.68% 29.43% =IF($B$8>4,F94*F95," ")

Net Profit AT/Total Assets 10.61% 8.68% 29.43% =IF($B$8>4,F26/F48," ")

Total Assets/Stockhldrs. Equity 449.54% 363.82% 232.40% =IF($B$8>4,F48/F63," ")

ROE 47.71% 31.58% 68.40% =IF($B$8>4,F97*F98," ")

STATEMENT OF CASH FLOWS

1996 1997 1998

Net Profit After Taxes $48 $171

Depreciation $11 $12

Decrease in Accts. Receiv. ($48) ($8)

Decrease in Inventories ($46) ($9)

Decrease in Other Assets $0 $0

Increase in Accounts Pay. $10 $14

Increase in Accruals $2 $1

Increase in Taxes Payable $0 $0

Increase in Other Cur. Lia. $0 $0

Cash Flow from Oper. Act. ($23) $181

Increase in Gross Fixed Assets ($15) ($5)

Cash Flow from Investments ($15) ($5)

Increase in Notes Payable $10 ($60)

Increase in Long-Term Debt ($2) ($25)

Changes in Stockholders' Equity $0 $0

CASH FLOW FROM OPERATING ACTIVITIES

CASH FLOW FROM INVESTMENT ACTIVITIES

CASH FLOW FROM FINANCING ACTIVITIES

A B C D E F G H I J63

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Preferred Dividends Paid $0 $0

($5)

$3 ($85)

Net Incr. in Cash / Mark. Securities ($35) $91

Common Dividends Paid (-)

Cash Flow from Financing Activities

A B C D E F G H I J125

126

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128

129