Company Health

MicroShots Business Analysis System is designed for the owner or professional to quickly analyze th
health of any business. MicroShots are miniature chart snapshots of key financial analysis data. The Mic
worksheet is fully automated and yields instant results.
Here is what you do:

1) Enter data in cells with Blue figures in the "Master Data Entry" worksheet.
2) Enter data in cells with Blue figures in the "Cash Flow Data Entry" worksheet.
3) Go to the "Quick Analysis 4 Periods" worksheet. Here you will find the Primary Financial Predictors
determine the overall health of the business.
4) Next, go to the "Summary Analysis" worksheet. All of the key analysis worksheets feed information b
this summary sheet for additional fast assessment.
5) Then, go to the "Financial Health Analysis" worksheet. This worksheet condenses everything into on
page.
6) Lastly, go to the automated "MicroShots" worksheet for some amazing fast analysis results.
Copyright, 2009, JaxWorks, All Rights Reserved.
Please Note: There is No Support For Free Downloads
ystem is designed for the owner or professional to quickly analyze the overall
are miniature chart snapshots of key financial analysis data. The MicroShots
" worksheet. Here you will find the Primary Financial Predictors that
" worksheet. All of the key analysis worksheets feed information back to
" worksheet. This worksheet condenses everything into one printed
" worksheet for some amazing fast analysis results.
ote: There is No Support For Free Downloads
Master Index
Copyright
Master Data Entry
License Agreement
Financial Analysis
Z-Score Analysis
Special Analysis
Asset Chart
Breakdown of Costs
Cash Flow Data Entry
Cash Flow 4 Periods
Cash Flow 8 Periods
Comp. Balance Sheet
Comp. Income Statement
Financial Summary
Forecast Analysis
Logit Analysis
MicroShots
Payroll Analysis
Quick Analysis 4 Periods
Stock Valuation
Summary Analysis
Z-Score Analysis
Z-Score Explained
Z-Score Analysis (1)
Z-Score (1) Chart
Z-Score (2) Chart
Z-Score (3) Chart
Market Value Explained

Market Value Analysis
Return-on-investment analysis
SB Headcount Analysis
Corporate Headcount Analysis
Income Statement
Sales & Cost of Sales
Gross Sales
Month
1
Month
2
$2,010,000
$2,560,000
Discounts/Allowances
($50,000)
Net Sales
($60,000)
$1,960,000
$2,500,000
Direct Material Cost
$320,000
$427,600
Direct Labor Cost
$300,000
$315,000
Other Direct Costs

Total Cost of Sales
$125,000
$745,000
$128,750
$871,350
$1,215,000
$1,628,650
1
$190,000
$50,000
$30,000
$5,000
$3,000
$1,000
$3,906
$2,133
$1,000
$4,000
$6,000
$1,000
$3,000
$8,750
$1,000
$1,000
$1,000
$6,230
$11,974
$0
$329,993
2
$191,000
$51,500
$30,900
$5,150
$3,090
$1,030
$3,754
$2,197
$1,330
$4,120
$6,180
$1,030
$3,090
$9,110
$1,030
$1,030
$1,030
$6,120
$12,374
$0
$335,065
1
$90,000
$43,000
$18,000
$14,000
$6,000
$2,110
$100
$5,557
$0
$0
$0
$0
2
$102,700
$46,875
$18,540
$14,420
$6,180
$2,680
$103
$5,724
$0
$0
$0
$0
Gross Profit
Expenses
Fixed Expenses
Executive Salaries
Advertising
Auto & Truck Expenses
Depreciation
Employee Benefits
Home Office Business Expenses
Insurance
Bank Charges
Legal & Professional Services
Meals & Entertainment
Office Expense
Retirement Plans
Rent - Equipment
Rent - Office Property
Repairs
Supplies
Taxes - Business & Payroll
Travel
Utilities
Other Expenses
Total Fixed Expenses
Variable Expenses
Office salaries
Employee benefits
Payroll taxes
Sales and Marketing
Telephone and telegraph
Stationary and office supplies
Bad debts
Postage
Contributions
Add Item
Add Item
Add Item
Add Item
Add Item
Miscellaneous
Total Variable Expenses
$0
$0
$0
$178,767
$0
$0
$0
$197,222
Operating expenses
Interest
Depreciation
Amortization
Other
Total expenses
1
$508,760
$16,250
$32,500
$1,250
$0
$558,760
2
$532,287
$16,738
$33,475
$1,288
$0
$583,787
Operating income
$656,240
$1,044,863
Subtotal
1
$10,000
$20,000
$30,000
2
$10,300
$20,600
$30,900
Income before tax
$686,240
$1,075,763
Income taxes
$205,872
$322,729
Net income
$480,368
$753,034
$670,368
$686,241
686
$944,034
$1,075,764
1,076
Other income and expenses

Gain (loss) on sale of assets
Other (net)
Return On Ownership
Break-Even
Balance Sheet
ASSETS
Current Assets
Month
1
$451,000
$350,000
$1,200
$400,000
$10,000
$1,212,200
Month
2
$464,530
$460,500
$3,200
$612,000
$10,300
$1,550,530
Subtotal
Less-accumulated depreciation
Total Fixed Assets
1
$1,000,000
$1,500,000
$800,000
$3,300,000
$400,000
$2,900,000
2
$1,030,000
$1,555,000
$824,000
$3,409,000
$412,000
$2,997,000
Cost
Less-accumulated amortization
Total Intangible Assets
1
$50,000
$20,000
$30,000
2
$51,500
$20,600
$30,900
Total Assets
$25,000
$4,167,200
$25,750
$4,604,180
Cash and cash equivalents

Accounts receivable
Notes receivable
Inventory
Other current assets
Total Current Assets
Fixed Assets
Land
Buildings
Equipment
Intangible Assets
Other assets
LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
1
$600,000
$100,000
$100,000
$30,000
$90,000
$16,000
$936,000
2
$618,000
$103,000
$103,000
$30,900
$92,700
$16,480
$964,080
1
$601,200
$100,000
$30,000
$50,000
2
$624,200
$103,000
$30,900
$51,500
$1,717,200
$1,773,680
1
$100,000
100,000
$950,000
2
$100,000
100,000
$678,500
Accounts payable
Notes payable
Current portion of long-term debt
Income taxes
Accrued expenses
Other current liabilities
Total Current Liabilities
Non-Current Liabilities
Long-term debt
Deferred income
Deferred income taxes
Other long-term liabilities
Total Liabilities
Stockholders' Equity
Capital stock issued
Number of shares issued
Additional paid in capital
Retained earnings
Total Stockholders' Equity
Total Liabilities and Equity
$1,400,000
$2,450,000
$1,542,000
$2,320,500
$4,167,200
$4,094,180
$0
$510,000
Amount sheet is out-of-balance
Summary Extractions & Additional Data Entries

Line Item
Inventory
Total assets
Owners' equity
Number of common shares
Beginning of
Year
400,000
3,266,000
1,550,000
100,000
Line Item
Current assets
Fixed assets
Total assets
Average total assets
Inventory
Average inventory
Current liabilities
Total liabilities
Owners' equity
Number of common shares
Average number of common shares
Average owners' equity
Market price per share
Cash flow
Cash flow per share
Dividends paid
Retained Earnings
Total sales
Operating expenses
Operating income
Advertising expense
Marketing expense
Earnings before interest and taxes
Interest expense
Net income
Total loan
Value of collateral or property
1
1,212,200
2,900,000
4,112,200
3,689,100
451,000
400,000
400,000
936,000
1,717,200
2,450,000
100,000
100,000
2,000,000
96.52
90,360
0.90
5,000
1,400,000
2,010,000
508,760
1,501,240
50,000
45,000
686,240
16,250
480,368
601,200
65,000
2
1,550,530
2,997,000
4,547,530
3,906,765
464,530
612,000
506,000
964,080
1,773,680
2,320,500
100,000
100,000
1,935,250
96.52
289,233
2.89
6,000
1,542,000
2,560,000
532,287
2,027,713
51,500
45,000
1,075,763
16,738
753,034
624,200
65,000
Cash Flow Data Entries

Operating Data
Days sales in accounts receivable
Days materials cost in inventory
Days finished goods in inventory
Days materials cost in payables
Days payroll expense accrued
Days operating expense accrued
1
30
30
45
60
7
20
Expense Data
Direct labor
Other payroll
Payroll taxes
Insurance
Legal/accounting
Office overhead
$320,000
$240,000
$56,000
$28,000
$40,000
$60,000
Financing Data (0 on)

Long term debt
Short-term debt
Additional paid-in capital
Accumulated depreciation (as of 2005)
Depreciation
Capital
$100,000
$50,000
$400,000
Forecasted
1
Sales
Sales
Cost of sales
$2,000,000
$945,000
$1,500,000
$865,000
Gross profit
$1,055,000
$635,000
Operating expenses
Interest
Depreciation
Amortization
Total expenses
$424,000
$16,250
$32,500
$1,250
$474,000
$318,000
$16,250
$33,958
$1,250
$369,458
Operating income
$581,000
$265,542

Other (net)
Subtotal
$100,000
$20,000
$120,000
$10,000
$50,000
$60,000
Expenses
Income before tax
$701,000
$325,542
Income taxes
$210,300
$97,663
Net income
$490,700
$227,879
$1,400,000
$1,890,700
$0
$0
$1,890,700
$2,118,579
$320,000
$500,000
$125,000
$240,000
$500,000
$125,000
Depreciation: Enter the numbers of years.

30
year Buildings
10
year Equipment
$12,500
$20,000
$12,083
$21,875
Interest: Percentages from Data sheet

10.00%
Long-Term
10.00%
Short-Term
$1,250
$15,000
$1,250
$15,000
Retained earnings-beginning
Dividends paid
Retained earnings-ending
Detailed Supporting Information

Cost of sales
Direct labor
Materials
Other costs
Cash Flow Balance Sheet Entries

Actual
0
ASSETS
Current Assets
Accounts receivable
Inventory
Fixed Assets
Land
Buildings
Equipment
Subtotal
Total Fixed Assets
Forecast
1
$451,000
$350,000
$400,000
$10,000
$1,211,000
$90,360
$657,534
$630,411
$60,000
$1,438,305
$100,000
$1,500,000
$800,000
$2,400,000
$400,000
$2,000,000
$112,500
$1,450,000
$875,000
$2,437,500
$432,500
$2,005,000
Intangible Assets
Cost
Other assets
Total Assets
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable
Notes payable
Income taxes
Accrued expenses
$50,000
$20,000
$30,000
$50,000
$21,250
$28,750
$25,000
$3,266,000
$33,000
$3,505,055
Actual
0
$600,000
$100,000
$100,000
$30,000
$90,000
$16,000
$936,000
$328,767
$50,000
$100,000
$183,300
$83,288
$12,000
$757,355
$600,000
$100,000
$30,000
$50,000
$500,000
$90,000
$27,000
$90,000
$1,716,000
$1,464,355
$100,000
$50,000
$1,400,000
$0
$1,550,000
$100,000
$50,000
$1,890,700
$0
$2,040,700
$3,266,000
$3,505,055
Long-term debt
Deferred income
Total Liabilities
Retained earnings
Other
Forecast
1
"C" Corporation (Y/N)

Cash balance positive or (negative)
Amount sheet is out-of-balance
Y
Positive
$0
Positive
$0
Month
3
Month
4
$2,721,800
$3,285,454
($70,000)
($80,000)
$2,651,800
$3,205,454
$431,238
$432,513
$330,450
$346,364
$132,613
$894,301
$136,591
$915,467
$1,757,500
$2,289,987
3
$195,000
$53,045
$31,827
$45,305
$3,183
$1,061
$4,010
$2,263
$1,670
$4,244
$6,365
$1,061
$3,183
$9,544
$1,061
$1,061
$1,061
$6,010
$14,186
$0
$385,138
4
$195,000
$54,636
$32,782
$50,464
$3,278
$1,093
$3,994
$2,331
$2,020
$4,371
$6,556
$1,093
$3,278
$9,929
$1,093
$1,093
$1,093
$5,900
$16,974
$0
$396,977
3
$112,368
$47,970
$19,096
$14,853
$6,365
$3,005
$106
$5,895
$0
$0
$0
$0
4
$118,647
$51,249
$19,669
$15,298
$6,556
$3,493
$109
$6,072
$0
$0
$0
$0
$0
$0
$0
$209,659
$0
$0
$0
$221,095
3
$594,797
$17,240
$34,479
$1,326
$0
$647,842
4
$618,071
$17,757
$35,514
$1,366
$0
$672,707
$1,109,658
$1,617,279
3
$10,609
$21,218
$31,827
4
$10,927
$31,855
$42,782
$1,141,485
$1,660,061
$342,445
$498,018
$799,039
$1,162,043
$994,039
$1,141,486
1,141
$1,357,043
$1,660,062
1,660
Month
3
$478,466
$871,315
$3,000
$824,360
$10,609
$2,187,750
Month
4
$492,820
$1,382,454
$3,400
$937,091
$10,927
$2,826,692
3
$1,106,090
$1,591,350
$948,720
$3,646,160
$424,360
$3,221,800
4
$1,109,273
$1,739,091
$874,182
$3,722,545
$437,091
$3,285,454
3
$53,045
$21,218
$31,827
4
$54,636
$21,855
$32,782
$26,523
$5,467,899
$27,318
$6,172,246
3
$636,540
$106,090
$106,090
$31,827
$95,481
$16,974
$993,002
4
$640,563
$109,273
$109,273
$32,782
$98,345
$17,484
$1,007,719
3
$645,630
$106,090
$31,827
$53,045
4
$668,308
$109,273
$32,782
$54,636
$1,829,594
$1,872,718
3
$100,000
100,000
$1,853,045
4
$100,000
100,000
$2,469,710
450794.6146
$1,685,260
$3,638,305
$1,729,818
$4,299,528
$5,467,899
$6,172,246
$0
$0
3
2,187,750
3,221,800
5,409,550
4,337,775
478,466
824,360
612,180
993,002
1,829,594
3,638,305
100,000
100,000
2,594,153
96.52
614,196
6.14
7,000
1,685,260
2,721,800
594,797
2,127,003
53,045
45,000
1,141,485
17,240
799,039
645,630
65,000
4
2,826,692
3,285,454
6,112,146
4,689,073
492,820
937,091
668,545
1,007,719
1,872,718
4,299,528
100,000
100,000
2,924,764
96.52
1,267,364
12.67
8,000
1,729,818
3,285,454
618,071
2,667,383
54,636
45,000
1,660,061
17,757
1,162,043
668,308
65,000
Summary
$2,826,692
$3,285,454
$6,112,146
$4,689,073
$492,820
$937,091
$668,545
$1,007,719
$1,872,718
$4,299,528
100,000
100,000
$2,924,764
$96.52
$2,261,153
$22.61
$26,000
$1,729,818
$10,577,254
$2,253,915
$8,323,339
$209,181
$180,000
$4,563,549
$67,984
$3,194,484
$668,308
$65,000
2
30
30
45
60
7
20
3
30
30
45
60
7
20
$240,000
$180,000
$42,000
$21,000
$30,000
$45,000
$208,000
$156,000
$36,400
$18,200
$26,000
$39,000
Current Portion
$100,000
$50,000
LT Portion
$500,000
Forecasted
3
4
30
30
45
60
7
20
$321,616
$241,212
$56,283
$28,141
$40,202
$60,303
Rate
10.00%
10.00%
Total
4 Periods
$1,300,000
$833,000
$2,010,100
$1,071,616
$6,810,100
$3,714,616
$467,000
$938,484
$3,095,484
$275,600
$16,250
$33,958
$1,250
$327,058
$426,141
$16,250
$33,958
$1,250
$477,599
$1,443,741
$65,000
$134,374
$5,000
$1,648,115
$139,942
$460,885
$1,447,369
$3,000
$100,000
$103,000
$405,700
$200,000
$605,700
$518,700
$370,000
$888,700
$242,942
$1,066,585
$2,336,069
$72,883
$319,975
$700,821
$170,059
$746,609
$1,635,248
$2,118,579
$2,288,638
$1,400,000
$0
$50,000
$50,000
$2,288,638
$2,985,247
$2,985,248
$208,000
$500,000
$125,000
$321,616
$500,000
$250,000
$1,089,616
$2,000,000
$625,000
$12,083
$21,875
$12,083
$21,875
$48,749
$85,625
$1,250
$15,000
$1,250
$15,000
$5,000
$60,000
Forecast
2
$289,233
$493,151
$590,959
$45,090
$1,418,433
$614,196
$427,397
$575,178
$76,320
$1,693,091
$1,267,364
$660,855
$692,852
$50,000
$2,671,071
$125,000
$1,450,000
$875,000
$2,450,000
$466,458
$1,983,542
$137,500
$1,450,000
$875,000
$2,462,500
$500,416
$1,962,084
$150,000
$1,450,000
$875,000
$2,475,000
$534,374
$1,940,626
$50,000
$22,500
$27,500
$50,000
$23,750
$26,250
$50,000
$25,000
$25,000
$120,000
$3,549,475
$5,000
$3,686,425
$23,000
$4,659,697
Forecast
2
$328,767
$50,000
$100,000
$70,663
$62,466
$12,000
$623,896
$328,767
$50,000
$100,000
$45,883
$54,137
$12,000
$590,787
$328,767
$50,000
$100,000
$292,975
$83,708
$12,000
$867,450
$500,000
$90,000
$27,000
$40,000
$500,000
$90,000
$27,000
$40,000
$500,000
$90,000
$27,000
$40,000
$1,280,896
$1,247,787
$1,524,450
$100,000
$50,000
$2,118,579
$0
$2,268,579
$100,000
$50,000
$2,288,638
$0
$2,438,638
$100,000
$50,000
$2,985,247
$0
$3,135,247
$3,549,475
$3,686,425
$4,659,697
Positive
$0
Positive
$0
Positive
$0
CASH FLOW DATA ENTRY

Year of Projection
Corporation Type (C or S)?
Operating Data
Days sales in accounts receivable
Days materials cost in inventory
Days finished goods in inventory
Days materials cost in payables
Days payroll expense accrued
Days operating expense accrued
Expense Data
Direct labor as % of sales
Other payroll as % of sales
Payroll taxes as % of payroll
Insurance as % of payroll
Legal/accounting as % of sales
Office overhead as % of sales
Financing Data (0 on)
Long term debt
Short-term debt
Additional paid-in capital
Accumulated depreciation (as of 1999)
2000
C
16.00%
12.00%
10.00%
5.00%
2.00%
3.00%
'C' Corporation format selected; income taxes WILL b

1
30
30
45
60
7
20
of sales
of sales
of payroll
of payroll
of sales
of sales
$320,000
$240,000
$56,000
$28,000
$40,000
$60,000
Depreciation
Capital
$100,000
$50,000
$400,000
2
30
30
45
60
7
20
3
30
30
45
60
7
20
$240,000
$180,000
$42,000
$21,000
$30,000
$45,000
$208,000
$156,000
$36,400
$18,200
$26,000
$39,000
Current Portion
$100,000
$50,000
LT Portion
$500,000
4
30
30
45
60
7
20
$321,616
$241,212
$56,283
$28,141
$40,202
$60,303
Rate
10.00%
10.00%
The XYZ Company

6200 XYZ Drive
ABC, California 00000-0000
Phone: (000) 000-0000
FAX: (000) 000-0000
E-mail: someone@xyz.com
Financial Health MicroShots

Financial Analysis (Ratio)
Z-Score Analysis - 4 Periods
1
Sales
4 Periods
Cash Flow
4 Periods
4,000
150.0
3,000
Z Score: Publicly Held
0.2
0.3
0.2
0.3
100.0
2,000
0. 3
1,000
0. 2
50.0
0. 1
0. 0
1
Z Score: Privately Held
1.7
1.6
1.9
1. 5
1. 0
0. 5
0. 0
2
Z Score: Non-manuf.
4.1
4.8
5.9
7.0
2. 0
Thousands of $
Debt Ratio
4 Periods
0.5
1,400
1,200
1,000
800
600
400
200
0
0.4
0.3
0.2
0.1
0.0
1
1. 5
Thousands of $
1. 0
0.0
Net Income
4 Periods
2. 0
Thousands of $
1.4
Ratio
0. 5
0. 0
Current Ratio
4 Periods
The Altman Z-Score is routinely used by

Stockbrokers t rying to determine if a
company is a good investment, Bankers to
determine loan risk, and by Anyone who
wants to take a close look at their own
company's financial health.
Break-Even
4 Periods
3.0
2.5
2.0
1.5
1.0
0.5
0.0
2,000
1,500
1,000
500
1
Ratio
0
1
Thousands of $
CASH FLOW STATEMENT 4 PERIODS

Forecasted
1
Cash from operations
Net earnings (loss)
Add-depreciation and amortization
$490,700
$33,750
$227,879
$35,208
$524,450
$263,087
($307,534)
($230,411)
($50,000)
($8,000)
($271,233)
$0
$153,300
($6,712)
($4,000)
$0
$164,383
$39,452
$14,910
($87,000)
$0
$0
($112,637)
($20,822)
$0
$0
($724,590)
($1,714)
$12,500
($50,000)
$75,000
$0
$12,500
$0
$0
$0
$37,500
$12,500
($50,000)
($100,000)
($10,000)
($3,000)
$40,000
$0
$0
$0
$0
$0
($50,000)
$0
Net cash from financing
($123,000)
($50,000)
Net increase (decrease) in cash
($360,640)
$198,873
$451,000
$90,360
Net cash
Cash provided (used) by
operating activities
Accounts Receivable
Inventory
Other non-current assets
Accounts payable
Income taxes
Accrued expenses
Dividends paid
Net cash from operations
Investment transactions
Increases (decreases)
Land
Buildings and improvements
Equipment
Intangible assets
Net cash from investments
Financing transactions
Short term notes payable
Long term debt
Deferred income
Capital stock and paid in capital
Cash at beginning of period
Cash at the end of period
$90,360
$289,233
Forecasted
3
Total
4 Periods
$170,059
$35,208
$746,609
$35,208
$1,635,248
$139,374
$205,267
$781,817
$1,774,621
$65,754
$15,781
($31,230)
$115,000
$0
$0
($24,780)
($8,329)
$0
$0
($233,458)
($117,674)
$26,320
($18,000)
$0
$0
$247,092
$29,571
$0
($50,000)
($310,855)
($292,852)
($40,000)
$2,000
($271,233)
$0
$262,975
($6,292)
($4,000)
($50,000)
$132,196
($116,149)
($710,257)
$12,500
$0
$0
$0
$12,500
$0
$0
$0
$50,000
($50,000)
$75,000
$0
$12,500
$12,500
$75,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
($50,000)
($100,000)
($10,000)
($3,000)
($10,000)
$0
$0
$0
($173,000)
$324,963
$653,168
$816,364
$289,233
$614,196
$451,000
$614,196
$1,267,364
$1,267,364
CASH FLOW PROJECTIONS 8 PERIODS
1
1
$490,700
$33,750
Current
2
3
2
3
$227,879
$170,059
$35,208
$35,208
$524,450
$263,087
$205,267
($307,534)
($230,411)
($50,000)
($8,000)
($271,233)
$0
$153,300
($6,712)
($4,000)
$0
$164,383
$39,452
$14,910
($87,000)
$0
$0
($112,637)
($20,822)
$0
$0
$65,754
$15,781
($31,230)
$115,000
$0
$0
($24,780)
($8,329)
$0
$0
($724,590)
($1,714)
$132,196
$12,500
($50,000)
$75,000
$0
$12,500
$0
$0
$0
$12,500
$0
$0
$0
$37,500
$12,500
$12,500
($50,000)
($100,000)
($10,000)
($3,000)
$40,000
$0
$0
$0
$0
$0
($50,000)
$0
$0
$0
$0
$0
$0
$0
($123,000)
($50,000)
$0
($360,640)
$198,873
$324,963
$451,000
$90,360
$289,233

Net earnings (loss)
Accounts Receivable
Inventory
Accounts payable
Income taxes
Accrued expenses
Dividends paid
Land
Equipment
Intangible assets
Long term debt
Deferred income
Capital stock and paid in capital
$90,360
$289,233
$614,196
Current
4
4
$746,609
$35,208
Forecasted-Linear Regression Analysis

5
6
7
8
5
6
7
8
$586,289
$657,279
$728,270
$799,261
$35,937
$36,374
$36,812
$37,249
$781,817
$622,226
$693,654
$765,082
$836,510
($233,458)
($117,674)
$26,320
($18,000)
$0
$0
$247,092
$29,571
$0
($50,000)
($46,814)
$5,422
$35,705
$43,500
$135,617
$0
$158,052
$28,763
$2,000
($50,000)
($34,454)
$36,876
$53,987
$60,700
$216,986
$0
$194,975
$40,897
$3,200
($65,000)
($22,094)
$68,330
$72,269
$77,900
$298,356
$0
$231,899
$53,031
$4,400
($80,000)
($9,734)
$99,784
$90,551
$95,100
$379,726
$0
$268,822
$65,165
$5,600
($95,000)
($116,149)
$312,244
$508,167
$704,091
$900,014
$12,500
$0
$0
$0
$12,500
$25,000
($37,500)
$0
$12,500
$40,000
($60,000)
$0
$12,500
$55,000
($82,500)
$0
$12,500
$70,000
($105,000)
$0
($7,500)
($15,000)
($22,500)
$12,500
$0
$0
$0
$0
$0
$0
$0
$25,000
$50,000
$5,000
$1,500
($20,000)
$0
$40,000
$80,000
$8,000
$2,400
($27,000)
$0
$55,000
$110,000
$11,000
$3,300
($34,000)
$0
$70,000
$140,000
$14,000
$4,200
($41,000)
$0
$0
$61,500
$103,400
$145,300
$187,200
$653,168
$995,970
$1,312,721
$1,629,472
$1,946,224
$614,196
$533,313
$602,159
$671,005
$739,851
$1,267,364
$1,529,282
$1,914,880
$2,300,477
$2,686,075
Primary Financial Predictors - 4 Periods - Quick Anal

Account
Descriptions
Current Assets
EBIT
Cash Flow
Current Liabilities
Sales
Working Capital
Accounts Receivable-Beginning
Accounts Receivable-Ending
Cash
Cash Flow
Current Assets
Current Liabilities
EBIT
Equity
Fixed Assets
Interest
Inventory-Beginning
Inventory-Ending
Long Term Debt
Market Value of Equity
Marketable Securities
Net Profit before Interest and Taxes
Retained Earnings
Sales
Tangible Total Assets
Total Assets
Total Liabilities
Working Capital
Period
1
350,000
657,534
451,000
90,360
1,212,200
936,000
686,240
2,450,000
2,900,000
16,250
400,000
630,411
601,200
2,450,000
10,000
656,240
1,400,000
1,960,000
3,300,000
4,167,200
1,717,200
276,200

Predictions
Z Score: If Publicly Held
1.2 x (working capital / total assets)
1.4 x (retained earn / total assets)
3.3 x (EBIT / total assets)
.6 x (market value equity / total liabilities)
.999 x (sales / total assets)
Z-Score
1
0.0795
0.4703
0.5434
0.8560
0.4699
2.42
Z Score: If Privately Held

.717 x (working capital / total assets)
.847 x (retained earn / total assets)
.042 x (market value equity / total liabilities)
.998 x (sales / total assets)
Z-Score
1
0.0475
0.2846
0.5116
0.0599
0.4694
1.37
Z Score: Non-Manufacturing
6.56 x (working capital / total assets)
3.26 x (retained earn / total assets)
1.05 x (market value equity / total liabilities)
Z Score
1
0.4348
1.0952
1.1066
1.4981
4.13
Springate Analysis
Working Capital
Net Profit before interest and Taxes
Total Assets
Net Profit before Taxes
Current Liabilities
Sales
1
276,200
656,240
4,167,200
686,240
936,000
1,960,000
Working Capital/Total Assets

Net Profit before interest and Taxes/Total Assets
Net Profit before Taxes/Current Liabilities
Sales/Total Assets
Z=
0.06628
0.16468
0.73316
0.47034
1.25

Logit Analysis
Cash
Accounts Receivable-Beginning
Accounts Receivable-Ending
Inventory-Beginning
Inventory-Ending
Fixed Assets
Total Assets
Current Liabilities
Long Term Debt
Sales
Income from Continuing Operations
1
451,000
10,000
350,000
657,534
400,000
630,411
2,900,000
4,167,200
936,000
601,200
1,960,000
656,240
Constant
Average Inventories/Sales
Average Receivables/Average Inventories
Cash+Marketable Securities/Total Assets
Quick Assets/Current Liabilities
Income from CO/(Total Assets-Current Liab)
Long-Term Debt/(Total Assets-Current Liab)
Sales/(Net Working Capital+Fixed Assets)
Sum of Coefficients * Ratios
Probability of Bankruptcy
Fulmer H-Factor Analysis
Retained Earnings/Total Assets
Sales/Total Assets
EBIT/Equity
Cash Flow/Total Debt
Total Debt/Total Assets
Current Liabilities/Total Assets
Log Tangible Total Assets
Working Capital/Total Debt
Log EBIT/Interest
0.23883
-0.035
-1.651
-1.193
3.673
0.099
-0.809
0.058
0.381
40.58%
1
1
0.3360
0.4703
0.2801
0.0526
0.4121
0.2246
6.5185
0.1608
1.6256
H-Factor
1.86
0.10
0.02
0.07
-0.05
0.52
3.75
0.17
1.45
Sum
7.89
Less
-6.08

H=
1.82
Quick Analysis
Period
2
Period
3
Period
4
657,534
460,500
464,530
663,403
1,550,530
964,080
1,075,763
2,320,500
2,997,000
16,738
630,411
590,959
624,200
2,320,500
10,300
1,044,863
1,542,000
2,500,000
3,409,000
4,604,180
1,773,680
586,450
460,500
493,151
478,466
803,429
2,187,750
993,002
1,141,485
3,638,305
3,221,800
17,240
590,959
575,178
645,630
3,638,305
10,609
1,109,658
1,685,260
2,651,800
3,646,160
5,467,899
1,829,594
1,194,748
493,151
427,397
492,820
1,145,988
2,826,692
1,007,719
1,660,061
4,299,528
3,285,454
17,757
575,178
692,852
668,308
4,299,528
10,927
1,617,279
1,729,818
3,205,454
3,722,545
6,172,246
1,872,718
1,818,973
Predictor
ID
L
L
L
F
Z, S
All
Z, S, F
F
L
F
L
L
L
Z
L
S, L
Z, F
ALL except Z3
F
All
Z, F
Z, S, F
Instructions
These figures are linked to
the Master Data Entry
worksheet.
The Predictor ID Codes
indicate
the
individual
analyses that use the
numbers:
Z = Z-Scores
S = Springate
L = Logit Analysis
F = Fulmer H-Factor
All = All Predictors
Quick Analysis
Quick Analysis
Predictions
2
0.1528
0.4689
0.7710
0.7850
0.5424
2.72
3
0.2622
0.4315
0.6889
1.1932
0.4845
3.06
4
0.3536
0.3924
0.8876
1.3775
0.5188
3.53
TREND
2
0.0913
0.2837
0.7259
0.0549
0.5419
1.70
3
0.1567
0.2611
0.6486
0.0835
0.4840
1.63
4
0.2113
0.2374
0.8356
0.0964
0.5183
1.90
TREND
2
0.8356
1.0918
1.5701
1.3737
4.87
3
1.4334
1.0048
1.4029
2.0880
5.93
4
1.9332
0.9136
1.8074
2.4107
7.06
TREND
2
586,450
1,044,863
4,604,180
1,075,763
964,080
2,500,000
3
1,194,748
1,109,658
5,467,899
1,141,485
993,002
2,651,800
4
1,818,973
1,617,279
6,172,246
1,660,061
1,007,719
3,205,454
TREND
0.12737
0.23365
1.11584
0.54298
1.80
0.21850
0.20876
1.14953
0.48498
1.82
0.29470
0.26896
1.64734
0.51933
2.42
3.85 OK
Overall Trend OK
2.03 Warning - Trend Below 2.90

Overall Trend is OK
7.96 OK
Overall Trend is OK
2.71 OK - Above 0.862

Overall Trend is OK
Quick Analysis
2
464,530
10,300
657,534
460,500
630,411
590,959
2,997,000
4,604,180
964,080
624,200
2,500,000
1,044,863
3
478,466
10,609
460,500
493,151
590,959
575,178
3,221,800
5,467,899
993,002
645,630
2,651,800
1,109,658
4
492,820
10,927
493,151
427,397
575,178
692,852
3,285,454
6,172,246
1,007,719
668,308
3,205,454
1,617,279
0.23883
-0.026
-1.234
-1.112
2.982
0.140
-0.746
0.077
0.321
42.04%
2
2
0.3349
0.5430
0.4636
0.3740
0.3852
0.2094
6.5326
0.3306
1.8080
0.23883
-0.023
-1.357
-0.964
3.041
0.121
-0.628
0.077
0.505
37.65%
3
3
0.3082
0.4850
0.3137
0.4391
0.3346
0.1816
6.5618
0.6530
1.8209
0.23883
-0.023
-0.976
-0.880
2.840
0.152
-0.563
0.090
0.879
29.33%
4
4
0.2803
0.5193
0.3861
0.6119
0.3034
0.1633
6.5708
0.9713
1.9708
1.85
0.12
0.03
0.48
-0.05
0.49
3.76
0.36
1.62
8.65
-6.08
1.70
0.10
0.02
0.56
-0.04
0.42
3.77
0.71
1.63
8.88
-6.08
1.55
0.11
0.03
0.78
-0.04
0.38
3.78
1.05
1.76
9.40
-6.08
TREND
5
TREND
28% OK - Below 50%

Overall Trend is OK
Quick Analysis
2.57
2.80
3.33
3.82 OK
2.63 Overall Trend is OK
Fast Trak's Summary Analysi

The XYZ Company
Z Score: If Publicly Held
(Higher is Better)
Month
2
2
2.40
2.70
If Z is less than 1.8 then the firm is classified as Faile
Z Score: If Privately Held

(Higher is Better)
1.35
1.68
If Z is less than 1.23 then the firm is classified as Fai
Z Score: Non-manufacturing
(Higher is Better)
4.09
4.83
If Z is less than 1.11 then the firm is classified as Fai
Logit Analysis
(Lower is Better)
58.42%
41.04%
If percentage is higher than 50% and trending higher
FINANCIAL INDICATORS
Month
1
1
Income Ratios
Turnover of Total Operating Assets
158%
159%
Net Sales to Net Worth
80.99%
109.19%
Gross Margin on Net Sales
61.99%
65.15%
Operating Income to Net Sales Ratio
33.48%
41.79%
Profitability Ratios
Earnings Per Share (EPS) Ratio
$4.80
$7.53
Net Profit Margin
24.51%
30.12%
Return on Total Assets
11.53%
16.36%
Return on Net Worth
19.61%
26.60%
Liquidity Ratios
Acid Test (Quick Ratio)
0.87
0.97
Current Ratio
1.30
1.61

The XYZ Company
Activity Ratios
Average Collection Period Computations
Accounts Receivable
Credit Sales
Days Per Year
Credit sales per day
Average Collection Period - Days
Average Collection Period Ratio
$350,000
$2,010,000
365
$5,507
63.56
5.74
Inventory Turnover
$460,500
$2,560,000
365
$7,014
65.66
5.56
1.86
1.42
65.18
67.23
5.60
5.43
195.97
256.36
0.41
0.39
Net Sales to Inventory
4.90
4.08
Days Purchases in AP
293.96
258.87
Days Sales in AR
Receivables Turnover
Days Inventory
Debt ratio
Other Key Ratios

The XYZ Company
Working Capital
$276,200
$586,450
Net Sales to Working Capital
7.10
4.26
Total Assets to Net Sales
2.13
1.84
Net Sales to AR
5.60
5.43
Net Sales to Net Fixed Assets
0.68
0.83
Net Sales to Total Assets
0.47
0.54
Amortization and Depreciation Expense to Net Sales
0.02
0.01
Gross Profit Percentage
61.99%
65.15%
Operating Expenses as % of Net Sales
28.51%
23.35%
Return on Net Sales
24.51%
30.12%
Income before tax to Net Worth
28.01%
38.01%
Income before tax to Total Assets
16.47%
23.36%
291.44%
204.77%
Retained Earning to Net Income

Times Interest Earned
40.38
62.43
Interest Expense to Net Sales
0.01
0.01
Current Liabilities to Net Worth
0.38
0.34
Current Liabilities to Inventory
2.34
1.58
AP to Net Sales
0.31
0.25
Total Liabilities to Net Worth (Debt Ratio)
70.09%
Net Worth to Total Liabilities
1.43
62.66%
1.60

The XYZ Company
PAYROLL ANALYSIS
CURRENT NUMBER OF EMPLOYEES
CURRENT SALES ANNUALIZED
CURRENT COMPLETED PERIOD SALES
CURRENT PAYROLL
QUARTER/YEAR PAYROLL ONE YEAR AGO
37
$3,399,968
$3,285,454
$350,064
$313,647
SALES VOLUME REQUIRED, AT CURRENT PAYROLL LEVEL, TO PRODUCE PROFITS

EQUAL TO THE PREVIOUS YEAR PROFITS . . . . . . . . . . . . . . . . . . .
$3,666,922
SALES DEFICIENCY = SALES REQUIRED MINUS CURRENT VOLUME
SALES DEFICIENCY IS--------------($266,954)
GROSS PAYROLL ALLOWABLE
UNDER PROJECTED CONDITIONS . . . . . . . . . . . . . . . . . . . . .
$324,579
GROSS PAYROLL BURDEN IS------
($25,485)
THE NUMBER OF NEEDED EMPLOYEES ON THE PAYROLL . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The XYZ Company
CASH FLOW ANALYSIS
Month
1

Net earnings (loss)
Accounts Receivable
Inventory
Accounts payable
Income taxes
Accrued expenses
Distributions to shareholders
Net cash used by operations
Land
Equipment
Intangible assets
Long term debt
Deferred income
Capital invested
Month
2
$480,368
$33,750
$753,034
$34,763
$514,118
$787,797
($307,534)
($230,411)
($50,000)
($8,000)
($271,233)
$0
$153,300
($6,712)
($4,000)
$0
$164,383
$39,452
$14,910
($87,000)
$0
$0
($112,637)
($20,822)
$0
$0
($724,590)
($1,714)
$12,500
($50,000)
$75,000
$0
$12,500
$0
$0
$0
$37,500
$12,500
($50,000)
($100,000)
($10,000)
($3,000)
$40,000
$0
$0
$0
$0
$0
($50,000)
$0
($123,000)
($50,000)

The XYZ Company
($360,640)
$198,873
$451,000
$464,530
$90,360
$663,403
Prepared by JaxWorks Consultancy, Inc.
ak's Summary Analysis
The XYZ Company

Month
Month
3
4
3
4
3.04
3.51
Z is less than 1.8 then the firm is classified as Failed.
Trend
5
Comments
5
3.83 Trend is Upward
1.62
1.88
5.89
7.02
20.78%
8.28%
percentage is higher than 50% and trending higher-Not Good!
-10.54% Trend is Downward
120%
112%
93% Trend is Downward
73.53%
75.13%
71.39% Trend is Downward
66.28%
71.44%
73.58% Trend is Upward
41.85%
50.45%
$7.99
$11.62
$13.21
Trend is Upward
30.13%
36.25%
14.61%
18.83%
21.96%
27.03%
1.37
1.88
2.20
2.81
The XYZ Company

$871,315
$2,721,800
365
$7,457
116.85
3.12
$1,382,454
$3,285,454
365
$9,001
153.58
2.38
1.07 Trend is Downward
1.08
0.98
119.93
157.42
3.04
2.32
336.45
373.62
0.33
0.30
3.22
3.42
259.80
255.39

The XYZ Company

$1,194,748
$1,818,973
$2,278,247 Trend is Upward
2.22
1.76
(0.68) Trend is Downward
2.06
1.93
3.04
2.32
0.82
0.98
0.48
0.52
0.01
0.01
66.28%
71.44%
24.43%
20.99%
30.13%
36.25%
31.37%
38.61%
20.88%
26.90%
210.91%
148.86%
64.37
91.08
0.01
0.01
0.27
0.23
1.20
1.08
0.24
0.20
50.29%
1.99
43.56%
2.30

The XYZ Company
-8.1%
-3.01
Comments
Under-staffed
The XYZ Company

Month
3
Month
4
Trend
5
Comments
$799,039
$35,805
$1,162,043
$36,880

$37,907 Trend is Upward
$834,845
$1,198,922
$65,754
$15,781
($31,230)
$115,000
$0
$0
($24,780)
($8,329)
$0
$0
($233,458)
($117,674)
$26,320
($18,000)
$0
$0
$247,092
$29,571
$0
($50,000)
($46,814)
$5,422
$35,705
$43,500
$135,617
$0
$158,052
$28,763
$2,000
($50,000)
$132,196
($116,149)
$12,500
$0
$0
$0
$12,500
$0
$0
$0
$12,500
$12,500
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$12,500
$25,000
($37,500)
$0
Trend is Upward
Trend is Upward
Trend is Upward
Trend is Downward
Trend is Upward
Trend is Upward
Trend is Upward
Trend is Upward
Trend is Upward
Trend is Downward
Trend is Upward
Trend is Upward
Trend is Downward
Trend is Upward
$0 Trend is Downward
$25,000
$50,000
$5,000
$1,500
($20,000)
$0
Trend is Upward
Trend is Upward
Trend is Upward
Trend is Upward
Trend is Downward
Trend is Upward
The XYZ Company

$324,963
$653,168
$478,466
$492,820
$803,429
$1,145,988
repared by JaxWorks Consultancy, Inc.
Forecast Analysis- 12 Fiscal Periods

Income Statement
Gross Sales
Net Sales
Direct Labor Cost
Other Direct Costs
Total Cost of Sales
Gross Profit
Month
1
$2,010,000
($50,000)
$1,960,000
$320,000
$300,000
$125,000
$745,000
Month
2
$2,560,000
($60,000)
$2,500,000
$427,600
$315,000
$128,750
$871,350
Month
3
$2,721,800
($70,000)
$2,651,800
$431,238
$330,450
$132,613
$894,301
$1,215,000
$1,628,650
$1,757,500
1
$190,000
$50,000
$30,000
$5,000
$3,000
$1,000
$3,906
$2,133
$1,000
$4,000
$6,000
$1,000
$3,000
$8,750
$1,000
$1,000
$1,000
$6,230
$11,974
$0
$329,993
2
$191,000
$51,500
$30,900
$5,150
$3,090
$1,030
$3,754
$2,197
$1,330
$4,120
$6,180
$1,030
$3,090
$9,110
$1,030
$1,030
$1,030
$6,120
$12,374
$0
$335,065
3
$195,000
$53,045
$31,827
$45,305
$3,183
$1,061
$4,010
$2,263
$1,670
$4,244
$6,365
$1,061
$3,183
$9,544
$1,061
$1,061
$1,061
$6,010
$14,186
$0
$385,138
Expenses
Fixed Expenses
Executive Salaries
Advertising
Depreciation
Employee Benefits
Insurance
Bank Charges
Office Expense
Retirement Plans
Rent - Equipment
Repairs
Supplies
Travel
Utilities
Other Expenses

Variable Expenses
Office salaries
Employee benefits
Payroll taxes
Sales and Marketing
Bad debts
Postage
Contributions
Add Item
Add Item
Add Item
Add Item
Add Item
Miscellaneous
1
$90,000
$43,000
$18,000
$14,000
$6,000
$2,110
$100
$5,557
$0
$0
$0
$0
$0
$0
$0
$178,767
2
$102,700
$46,875
$18,540
$14,420
$6,180
$2,680
$103
$5,724
$0
$0
$0
$0
$0
$0
$0
$197,222
3
$112,368
$47,970
$19,096
$14,853
$6,365
$3,005
$106
$5,895
$0
$0
$0
$0
$0
$0
$0
$209,659
Operating expenses
Interest
Depreciation
Amortization
Other
Total expenses
1
$508,760
$16,250
$32,500
$1,250
$0
$558,760
2
$532,287
$16,738
$33,475
$1,288
$0
$583,787
3
$594,797
$17,240
$34,479
$1,326
$0
$647,842
Operating income
$656,240
$1,044,863
$1,109,658
Subtotal
1
$10,000
$20,000
$30,000
2
$10,300
$20,600
$30,900
3
$10,609
$21,218
$31,827
Income before tax
1
$686,240
2
$1,075,763
3
$1,141,485
Income taxes
$205,872
$322,729
$342,445
Net income
$480,368
$753,034
$799,039
$670,368
$944,034
$994,039

Other (net)
Return On Ownership

Balance Sheet
ASSETS
Current Assets
Accounts receivable
Notes receivable
Inventory
Month
1
$451,000
$350,000
$1,200
$400,000
$10,000
$1,212,200
Month
2
$464,530
$460,500
$3,200
$612,000
$10,300
$1,550,530
Month
3
$478,466
$871,315
$3,000
$824,360
$10,609
$2,187,750
Fixed Assets
Land
Buildings
Equipment
Subtotal
Total Fixed Assets
1
$1,000,000
$1,500,000
$800,000
$3,300,000
$400,000
$2,900,000
2
$1,030,000
$1,555,000
$824,000
$3,409,000
$412,000
$2,997,000
3
$1,106,090
$1,591,350
$948,720
$3,646,160
$424,360
$3,221,800
Intangible Assets
Cost
1
$50,000
$20,000
$30,000
2
$51,500
$20,600
$30,900
3
$53,045
$21,218
$31,827
$25,000
$4,167,200
$25,750
$4,604,180
$26,523
$5,467,899
Other assets
Total Assets

Balance Sheet
Current Liabilities
Accounts payable
Notes payable
Income taxes
Accrued expenses
1
$600,000
$100,000
$100,000
$30,000
$90,000
$16,000
$936,000
2
$618,000
$103,000
$103,000
$30,900
$92,700
$16,480
$964,080
3
$636,540
$106,090
$106,090
$31,827
$95,481
$16,974
$993,002
Long-term debt
Deferred income
Sub-total
Total Liabilities
1
$601,200
$100,000
$30,000
$50,000
$781,200
$1,717,200
2
$624,200
$103,000
$30,900
$51,500
$809,600
$1,773,680
3
$645,630
$106,090
$31,827
$53,045
$836,592
$1,829,594
Retained earnings
1
$100,000
$950,000
$1,400,000
$2,450,000
2
$100,000
$678,500
$1,542,000
$2,320,500
3
$100,000
$1,853,045
$1,685,260
$3,638,305
$4,167,200
$4,094,180
$5,467,899

Altman Z-Score Analysis
Publicly Held Firm
Privately Held Firm
Service, Retail, Wholesale
2
2.40
1.35
4.09
3
2.70
1.68
4.83
3.04
1.62
5.89
Prepared by J
There are instances where 4 financial periods are not enough. This worksheet allows you to post
to 12. You will be overwriting forecast formulas, so, be sure you save a backup copy for recovery
Use this worksheet with the Financial Summary sheet to flag problem areas that are magified
Month
4
$3,285,454
($80,000)
$3,205,454
$432,513
$346,364
$136,591
$915,467
Month
5
$3,641,354
($90,000)
$3,551,354
$488,132
$361,589
$140,397
$990,118
Month
6
$4,040,170
($100,000)
$3,940,170
$522,250
$377,043
$144,261
$1,043,553
Month
7
$4,438,986
($110,000)
$4,328,986
$556,367
$392,497
$148,124
$1,096,988
Month
8
$4,837,803
($120,000)
$4,717,803
$590,485
$407,951
$151,988
$1,150,423
Month
9
$5,236,619
($130,000)
$5,106,619
$624,603
$423,405
$155,851
$1,203,859
Month
10
$5,635,435
($140,000)
$5,495,435
$658,721
$438,859
$159,715
$1,257,294
$2,289,987
$2,561,236
$2,896,617
$3,231,998
$3,567,379
$3,902,760
$4,238,141
4
$195,000
$54,636
$32,782
$50,464
$3,278
$1,093
$3,994
$2,331
$2,020
$4,371
$6,556
$1,093
$3,278
$9,929
$1,093
$1,093
$1,093
$5,900
$16,974
$0
$396,977
5
$197,500
$56,159
$33,695
$70,616
$3,370
$1,123
$4,046
$2,396
$2,355
$4,493
$6,739
$1,123
$3,370
$10,326
$1,123
$1,123
$1,123
$5,790
$18,080
$0
$424,549
6
$199,400
$57,704
$34,623
$88,270
$3,462
$1,154
$4,098
$2,462
$2,695
$4,616
$6,925
$1,154
$3,462
$10,723
$1,154
$1,154
$1,154
$5,680
$19,761
$0
$449,651
7
$201,300
$59,250
$35,550
$105,925
$3,555
$1,185
$4,150
$2,528
$3,035
$4,740
$7,110
$1,185
$3,555
$11,120
$1,185
$1,185
$1,185
$5,570
$21,442
$0
$474,754
8
$203,200
$60,795
$36,477
$123,580
$3,648
$1,216
$4,202
$2,594
$3,375
$4,864
$7,295
$1,216
$3,648
$11,517
$1,216
$1,216
$1,216
$5,460
$23,124
$0
$499,856
9
$205,100
$62,340
$37,404
$141,234
$3,740
$1,247
$4,254
$2,659
$3,715
$4,987
$7,481
$1,247
$3,740
$11,914
$1,247
$1,247
$1,247
$5,350
$24,805
$0
$524,959
10
$207,000
$63,886
$38,332
$158,889
$3,833
$1,278
$4,306
$2,725
$4,055
$5,111
$7,666
$1,278
$3,833
$12,311
$1,278
$1,278
$1,278
$5,240
$26,486
$0
$550,061
4
$118,647
$51,249
$19,669
$15,298
$6,556
$3,493
$109
$6,072
$0
$0
$0
$0
$0
$0
$0
$221,095
5
$129,831
$53,734
$20,217
$15,724
$6,739
$3,941
$112
$6,241
$0
$0
$0
$0
$0
$0
$0
$236,540
6
$139,392
$56,318
$20,774
$16,157
$6,925
$4,388
$115
$6,413
$0
$0
$0
$0
$0
$0
$0
$250,482
7
$148,953
$58,902
$21,330
$16,590
$7,110
$4,836
$118
$6,585
$0
$0
$0
$0
$0
$0
$0
$264,424
8
$158,514
$61,487
$21,886
$17,023
$7,295
$5,283
$122
$6,757
$0
$0
$0
$0
$0
$0
$0
$278,366
9
$168,075
$64,071
$22,443
$17,455
$7,481
$5,731
$125
$6,929
$0
$0
$0
$0
$0
$0
$0
$292,308
10
$177,636
$66,655
$22,999
$17,888
$7,666
$6,178
$128
$7,100
$0
$0
$0
$0
$0
$0
$0
$306,250
4
$618,071
$17,757
$35,514
$1,366
$0
$672,707
5
$661,089
$18,252
$36,503
$1,404
$0
$717,248
6
$700,134
$18,754
$37,508
$1,443
$0
$757,838
7
$739,178
$19,256
$38,512
$1,481
$0
$798,428
8
$778,222
$19,758
$39,517
$1,520
$0
$839,018
9
$817,267
$20,261
$40,521
$1,559
$0
$879,607
10
$856,311
$20,763
$41,526
$1,597
$0
$920,197
$1,617,279
$1,843,988
$2,138,779
$2,433,570
$2,728,362
$3,023,153
$3,317,944
4
$10,927
$31,855
$42,782
5
$11,232
$32,464
$43,695
6
$11,541
$36,082
$47,623
7
$11,850
$39,700
$51,550
8
$12,159
$43,318
$55,477
9
$12,468
$46,936
$59,404
10
$12,777
$50,554
$63,332
4
$1,660,061
5
$1,887,683
6
$2,186,402
7
$2,485,120
8
$2,783,839
9
$3,082,557
10
$3,381,276
$498,018
$566,305
$655,921
$745,536
$835,152
$924,767
$1,014,383
$1,162,043
$1,321,378
$1,530,481
$1,739,584
$1,948,687
$2,157,790
$2,366,893
$1,357,043
$1,518,878
$1,729,881
$1,940,884
$2,151,887
$2,362,890
$2,573,893
Month
4
$492,820
$1,382,454
$3,400
$937,091
$10,927
$2,826,692
Month
5
$506,553
$1,643,112
$4,300
$1,149,271
$11,232
$3,314,467
Month
6
$520,492
$1,993,930
$4,940
$1,331,634
$11,541
$3,862,537
Month
7
$534,432
$2,344,748
$5,580
$1,513,997
$11,850
$4,410,607
Month
8
$548,371
$2,695,565
$6,220
$1,696,361
$12,159
$4,958,676
Month
9
$562,311
$3,046,383
$6,860
$1,878,724
$12,468
$5,506,746
Month
10
$576,251
$3,397,201
$7,500
$2,061,087
$12,777
$6,054,816
4
$1,109,273
$1,739,091
$874,182
$3,722,545
$437,091
$3,285,454
5
$1,162,318
$1,784,766
$948,542
$3,895,625
$449,271
$3,446,354
6
$1,202,709
$1,860,128
$983,268
$4,046,104
$461,634
$3,584,470
7
$1,243,099
$1,935,490
$1,017,995
$4,196,584
$473,997
$3,722,586
8
$1,283,490
$2,010,852
$1,052,721
$4,347,063
$486,361
$3,860,703
9
$1,323,881
$2,086,214
$1,087,448
$4,497,543
$498,724
$3,998,819
10
$1,364,272
$2,161,576
$1,122,174
$4,648,022
$511,087
$4,136,935
4
$54,636
$21,855
$32,782
5
$56,159
$22,464
$33,695
6
$57,704
$23,082
$34,623
7
$59,250
$23,700
$35,550
8
$60,795
$24,318
$36,477
9
$62,340
$24,936
$37,404
10
$63,886
$25,554
$38,332
$27,318
$6,172,246
$28,079
$6,822,596
$28,852
$7,510,481
$29,625
$8,198,367
$30,398
$8,886,253
$31,170
$9,574,138
$31,943
$10,262,024
4
$640,563
$109,273
$109,273
$32,782
$98,345
$17,484
$1,007,719
5
$658,833
$112,318
$112,318
$33,695
$101,086
$17,971
$1,036,220
6
$672,856
$115,409
$115,454
$34,636
$103,868
$18,465
$1,060,628
7
$686,879
$118,499
$118,568
$35,570
$106,649
$18,960
$1,085,037
8
$700,902
$121,590
$121,659
$36,498
$109,431
$19,454
$1,109,445
9
$714,925
$124,681
$124,784
$37,435
$112,213
$19,949
$1,133,853
10
$728,948
$127,772
$127,886
$38,366
$114,995
$20,443
$1,158,261
4
$668,308
$109,273
$32,782
$54,636
$864,999
$1,872,718
5
$690,523
$112,318
$33,695
$56,159
$892,695
$1,928,916
6
$712,799
$115,409
$34,623
$57,704
$920,534
$1,981,162
7
$735,074
$118,499
$35,550
$59,250
$948,373
$2,033,409
8
$757,350
$121,590
$36,477
$60,795
$976,212
$2,085,656
9
$779,625
$124,681
$37,404
$62,340
$1,004,051
$2,137,903
10
$801,901
$127,772
$38,332
$63,886
$1,031,890
$2,190,150
4
$100,000
$2,469,710
$1,729,818
$4,299,528
5
$100,000
$2,921,233
$1,872,448
$4,893,680
6
$100,000
$3,494,600
$1,985,719
$5,580,319
7
$100,000
$4,067,968
$2,098,990
$6,266,958
8
$100,000
$4,641,335
$2,212,262
$6,953,597
9
$100,000
$5,214,703
$2,325,533
$7,640,236
10
$100,000
$5,788,070
$2,438,805
$8,326,875
$6,172,246
$6,822,596
$7,561,481
$8,300,367
$9,039,253
$9,778,138
$10,517,024
5
3.51
1.88
7.02
6
3.83
2.01
7.92
7
4.20
2.16
8.91
8
4.57
2.31
9.89
9
4.93
2.47
10.88
10
5.30
2.62
11.86
5.67
2.77
12.85
to post additional periods up

recovery.
magified over time.
Month
11
$6,034,251
($150,000)
$5,884,251
$692,838
$454,313
$163,578
$1,310,729
Month
12
$6,433,067
($160,000)
$6,273,067
$726,956
$469,767
$167,442
$1,364,164
$4,573,522
$4,908,903
11
$208,900
$65,431
$39,259
$176,543
$3,926
$1,309
$4,358
$2,791
$4,395
$5,235
$7,852
$1,309
$3,926
$12,708
$1,309
$1,309
$1,309
$5,130
$28,167
$0
$575,163
12
$210,800
$66,977
$40,186
$194,198
$4,019
$1,340
$4,410
$2,857
$4,735
$5,358
$8,037
$1,340
$4,019
$13,105
$1,340
$1,340
$1,340
$5,020
$29,848
$0
$600,266
11
$187,196
$69,239
$23,555
$18,321
$7,852
$6,626
$131
$7,272
$0
$0
$0
$0
$0
$0
$0
$320,192
12
$196,757
$71,823
$24,112
$18,753
$8,037
$7,073
$134
$7,444
$0
$0
$0
$0
$0
$0
$0
$334,134
11
$895,355
$21,265
$42,530
$1,636
$0
$960,787
12
$934,400
$21,767
$43,535
$1,674
$0
$1,001,376
$3,612,735
$3,907,526
11
$13,086
$54,173
$67,259
12
$13,395
$57,791
$71,186
11
$3,679,994
12
$3,978,712
$1,103,998
$1,193,614
$2,575,996
$2,785,099
$2,784,896
$2,995,899
Month
11
$590,190
$3,748,019
$8,140
$2,243,450
$13,086
$6,602,886
Month
12
$604,130
$4,098,837
$8,780
$2,425,813
$13,395
$7,150,955
11
$1,404,663
$2,236,938
$1,156,900
$4,798,501
$523,450
$4,275,051
12
$1,445,053
$2,312,301
$1,191,627
$4,948,981
$535,813
$4,413,167
11
$65,431
$26,173
$39,259
12
$66,977
$26,791
$40,186
$32,716
$10,949,910
$33,488
$11,637,795
11
$742,970
$130,863
$130,994
$39,298
$117,776
$20,938
$1,182,669
12
$756,993
$133,953
$134,090
$40,227
$120,558
$21,433
$1,207,077
11
$824,176
$130,863
$39,259
$65,431
$1,059,729
$2,242,397
12
$846,451
$133,953
$40,186
$66,977
$1,087,567
$2,294,644
11
$100,000
$6,361,438
$2,552,076
$9,013,513
12
$100,000
$6,934,805
$2,665,347
$9,700,152
$11,255,910
$11,994,795
11
12
6.04
2.92
13.84
6.40
3.07
14.82
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
Income Statement
Net Sales
Cost of Goods Sold
Gross Profit (Margin)
G&A
Total Operating Expenses
EBIT*
Net Income After
Ownership**
Balance Sheet
Current Assets
Inventory
Other Assets
Total Assets
Current Liabilities
Non-current Liabilities
Total Liabilities
Equity
Cash Flow
Net Cash Flow
Key Ratios
Current Ratio
Quick Ratio
Debt Ratio
Asset Turnover
Net Income/Sales
Debt/Equity
Return on Assets
Working Capital
Sales/Working Capital
Market Value
Book Market Value
Plus Ownership**
Altman Z-Score Analysis
Publicly Held Firm
Privately Held Firm
Non-Manufacturing
Month
Month
Month
Month
$1,960,000
$745,000
$1,215,000
$178,767
$558,760
$686,240
$480,368
$670,368
$2,500,000
$871,350
$1,628,650
$197,222
$583,787
$1,075,763
$753,034
$944,034
$2,651,800
$894,301
$1,757,500
$209,659
$647,842
$1,141,485
$799,039
$994,039
$3,205,454
$915,467
$2,289,987
$221,095
$672,707
$1,660,061
$1,162,043
$1,357,043
$1,212,200
$400,000
$10,000
$4,167,200
$936,000
$781,200
$1,717,200
$2,450,000
$1,550,530
$612,000
$10,300
$4,604,180
$964,080
$809,600
$1,773,680
$2,320,500
$2,187,750
$824,360
$10,609
$5,467,899
$993,002
$836,592
$1,829,594
$3,638,305
$2,826,692
$937,091
$10,927
$6,172,246
$1,007,719
$864,999
$1,872,718
$4,299,528
$90,360
$289,233
$614,196
$1,267,364
1.30
0.87
0.41
0.47
0.25
0.70
0.15
$276,200
7.10
1.61
0.97
0.39
0.54
0.30
0.76
0.24
$586,450
4.26
2.20
1.37
0.33
0.48
0.30
0.50
0.18
$1,194,748
2.22
2.81
1.88
0.30
0.52
0.36
0.44
0.23
$1,818,973
1.76
$2,450,000
$3,120,368
$2,830,500
$3,774,534
$3,638,305
$4,632,344
$4,299,528
$5,656,570
2.40
1.35
4.09
2.70
1.68
4.83
3.04
1.62
5.89
3.51
1.88
7.02
*EBIT is Earnings Before Interest and Taxes

**Ownership is the Total Reward for being the owner=Owner Salary + Bonus + Net Income + Other
Income Statement
Smoothing Forecast - 8 Periods
Net Sales
Cost of Goods Sold
Gross Profit (Margin)
G&A
Total Operating Expenses
EBIT*
Net Income After
Ownership**
ancial Summary Analysis
Month
Month
Month
Month
Trend
ASSESSMENT
$3,641,354
$990,118
$2,651,236
$236,540
$717,248
$1,887,683
$1,321,378
$1,518,878
$3,314,467
$1,149,271
$11,232
$6,822,596
$1,036,220
$892,695
$1,928,916
$4,893,680
$1,529,282
3.20
2.09
0.28
0.53
0.36
0.39
0.23
$2,278,247
1.60
$4,893,680
$6,412,558
3.83
2.01
7.92
Forecast
$4,040,170
$4,438,986
$1,043,553
$1,096,988
$2,996,617
$3,341,998
$250,482
$264,424
$757,838
$798,428
$2,186,402
$2,485,120
$1,530,481
$1,739,584
$1,729,881
$1,940,884
Forecast
$3,862,537
$4,410,607
$1,331,634
$1,513,997
$11,541
$11,850
$7,510,481
$8,198,367
$1,060,628
$1,085,037
$920,534
$948,373
$1,981,162
$2,033,409
$5,580,319
$6,266,958
Forecast
$1,914,880
$2,300,477
Forecast
3.64
4.06
2.39
2.67
0.26
0.25
0.54
0.54
0.38
0.39
0.36
0.32
0.24
0.24
$2,801,909
$3,325,570
1.44
1.33
Forecast
$5,529,319
$6,164,957
$7,259,200
$8,105,842
Forecast
4.20
4.57
2.16
2.31
8.91
9.89
$4,837,803
$1,150,423
$3,687,379
$278,366
$839,018
$2,783,839
$1,948,687
$2,151,887
Upward
Upward
Upward
Upward
Upward
Upward
Upward
Upward
$4,958,676
$1,696,361
$12,159
$8,886,253
$1,109,445
$976,212
$2,085,656
$6,953,597
Upward
Upward
Upward
Upward
Upward
Upward
Upward
Upward
$2,686,075
Upward
4.47
2.94
0.23
0.54
0.40
0.30
0.25
$3,849,232
1.26
Upward
Upward
Downward
Upward
Upward
Downward
Upward
Upward
Downward
$6,800,596
$8,952,483
Upward
Upward
4.93
2.47
10.88
Upward
Upward
Upward
Balance Sheet
Smoothing Forcast - 8 Periods
Current Assets
Total Assets
Total Liabilities
Inventory
Current Liabilities
Equity
Other Assets
Non-current Liabilities
pared by JaxWorks Consultancy, Inc.
The XYZ Company

6200 XYZ Drive
Phone: (000) 000-0000
FAX: (000) 000-0000
November 20, 2014
Comparative Income Statement - 4 Periods
Sales Revenue
Cost of Sales
Income Details
Gross Profit
Month
2
%
$2,010,000
($50,000)
Net Sales
Other Expenses
Month
$
Gross Sales
Fixed Expenses
102.55%
-2.55%
$2,560,000
($60,000)
Income Before Tax
Month
3
%
102.40%
-2.40%
$2,721,800
($70,000)
$1,960,000
100.00%
$2,500,000
100.00%
$2,651,800
$320,000
16.33%
$427,600
17.10%
$431,238
Direct Labor Cost
$300,000
15.31%
$315,000
12.60%
$330,450
Other Direct Costs
$125,000
6.38%
$128,750
5.15%
$132,613
$745,000
38.01%
$871,350
34.85%
$894,301
$1,215,000
61.99%
$1,628,650
65.15%
$1,757,500
Total Cost of Sales

Gross Profit
Expenses
Fixed Expenses
Executive Salaries
$190,000
9.69%
$191,000
7.64%
$195,000
Advertising
$50,000
2.55%
$51,500
2.06%
$53,045
$30,000
1.53%
$30,900
1.24%
$31,827
Depreciation
$5,000
0.26%
$5,150
0.21%
$45,305
Employee Benefits
$3,000
0.15%
$3,090
0.12%
$3,183
$1,000
0.05%
$1,030
0.04%
$1,061
Insurance
$3,906
0.20%
$3,754
0.15%
$4,010
Bank Charges
$2,133
0.11%
$2,197
0.09%
$2,263
$1,000
0.05%
$1,330
0.05%
$1,670
$4,000
0.20%
$4,120
0.16%
$4,244
Office Expense
$6,000
0.31%
$6,180
0.25%
$6,365
Retirement Plans
$1,000
0.05%
$1,030
0.04%
$1,061
Rent - Equipment
$3,000
0.15%
$3,090
0.12%
$3,183
$8,750
0.45%
$9,110
0.36%
$9,544
Repairs
$1,000
0.05%
$1,030
0.04%
$1,061
Sales Revenue
Cost of Sales
Gross Profit
Fixed Expenses
Other Expenses
Month
Month
Income Before Tax
Month
3
Supplies
$1,000
0.05%
$1,030
0.04%
$1,061
$1,000
0.05%
$1,030
0.04%
$1,061
$6,230
0.32%
$6,120
0.24%
$6,010
$11,974
0.61%
$12,374
0.49%
$14,186
Travel
Utilities
Other Expenses
$0
0.00%
$0
0.00%
$0
$329,993
16.84%
$335,065
13.40%
$385,138
Sales Revenue
Cost of Sales
Gross Profit
Fixed Expenses
Other Expenses
Income Before Tax
Month
Month
Month
Variable Expenses
Office salaries
$90,000
4.59%
$102,700
4.11%
$112,368
Employee benefits
$43,000
2.19%
$46,875
1.88%
$47,970
Payroll taxes
$18,000
0.92%
$18,540
0.74%
$19,096
Sales and Marketing
$14,000
0.71%
$14,420
0.58%
$14,853
$6,000
0.31%
$6,180
0.25%
$6,365
$2,110
0.11%
$2,680
0.11%
$3,005
$100
0.01%
$103
0.00%
$106
$5,557
0.28%
$5,724
0.23%
$5,895
Contributions
$0
0.00%
$0
0.00%
$0
Add Item
$0
0.00%
$0
0.00%
$0
Add Item
$0
0.00%
$0
0.00%
$0
Add Item
$0
0.00%
$0
0.00%
$0
Add Item
$0
0.00%
$0
0.00%
$0
Add Item
$0
0.00%
$0
0.00%
$0
$178,767
9.12%
$197,222
7.89%
$209,659
Operating expenses
Bad debts
Postage
$508,760
25.96%
$532,287
21.29%
$594,797
Interest
$16,250
0.83%
$16,738
0.67%
$17,240
Depreciation
$32,500
1.66%
$33,475
1.34%
$34,479
Amortization
$1,250
0.06%
$1,288
0.05%
$1,326
$0
0.00%
$0
0.00%
$0
Total expenses
Other
$558,760
28.51%
$583,787
23.35%
$647,842
Operating income
$656,240
33.48%
$1,044,863
41.79%
$1,109,658
$10,000
0.51%
$10,300
0.41%
$10,609
Other (net)
$20,000
1.02%
$20,600
0.82%
$21,218
$30,000
1.53%
$30,900
1.24%
$31,827
Income before tax
$686,240
35.01%
$1,075,763
43.03%
$1,141,485
Income taxes
$205,872
10.50%
$322,729
12.91%
$342,445
Subtotal
Sales Revenue
Cost of Sales
Gross Profit
Fixed Expenses
Other Expenses
Income Before Tax
Month
Month
Month
Net income
$480,368
24.51%
$753,034
30.12%
$799,039
Return On Ownership
$670,368
34.20%
$944,034
37.76%
$994,039
November 20, 2014
Income Before Tax
Income Taxes
Net Income (Loss)
Month
Month
4
%
102.64%
-2.64%
$3,285,454
($80,000)
%
100.00%
-2.43%
100.00%
$3,205,454
97.57%
16.26%
$432,513
13.49%
12.46%
$346,364
10.81%
5.00%
$136,591
4.26%
33.72%
$915,467
28.56%
66.28%
$2,289,987
71.44%
7.35%
$195,000
6.08%
2.00%
$54,636
1.70%
1.20%
$32,782
1.02%
1.71%
$50,464
1.57%
0.12%
$3,278
0.10%
0.04%
$1,093
0.03%
0.15%
$3,994
0.12%
0.09%
$2,331
0.07%
0.06%
$2,020
0.06%
0.16%
$4,371
0.14%
0.24%
$6,556
0.20%
0.04%
$1,093
0.03%
0.12%
$3,278
0.10%
0.36%
$9,929
0.31%
0.04%
$1,093
0.03%
Income Before Tax
Income Taxes
Month
Net Income (Loss)
Month
4
0.04%
$1,093
0.03%
0.04%
$1,093
0.03%
0.23%
$5,900
0.18%
0.53%
$16,974
0.53%
0.00%
$0
0.00%
14.52%
$396,977
12.38%
Income Before Tax
Income Taxes
Net Income (Loss)
Month
Month
4.24%
$118,647
3.70%
1.81%
$51,249
1.60%
0.72%
$19,669
0.61%
0.56%
$15,298
0.48%
0.24%
$6,556
0.20%
0.11%
$3,493
0.11%
0.00%
$109
0.00%
0.22%
$6,072
0.19%
0.00%
$0
0.00%
0.00%
$0
0.00%
0.00%
$0
0.00%
0.00%
$0
0.00%
0.00%
$0
0.00%
0.00%
$0
0.00%
7.91%
$221,095
6.90%
22.43%
$618,071
19.28%
0.65%
$17,757
0.55%
1.30%
$35,514
1.11%
0.05%
$1,366
0.04%
0.00%
$0
0.00%
24.43%
$672,707
20.99%
41.85%
$1,617,279
50.45%
0.40%
$10,927
0.34%
0.80%
$31,855
0.99%
1.20%
$42,782
1.33%
43.05%
$1,660,061
51.79%
12.91%
$498,018
15.54%
Income Before Tax
Income Taxes
Net Income (Loss)
Month
Month
4
30.13%
$1,162,043
36.25%
37.49%
$1,357,043
42.34%
The XYZ Company

6200 XYZ Drive
Phone: (000) 000-0000
FAX: (000) 000-0000
November 20, 2014
Comparative Balance Sheet - 4 Periods
Total Fixed Assets
Total Assets
Month
$
Month
1
ASSETS
Total Liabilities
Month
2
%
3
%
Current Assets
$451,000
10.82%
$464,530
10.09%
$478,466
Accounts receivable
$350,000
8.40%
$460,500
10.00%
$871,315
$1,200
0.03%
$3,200
0.07%
$3,000
$400,000
9.60%
$612,000
13.29%
$824,360
Notes receivable
Inventory
$10,000
0.24%
$10,300
0.22%
$10,609
$1,212,200
29.09%
$1,550,530
33.68%
$2,187,750
Land
$1,000,000
24.00%
$1,030,000
22.37%
$1,106,090
Buildings
$1,500,000
36.00%
$1,555,000
33.77%
$1,591,350
$800,000
19.20%
$824,000
17.90%
$948,720
$3,300,000
79.19%
$3,409,000
74.04%
$3,646,160

Fixed Assets
Equipment
Subtotal
$400,000
9.60%
$412,000
8.95%
$424,360
$2,900,000
69.59%
$2,997,000
65.09%
$3,221,800
Cost
$50,000
1.20%
$51,500
1.12%
$53,045
$20,000
0.48%
$20,600
0.45%
$21,218
$30,000
0.72%
$30,900
0.67%
$31,827
$25,000
0.60%
$25,750
0.56%
$26,523
Total Fixed Assets

Intangible Assets
Other assets
Total All Other Assets
Total Assets
$55,000
1.32%
$56,650
1.36%
$58,350
$4,167,200
100.00%
$4,604,180
100.00%
$5,467,899
Comparative Balance Sheet - 4 Periods
Total Fixed Assets
Total Assets
Total Liabilities
Month
Month
Month

Current Liabilities
Accounts payable
$600,000
14.40%
$618,000
15.09%
$636,540
Notes payable
$100,000
2.40%
$103,000
2.52%
$106,090
$100,000
2.40%
$103,000
2.52%
$106,090
Income taxes
$30,000
0.72%
$30,900
0.75%
$31,827
Accrued expenses
$90,000
2.16%
$92,700
2.26%
$95,481
$16,000
0.38%
$16,480
0.40%
$16,974
$936,000
22.46%
$964,080
23.55%
$993,002
Long-term debt
$601,200
14.43%
$624,200
15.25%
$645,630
Deferred income
$100,000
2.40%
$103,000
2.52%
$106,090
$30,000
0.72%
$30,900
0.75%
$31,827
$50,000
1.20%
$51,500
1.26%
$53,045
$1,717,200
41.21%
$1,773,680
43.32%
$1,829,594
$100,000
2.40%
$100,000
2.44%
$100,000
Number of shares issued
$100,000
2.40%
$100,000
2.44%
$100,000
$950,000
22.80%
$678,500
16.57%
$1,853,045

Total Liabilities
$1,400,000
33.60%
$1,542,000
37.66%
$1,685,260
Retained earnings
$2,450,000
58.79%
$2,320,500
56.68%
$3,638,305
$4,167,200
100.00%
$4,094,180
100.00%
$5,467,899
November 20, 2014
Month
Month
4
%
8.75%
$492,820
7.98%
15.94%
$1,382,454
22.40%
0.05%
$3,400
0.06%
15.08%
$937,091
15.18%
0.19%
$10,927
0.18%
40.01%
$2,826,692
45.80%
20.23%
$1,109,273
17.97%
29.10%
$1,739,091
28.18%
17.35%
$874,182
14.16%
66.68%
$3,722,545
60.31%
7.76%
$437,091
7.08%
58.92%
$3,285,454
53.23%
0.97%
$54,636
0.89%
0.39%
$21,855
0.35%
0.58%
$32,782
0.53%
0.49%
$27,318
0.44%
1.40%
$60,100
1.44%
100.00%
$6,172,246
100.00%
Month
Month
11.64%
$640,563
10.38%
1.94%
$109,273
1.77%
1.94%
$109,273
1.77%
0.58%
$32,782
0.53%
1.75%
$98,345
1.59%
0.31%
$17,484
0.28%
18.16%
$1,007,719
16.33%
11.81%
$668,308
10.83%
1.94%
$109,273
1.77%
0.58%
$32,782
0.53%
0.97%
$54,636
0.89%
33.46%
$1,872,718
30.34%
1.83%
$100,000
1.62%
1.83%
$100,000
1.62%
33.89%
$2,469,710
40.01%
30.82%
$1,729,818
28.03%
66.54%
$4,299,528
69.66%
100.00%
$6,172,246
100.00%
ared by JaxWorks Consultancy, Inc.
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,
used, multiple discriminant analysis method is the one proposed by Edward Altman, Professor of Finance at
Business, New York University, The Z-Score Analysis or Zeta Model. Despite the positive results of his study,
a key weakness: it assumed variables in the sample data to be normally distributed. "If all variables are not
the methods employed may result in selection of an inappropriate set of predictors". Chistine Zavgren developed
corrected for this problem. Her model used logit analysis to predict bankruptcy. Due to its use of logit analysis,
considered "more robust". Further, logit analysis actually provides a probability (in terms of a percentage) of bankruptcy
probability calculated might be considered a measure of the effectiveness of management, i.e. effective management
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,
multiplied by a coefficient unique to that ratio. This coefficient can be either positive or negative. Third, the
summed together (y). Finally, the probability of bankruptcy for a firm is calculated as the inverse of (1 + ey) where
of natural logarithms."Explanatory variables with a negative coefficient increase the probability of bankruptcy because
ey toward zero, with the result that the bankruptcy probability function approaches 1/1, or 100 percent. Likewise,
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

Logit Analysis: The Model
Chistine Zavgren
Cash
Accounts Receivable
Inventory
Fixed Assets
Total Assets
Current Liabilities
Long Term Debt
Sales
Income from Continuing Operations
Month
1
$451,000
$10,000
$350,000
$400,000
$2,900,000
$4,167,200
$936,000
$601,200
$1,960,000
$656,240
Month
2
$464,530
$10,300
$460,500
$612,000
$2,997,000
$4,604,180
$964,080
$624,200
$2,500,000
$1,044,863
Month
3
$478,466
$10,609
$871,315
$824,360
$3,221,800
$5,467,899
$993,002
$645,630
$2,651,800
$1,109,658
Month
4
$492,820
$10,927
$1,382,454
$937,091
$3,285,454
$6,172,246
$1,007,719
$668,308
$3,205,454
$1,617,279
Month
1
0.23883
-0.022
-1.385
-1.193
2.663
0.099
-0.809
0.068
-0.340
Month
2
0.23883
-0.026
-1.191
-1.112
2.982
0.140
-0.746
0.077
0.362
Month
3
0.23883
-0.034
-1.673
-0.964
4.211
0.121
-0.628
0.066
1.338
Month
4
0.23883
-0.032
-2.335
-0.880
5.754
0.152
-0.563
0.069
2.404
58.42%
41.04%
20.78%
8.28%
Logit Analysis
Constant
Inventories/Sales
Receivables/Inventory
Cash+Marketable Securities/Total Assets
Quick Assets/Current Liabilities
Income from CO/(Total Assets-Current Liab)
Long-Term Debt/(Total Assets-Current Liab)
Sales/(Net Working Capital+Fixed Assets)
Sum of Coefficients * Ratios
Probability of Bankruptcy
iction of Corporate Failure
ogit Analysis: The Model

Chistine Zavgren
known, and most-widely
Finance at the Stern School of
study, Altmans model had
not normally distributed,
developed a model that
logit analysis, her model is
of bankruptcy. Also, the
management will not lead
calculated. Second, each ratio is

the resulting values are
ey) where "e" is the base
bankruptcy because they reduce
. Likewise, independent
lure: The State of the Art, Journal of Accounting Literature
iction of Corporate Failure
ogit Analysis: The Model

Chistine Zavgren
ared by JaxWorks Consultancy, Inc.

Overview
The XYZ Company
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 pa
and partly a science. Computing the value of the company's tangible assets usually poses no major problem, but assigni
to the intangibles such as goodwill, almost always creates controversy. The seller expects goodwill to reflect the hard
long hours invested in building the business. The buyer, however, is willing to pay extra only for those intangible a
produce exceptional income. So, how can the buyer and the seller arrive at a fair price? There are few universa
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 companys value using several techniques and then choose the one that makes
sense.
The deal must be financially feasible for both parties. The seller must be satisfied with the price received for the
Frequently, the entrepreneur feels like he is selling his baby. So, he does not want to leave a dime on the table. But,
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 comm
is to get an established asset base. It is much easier to buy assets than to build them. Evaluation methods should t
characteristics into consideration. However, too many business sellers and buyers depend on rules of thumb that ignore t
features of small companies. For example, cable TV franchises are valued at 11 times cash flow; advertising agenc
percent of gross income; day care centers at $500 to $1,000 per child enrolled; motels at $12,300 to $14,600 per r
garbage pickup routes at two and one half times gross income. The problem is that such one size fits-all approaches sel
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
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
recommended because it oversimplifies the valuation process. This method computes the company's net worth or owne
(net worth = assets - liabilities) and uses this figure as the value. The problem with this technique is that it fails to recogn
Most small businesses have market values that exceed their reported book values.
The first step is to determine which assets are included in the sale. In most cases, the owner has some personal asset
not want to sell. Remember that net worth on a financial statement will likely differ significantly from actual net worth in the

Overview
The XYZ Company

Variation: Adjusted Balance Sheet Technique. A more realistic method for determining a company's value is to adjus
value of net worth to reflect actual market value. The values reported on a companys books may overstate or understat
value of assets and liabilities. Typical assets in a business sale include notes and accounts receivable, inventories, sup
fixtures. If a buyer purchases notes and accounts receivable, he should estimate the likelihood of their collection and a
value accordingly.
In manufacturing, wholesale, and retail businesses, inventory usually is the largest single asset involved in the sale.
physical inventory count is the best way to determine accurately the quantity of goods to be transferred. The sale may inc
types of inventory, each having its own method of valuation: raw materials, work in-process, and finished goods. The buye
seller must arrive at a method for evaluating the inventory First-in-first-out (FIFO), last-in-first out (LIFO), and average c
three frequently used techniques, but the most common methods use the cost of last purchase and the replacement va
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 d
that most of the lumber in a warehouse they had neglected to inspect was warped and was of little value as building ma
bargain price they paid for the business turned out not to be the good deal they had expected. To avoid such problem
buyers insist on having a knowledgeable representative on an inventory team that counts the inventory and checks its
Nearly every sale involves merchandise that cannot be sold; but, by taking this precaution, a buyer minimizes the chanc
stuck with worthless inventory.
Fixed assets transferred in a sale might include land, buildings, equipment, and fixtures. Business owners frequently
estate and buildings at prices well below their actual market value. Equipment and fixtures, depending on their con
usefulness, may increase or decrease the true value of the business. Appraisals of these assets on insurance policies a
guidelines for establishing market value.
Business evaluations based on balance sheet method suffer one major drawback: they do not consider the future earning
of the business. These techniques value assets at current prices and do not consider them as tools for creating future pr
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 b
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 liabilitie
estimate of its future earnings potential to determine a business's selling price. One advantage of this technique is that it
estimate of goodwill. Goodwill is an intangible asset that often creates problems in a business sale. In fact, the most
method of valuing a business is to compute its tangible net worth and then to add an often arbitrary adjustment for go
essence, goodwill is the difference between an established, successful business and one that has yet to prove itself. It is
the companys reputation and its ability to attract customers. A buyer should not accept blindly the seller's arbitrary adjus
goodwill because it is likely to be inflated.
The excess earnings method provides a more consistent and realistic approach for determining the value of goodwill. It
goodwill by the amount of profit the business earns above the average firm in the same industry. It also assumes that the
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.

Overview
The XYZ Company

Opportunity Costs represent the cost of forgoing a choice. If the buyer chooses to purchase the assets of a business,
invest his money elsewhere. So, the opportunity cost of the purchase would be the amount the buyer could earn by inv
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) a
premium, and (3) the risk allowance for investing in the particular business. The basic, risk free return and the inflation
are reflected in investments like U. S. Treasury bonds. To determine the appropriate rate of return for investing in a bus
buyer must add to this base rate a factor reflecting the risk involved in purchasing the company. The greater the risk, the
rate of return. A normal-risk business typically indicates a 25 percent rate of return.

Overview
The XYZ Company
The second part of the buyers 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 subtr
owner's salary. Averages can be misleading, so the buyer must be sure to investigate the trend of net earnings. Have
steadily over the past five years, dropped significantly remained relatively constant, or fluctuated wildly? The more er
earnings are, the more they will be discounted. Past income statements provide useful guidelines for estimating earnings.
Step 4: Compute extra earning power. A companys extra earning power is the difference between forecasted earning
and total opportunity costs (step 2). Most small businesses that are for sale do not have extra earning power (i.e
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 v
intangible assets- that is, goodwill. Multiplying the extra earning power by a years of profit figure yields an estimate of the
assets value. The years of profit figure for a normal risk business ranges from three to four. A very high-risk business m
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 adjuste
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 fo
is taxed as ordinary income. The buyer cannot count this amount as a deduction because goodwill is a capital asset that
depreciated or amortized for tax purposes. Instead, the buyer would prefer to pay the seller for signing a covenant not to
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 doe
systematic method for assigning a value to goodwill.
Variation 2: Capitalized Earnings Approach. Another earnings approach capitalizes expected net profits to determine th
a business. The buyer should prepare his own pro forma income statement and should ask the seller to prepare one al
five year weighted average of past sales (with the greatest weights assigned to the most recent years) to estimate sal
upcoming year.
Once again, the buyer must evaluate the risk involved in purchasing the business to determine the appropriate rate of retu
investment. The greater the risk involved, the higher the return the buyer requires. Risk determination is always s
subjective, but it is necessary for proper evaluation. The capitalized earnings approach divides estimated net earni
subtracting the owner's reasonable salary) by the rate of return that reflects the risk level. For example, the capitali
(assuming a reasonable salary of $25,000) would be:
net earnings ( after deducting owner's salary)
____________________________________
rate of return 25%
Clearly, firms with lower risk factors are more valuable. Most normal risk businesses use a rate of return factor rangin
percent to 33 percent. The lowest risk factor most buyers would accept for any business ranges from 15 to 20 percent.

Overview
The XYZ Company

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 do
Therefore, using this approach, the buyer estimates the company's net income for several years into the future and then
these future earnings back to their present value. The resulting present value is an estimate of the company's worth. Th
value of future dollars has nothing to do with inflation. Instead, present value represents the cost of the buyer givin
opportunity to earn a reasonable rate of return by receiving income in the future instead of today. To illustrate the importa
time value of money, consider two $1 million sweepstake winners. Rob wins $1 million in a sweepstakes, but he rec
$50,000 installments over 20 years. If Rob invested every installment at 15 percent interest, he would have acc
$5,890,505.98 at the end of 20 years. Lisa wins $1 million in another sweepstakes, but she collects her winnings in a lum
Lisa invested her $1 million today at 15 percent. She would have accumulated $16,366,537.39 at the end of twenty y
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 t
three forecasts-an optimistic, a pessimistic, and a most likely for each year and then find a weighted average using the for
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 potenti
reliability depends on making forecasts of future earnings and on choosing a realistic present value rate. The discounted
technique is especially well-suited for valuing service businesses (whose asset bases are often small) and for c
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
The buyer must use businesses whose stocks are publicly traded to get a meaningful comparison. A company's price
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
preferred stock dividends). To get a representative P/E ratio, the buyer should average the P/Es of as many similar busin
possible. To compute the company's value, the buyer multiplies the average price/earnings ratio by the private c
estimated earnings.
The biggest advantage of the market approach is its simplicity. But, this method suffers from several disadvantages, inc
following:
Necessary comparisons between publicly traded and privately owned companies. The stock of privately owned com
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 po
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 c
when estimating the appropriate P/E ratio.

Overview
The XYZ Company

Applying the after-tax earnings of a private company to determine its value. If a prospective buyer is using an after-tax
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
The XYZ Company

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

Overview
The XYZ Company
determining an acceptable price for the business. Business valuation is partly an art
e company's tangible assets usually poses no major problem, but assigning a price
ways creates controversy. The seller expects goodwill to reflect the hard work and
The buyer, however, is willing to pay extra only for those intangible assets that
e buyer and the seller arrive at a fair price? There are few universal rules in
arties should observe the following guidelines.
a business's worth since each business sale is unique.
ys value using several techniques and then choose the one that makes the most
h parties. The seller must be satisfied with the price received for the business.
elling his baby. So, he does not want to leave a dime on the table. But, the buyer
require heavy borrowing and would strain cash flows from the outset.
business records.
ould deal with one another honestly and in good faith.
usinesses is to get their future earning potential. The second most common reason
h easier to buy assets than to build them. Evaluation methods should take these
many business sellers and buyers depend on rules of thumb that ignore the unique
able TV franchises are valued at 11 times cash flow; advertising agencies at 75
$500 to $1,000 per child enrolled; motels at $12,300 to $14,600 per room; and
s gross income. The problem is that such one size fits-all approaches seldom work
sses is "Don't use rules of thumb to value businesses. If you rely on these rules too
nesses sell for one third less than the accepted industry rule of thumb.
most commonly used methods of evaluating a business, although it is not highly

luation process. This method computes the company's net worth or owner's equity
gure as the value. The problem with this technique is that it fails to recognize reality:
exceed their reported book values.
included in the sale. In most cases, the owner has some personal assets he does
financial statement will likely differ significantly from actual net worth in the market.

Overview
The XYZ Company

ue. A more realistic method for determining a company's value is to adjust the book
e. The values reported on a companys books may overstate or understate the true
a business sale include notes and accounts receivable, inventories, supplies, and
nts receivable, he should estimate the likelihood of their collection and adjust their
esses, inventory usually is the largest single asset involved in the sale. Taking a
rmine accurately the quantity of goods to be transferred. The sale may include three
of valuation: raw materials, work in-process, and finished goods. The buyer and the
e inventory First-in-first-out (FIFO), last-in-first out (LIFO), and average costing are
common methods use the cost of last purchase and the replacement value of the
, the buyer should evaluate the condition of the goods.
hout examining the inventory completely. After completing the sale, they discovered
ad neglected to inspect was warped and was of little value as building material. The
d out not to be the good deal they had expected. To avoid such problems, some
sentative on an inventory team that counts the inventory and checks its condition.
nnot be sold; but, by taking this precaution, a buyer minimizes the chance of being
de land, buildings, equipment, and fixtures. Business owners frequently carry real
r actual market value. Equipment and fixtures, depending on their condition and
value of the business. Appraisals of these assets on insurance policies are helpful
method suffer one major drawback: they do not consider the future earning potential
s at current prices and do not consider them as tools for creating future profits. The
ess is based on its expected future earnings.
y purchasing its future income. The earnings approach is more refined because it
iness.
ach.
thod combines both the value of the firm's existing assets (over its liabilities) and an
rmine a business's selling price. One advantage of this technique is that it offers an
asset that often creates problems in a business sale. In fact, the most common
s tangible net worth and then to add an often arbitrary adjustment for goodwill. In
established, successful business and one that has yet to prove itself. It is based on
ct customers. A buyer should not accept blindly the seller's arbitrary adjustment for
consistent and realistic approach for determining the value of goodwill. It measures
arns above the average firm in the same industry. It also assumes that the owner is
usted tangible net worth..
er should compute the firm's adjusted tangible net worth.

) minus total liabilities yields adjusted tangible net worth.
ting in the business.

Overview
The XYZ Company

ng a choice. If the buyer chooses to purchase the assets of a business, he cannot
y cost of the purchase would be the amount the buyer could earn by investing the
te of return used to value a business: (1) the basic, risk free return, (2) an inflation
ng in the particular business. The basic, risk free return and the inflation premium
y bonds. To determine the appropriate rate of return for investing in a business, the
ing the risk involved in purchasing the company. The greater the risk, the higher the
ndicates a 25 percent rate of return.

Overview
The XYZ Company

is the salary she could earn working for someone else.
estimate the company's net earnings for the upcoming year before subtracting the
o the buyer must be sure to investigate the trend of net earnings. Have they risen
nificantly remained relatively constant, or fluctuated wildly? The more erratic your
Past income statements provide useful guidelines for estimating earnings.
panys extra earning power is the difference between forecasted earnings (step 3)
mall businesses that are for sale do not have extra earning power (i.e., excess
owner can use the extra earning power of the business to estimate the value of its
he extra earning power by a years of profit figure yields an estimate of the intangible
rmal risk business ranges from three to four. A very high-risk business may have a
ed firm might use a figure of 7.
o determine the value of the business, the buyer simply adds the adjusted tangible
es (step 5).
ax implications of transferring goodwill. The amount the seller receives for goodwill
count this amount as a deduction because goodwill is a capital asset that cannot be
ead, the buyer would prefer to pay the seller for signing a covenant not to compete
e accuracy of the buyer's estimates of net earnings and risk. But, it does offer a
dwill.
nother earnings approach capitalizes expected net profits to determine the value of
pro forma income statement and should ask the seller to prepare one also. Use a
the greatest weights assigned to the most recent years) to estimate sales for the
volved in purchasing the business to determine the appropriate rate of return on the
e higher the return the buyer requires. Risk determination is always somewhat
luation. The capitalized earnings approach divides estimated net earnings (after
the rate of return that reflects the risk level. For example, the capitalized value
ld be:
valuable. Most normal risk businesses use a rate of return factor ranging from 25
ost buyers would accept for any business ranges from 15 to 20 percent.

Overview
The XYZ Company

ach.
mes that a dollar earned in the future is worth less than that same dollar today.
ates the company's net income for several years into the future and then discounts
ue. The resulting present value is an estimate of the company's worth. The reduced
inflation. Instead, present value represents the cost of the buyer giving up thc
by receiving income in the future instead of today. To illustrate the importance of the
sweepstake winners. Rob wins $1 million in a sweepstakes, but he receives it in
invested every installment at 15 percent interest, he would have accumulated
s $1 million in another sweepstakes, but she collects her winnings in a lump sum. If
nt. She would have accumulated $16,366,537.39 at the end of twenty years. The
e value of money.
volves five steps.
o the future.
y a constant amount over the next five years. Perhaps a better method is to develop
a most likely for each year and then find a weighted average using the formula.
he future he forecasts, the less reliable are his estimates .
ppropriate present value rate.

e he could earn on a similar risk investment.
e years.
ar income by 1/rate of return.
ve years using the present value factor for the sixth year.
hat it values a business solely on the basis of its future earning potential, but its
e earnings and on choosing a realistic present value rate. The discounted cash flow
g service businesses (whose asset bases are often small) and for companies
the price/earnings ratios of similar businesses to establish the value of a company.

s are publicly traded to get a meaningful comparison. A company's price/earnings
its common stock in the market divided by its earnings per share (after deducting
tive P/E ratio, the buyer should average the P/Es of as many similar businesses as
the buyer multiplies the average price/earnings ratio by the private company's
is its simplicity. But, this method suffers from several disadvantages, including the
ed and privately owned companies. The stock of privately owned companies is

n subjective and lower than that of publicly held companies.
ate company's net earnings may not realistically reflect its true earning potential. To
profits low and rely on fringe benefits to make up the difference.
en, it is extremely difficult for a buyer to find comparable publicly held companies

Overview
The XYZ Company

mpany to determine its value. If a prospective buyer is using an after-tax P/E ratio
ax earnings from the private company.
useful as a general guideline to establishing a company's value.

Overview
The XYZ Company
ng the value of a small business? Simply stated, there is no single best method.
science. Using these techniques, a range of values will emerge. Buyers should look
use their best judgment to determine their offering price.
epared by JaxWorks Consultancy, Inc.

Balance Sheet Technique
Book Value of Net Worth
=
=
=
Adjusted Net Worth
=
=
=
Assets minus Liabilities

$4,167,200
$2,450,000
Adjusted Balance Sheet Technique

Adjusted Assets minus Liabilities
$3,601,700
$1,884,500
Earnings Approach
Variation 1 - Excess Earnings Method
Step 1 Adjusted tangible net worth equals
equals
Step 2 Opportunity Costs
equals
Step 3 Estimated net earnings
= equals
Step 4 Extra earning power=estimated net earnings-opportunity cost =
equals
Step 5 Value of intangibles=extra earning power X years of profit figure =
equals
Step 6 Value of business tangible net worth + value of intangibles =
equals
Variation 2 - Capitalized Earnings Approach
net earnings
Value = ---------------------------------------------------------------
Value = ---------------------------------------------------------------
Value =
Variation 3 - Discounted Future Earnings Approach
Step 1
Projected future earnings approach
Year
5
6
7
8
9
Step 2
Pessimistic
$1,281,737
$1,484,567
$1,687,397
$1,890,226
$2,093,056
Discount future earnings at the appropriate present value factor

Year
5
6
7
Forecasted Earnings
$1,325,783
$1,535,583
$1,745,383

8
9
$1,955,183
$2,164,983

Step 3
Estimate income stream beyond 4 years
Income Stream = Fourth year income X
=
=
$2,164,983
$8,659,931
Step 4
Discount income stream beyond four years (using fifth year present value
Present value of income stream =
equals
Step 5
Compute the Total Value

Total Value =
Total Value =
Total Value =
Step 2 + Step 4
$3,737,878
$5,343,083
Market Approach
Value = estimated earnings x Representative price-earnings ratio
Value =
$1,325,783
Times
Value =
$11,012,121
Summary of Approaches
Balance Sheet Technique
Adjusted Balance Sheet Technique
Earnings Approach
Variation 1
Variation 2
Variation 3
Market Approach
Average
Median
Market Value Estimates
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000

$4,000,000
$2,000,000
$0
Balance Sheet
Technique
Adjusted Balance
Sheet Technique
Earnings Approach
Assets minus Liabilities

$1,717,200
Adjusted Assets minus Liabilities

$1,717,200
$3,601,700
$1,884,500
$596,125
$1,325,783
Extra earning power=estimated net earnings-opportunity cost =
$729,658
Value of intangibles=extra earning power X years of profit figure =
$3,648,290
Value of business tangible net worth + value of intangibles =
$5,532,790
minus
$1,717,200
net earnings
-------------------------------------------------------------------rate of return
$1,325,783
--------------------------------------------------------------------0.25
$5,303,132
Most Likely
$1,321,378
$1,530,481
$1,739,584
$1,948,687
Optimistic
$1,387,447
$1,607,005
$1,826,563
$2,046,121
Weighted Average
$1,325,783
$1,535,583
$1,745,383
$1,955,183
$2,157,790
$2,265,679
$2,164,983
Total
$8,726,914
Discount future earnings at the appropriate present value factor

X
X
X
X
Present Value Factor

0.8000
0.6400
0.5120
= Net Present Value

$1,060,626
$982,773
$893,636
X
X
0.4096
0.3277
$800,843
$709,465
Total
$3,737,878
1
-------------Rate of Return
4.00
Discount income stream beyond four years (using fifth year present value factor)
$8,659,931
$1,605,205
0.1854
$1,605,205
estimated earnings x Representative price-earnings ratio

8.3
Base Price
Base Price + Intangibles
$2,450,000
$2,582,000
$1,884,500
$2,016,500
$5,532,790
$5,664,790
$5,303,132
$5,435,132
$5,343,083
$5,475,083
$11,012,121
$11,144,121
$5,254,271
$5,386,271
$5,323,107
$5,455,107
Market Value Estimates
Earnings Approach
Market Approach
The XYZ Company

6200 XYZ Drive
Phone: (000) 000-0000
FAX: (000) 000-0000
November 20, 2014
Comparative Payroll Analysis
Payroll Analysis
What-if P
This analysis uses simple direct proportions.
Refer to it as a payroll performance snapshot in positive & negative situations.
Use the spinners to e
37
CURRENT SALES ANNUALIZED (Weekly X 52 Weeks)
$3,399,968
CURRENT SALES ANNUALIZED (Weekly X 5
CURRENT COMPLETED YEAR SALES
$3,285,454
CURRENT PAYROLL ANNUALIZED (Weekly X 52 Weeks)
$350,064
CURRENT PAYROLL ANNUALIZED (Weekly
PRIOR YEAR PAYROLL
$313,647
PRIOR YEAR PAYROLL
SALES VOLUME REQUIRED, AT CURRENT
EQUAL TO THE PREVIOUS YEAR PROFITS--------
EQUAL TO THE PREVIOUS YEAR PROFITS
$3,666,922
SALES DEFICIENCY = SALES REQUIRED M
SALES DEFICIENCY IS---------------
($266,954)
UNDER PROJECTED CONDITIONS-----
$324,579
($25,485)
UNDER PROJECTED CONDITIONS----OR
-8.1%
THE NUMBER OF NEEDED EMPLOYEES ON THE PAYROLL . . . . . . . . . . . . . . . . . . . . . . . -3.01

.....
THE NUMBER OF EXCESS EMPLOYEES ON
November 20, 2014
rative Payroll Analysis

Reset Spinners
Calculator
What-if Payroll Analysis

What-if Analysis
Use the spinners to experiment with the payroll demand.
37
CURRENT SALES ANNUALIZED (Weekly X 52 Weeks)
$3,399,968
100%
$3,285,454
100%
$350,064
100%
$313,647
100%
CURRENT PAYROLL ANNUALIZED (Weekly X 52 Weeks)

EQUAL TO THE PREVIOUS YEAR PROFITS--------
$3,666,922

($266,954)

UNDER PROJECTED CONDITIONS-----
$324,579
($25,485)
OR
THE NUMBER OF EXCESS EMPLOYEES ON THE PAYROLL . . . . . . . . . . . . . . . . . . . . . . . . . . . .
red by JaxWorks Consultancy, Inc.
-8.1%
-3.01
The XYZ Company

6200 XYZ Drive
Phone: (000) 000-0000
FAX: (000) 000-0000
November 20, 2014
COMPANY STOCK VALUATION

Return on incremental investment beginning 3rd Year
Plowback rate beginning 3rd Year
Weighted average cost of capital
Tax rate
20%
30%
12%
30%
Month
1
Sales
Earnings before interest and taxes (EBIT)
Taxes on EBIT
EBIAT
Current assets less marketable securities
Current liabilities
Adjusted net working capital
$1,112,200
$936,000
$176,200
Gross property, plant and equipment

Accumulated depreciation
Net property, plant and equipment
$3,300,000
$400,000
$2,900,000
Invested capital
$3,076,200
EBIAT
Less change in invested capital
Free cash flow
Terminal value
Total
PV factor
PV of cash flow and terminal value
Cumulative PV
Enterprise value
Plus marketable securities
Less short-term debt
Less long-term debt
Equity value
Divide by number of shares outstanding
Value per share
$11,089,274
$100,000
($936,000)
($601,200)
$9,652,074
100,000
$96.52
November 20, 2014
MPANY STOCK VALUATION
Month
2
Month
3
Month
4
$2,560,000
$1,075,763
($322,729)
$753,034
$2,721,800
$1,141,485
($342,445)
$799,039
$3,285,454
$1,660,061
($498,018)
$1,162,043
$1,450,530
$964,080
$486,450
$2,087,750
$993,002
$1,094,748
$3,409,000
$412,000
$2,997,000
$3,646,160
$424,360
$3,221,800
$3,483,450
$4,316,548
$753,034
($407,250)
$345,784
$799,039
($833,098)
($34,058)
$345,784
89.29%
$308,736
$308,736
($34,058)
79.72%
($27,151)
$281,585
$4,665,160
$1,162,043
($348,613)
$813,430
$14,370,595
$15,184,025
71.18%
$10,807,689
$11,089,274
The XYZ Company

6200 XYZ Drive
Phone: (000) 000-0000
FAX: (000) 000-0000
November 20, 2014
Breakdown of Operating Costs

TOTAL OPERATING COSTS
COMPARATIVE PERIODS
Total For Period
Month
Month
Month
Month
$745,000
$871,350
1 DAY
$2,041
$2,387
$2,450
$2,508
$2,713
1 HOUR
$85.05
$99.47
$102.09
$104.51
$113.03
$1.42
$1.66
$1.70
$1.74
$1.88
1 MINUTE
$894,301
Trend
$915,467
$990,118
LABOR EXPENSE
COMPARATIVE PERIODS
Total For Period
Month
Month
Month
Month
$300,000
1 DAY
1 HOUR
$315,000
$330,450
Trend
5
$346,364
$361,589
$822
$863
$905
$949
$991
$34.25
$35.96
$37.72
$39.54
$41.28
$0.57
$0.60
$0.63
$0.66
$0.69
1 MINUTE
MATERIAL EXPENSE
COMPARATIVE PERIODS
Total For Period
Month
Month
Month
Month
$320,000
$427,600
$431,238
$432,513
$488,132
1 DAY
1 HOUR
Trend
$877
$1,172
$1,181
$1,185
$1,337
$36.53
$48.81
$49.23
$49.37
$55.72
$0.61
$0.81
$0.82
$0.82
$0.93
1 MINUTE
OTHER EXPENSES
COMPARATIVE PERIODS
Total For Period
1 DAY
1 HOUR
1 MINUTE
Month
Month
Month
Month
$125,000
$128,750
$132,613
Trend
5
$136,591
$140,397
$342
$353
$363
$374
$385
$14.27
$14.70
$15.14
$15.59
$16.03
$0.24
$0.24
$0.25
$0.26
$0.27
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

Check your Z-Score: How's your Fiscal Fitness?
Routinely used by Stockbrokers trying to determine if a company is a good investment, Bankers to
determine loan risk, and internally, by anyone who wants to take close look at their own company's
financial health.
Data Needed:(Linked From The "Master Data Entry" and Other Worksheets)
Earnings before taxes
Total assets
Net Sales
Total Liabilities
Working Capital
Retained Earnings
The worksheet will indicate:
The short-term potential for financial problems at your company.
The Expert
Edward I. Altman, Professor and Vice-Director of New York University's Salomon Center,
Leonard N. Stern School of Business.
Dr. Altman is known as the founding father of using statistical techniques to predict company failure.
He developed the Z-Score analysis almost 30 years ago, and is the author of several books, including
The Z-Score Bankruptcy Model: Past, Present, and Future (New York: John Wiley & Sons, 1977),
and Corporate Financial Distress and Bankruptcy, 2nd edition (New York: John Wiley & Sons, 1993).
The Analysis
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.
Altman's Z-score calculates five ratios:

1. return on total assets,
2. sales to total assets,
3. equity to debt,
4. working capital to total assets, and
5. retained earnings to total assets.
These ratios are then multiplied by a predetermined weight factor, and the results are added together.
The final number--the Z-score--yields a number between -4 and +8. Financially-sound companies show
Z-scores above 2.99, while those scoring below 1.81 are in fiscal danger, maybe even heading toward
bankruptcy. Scores that fall between these ends indicate potential trouble. In Altman's initial study
of 66 bankrupt companies, Z-scores for 95 % of these companies pointed to trouble or imminent
bankruptcy.
The Altman Z-Score Analysis - Publicly Held Firm

Although the numbers that go into calculating the Z-score (and a company's financial soundness)
are sometimes influenced by external factors, it provides a good quick analysis of where your company
stands compared to the competition, and a good tool for analyzing the ups and downs of your company's
financial stability over time.
The Altman Z-Score Analysis Process

x Weight
Ratio
Sales to Total Assets
Equity to Debt
Working Capital to Total Assets
Retained Earnings to Total Assets
x Weighted
Formula
Factor
Ratio
Earnings Before Interest and Taxes
Varies by
Varies by
Total Assets
Category
Category
Net Sales
Varies by
Varies by
Total Assets
Category
Category
Varies by
Varies by
Total Liabilities
Category
Category
Working Capital
Varies by
Varies by
Total Assets
Category
Category
Retained Earnings
Varies by
Varies by
Total Assets
Category
Category
Your Z-Score if Publicly Held Firm

Month
1
2.40
Month
2
2.70
Month
3
3.04
Month
4
3.51
Publicly Held Firm

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
Z-Score Analysis Publicly Held
Z-Score Analysis - Publicly Held
4.00
3.51
3.50
3.04
3.00
2.70
2.40
2.50
2.00
1.50
1.00
0.50
0.00
Periods
Z-Score Publicly Held
Analysis Publicly Held
3.51
The Altman Z-Score Analysis - Privately Held Firm

financial health.
Total assets
Net Sales
Total Liabilities
Working Capital
Retained Earnings
The Expert
The Analysis
were eliminated.

3. equity to debt,
bankruptcy.
The Altman Z-Score Analysis - Privately Held Firm

x Weight
Ratio
Equity to Debt
x Weighted
Formula
Factor
Ratio
Varies by
Varies by
Total Assets
Category
Category
Net Sales
Varies by
Varies by
Total Assets
Category
Category
Varies by
Varies by
Total Liabilities
Category
Category
Working Capital
Varies by
Varies by
Total Assets
Category
Category
Retained Earnings
Varies by
Varies by
Total Assets
Category
Category
Your Z-Score if Privately Held Firm

Month
1
1.35
Month
2
1.68
Month
3
1.62
Month
4
1.88
Privately Held Firm

KEY:
Z-Score Analysis Privately Held
Z-Score Analysis - Privately Held

1.88
2.00
1.68
1.80
1.62
1.60
1.35
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
Periods
Z-Score Privately Held
Analysis Privately Held
1.88
The Altman Z-Score Analysis - Nonmanufacturing

financial health.
Total assets
Net Sales
Total Liabilities
Working Capital
Retained Earnings
The Expert
The Analysis
were eliminated.

3. equity to debt,
bankruptcy.
The Altman Z-Score Analysis - Nonmanufacturing

x Weight
Ratio
Equity to Debt
x Weighted
Formula
Factor
Ratio
Varies by
Varies by
Total Assets
Category
Category
Net Sales
Varies by
Varies by
Total Assets
Category
Category
Varies by
Varies by
Total Liabilities
Category
Category
Working Capital
Varies by
Varies by
Total Assets
Category
Category
Retained Earnings
Varies by
Varies by
Total Assets
Category
Category
Your Z-Score if Small Business, Service, Retail Sales, or Wholesaler

Month
1
4.09
Month
2
4.83
Month
3
5.89
Month
4
7.02
Nonmanufacturing
KEY:
Z-Score Analysis Nonmanufacturing
Z-Score Analysis - Nonmanufacturing
8.00
7.02
7.00
5.89
6.00
4.83
5.00
4.09
4.00
3.00
2.00
1.00
0.00
Periods
Z-Score Nonmanufacturing
nalysis Nonmanufacturing
7.02
Z-Score Analysis
Category
Altman Z Score - Publicly Held
Altman Z Score - Privately Held
Altman Z Score - Non-manufacturing
2
2.40
1.35
4.09
3
2.70
1.68
4.83
4
3.04
1.62
5.89
3.51
1.88
7.02
Return-on-Investment (ROI) Analysis

Cash flow and ROI statement
BENEFIT DRIVERS
Greater margin driven by higher production capacity
Improved cycle time benefits:
Reduced energy cost due to less running time
Reduced labor cost due to less running time
Fewer accidents, resulting in less workers' compensation
Improved quality benefits:
Fewer defects, resulting in less rework
Fewer customer returns, resulting in less reprocessing costs
Reduced time spent handling customer complaints
<Benefit driver>
<Benefit driver>
<Benefit driver>
<Benefit driver>
Total annual benefits
Implementation filter
Total benefits realized
YEAR
0
1
$500,000
125,000
500,000
100,000
250,000
50,000
50,000
$1,575,000
85%
$1,338,750
Costs
Total
Benefits
Annual benefit flow
Cumulative benefit flow
Discounted benefit flow

Discounted costs
Discounted benefits
Total discounted benefit flow
Total cumulative discounted benefit flow
Initial investment
Initial investment
Implementation costs
Ongoing support costs
Training costs
Other costs
Total costs
Year 0
$1,650,000
Year 1
$125,000
Year 0
($1,650,000)
(1,650,000)
Year 1
$1,213,750
(436,250)
Year 0
$1,650,000
0
(1,650,000)
(1,650,000)
Year 1
$108,696
1,164,130
1,055,435
(594,565)
Year 0
$1,200,000
400,000
0
50,000
0
$1,650,000
Year 1
$0
0
100,000
25,000
0
$125,000
ROI measures
Cost of capital
Net present value
Return on investment
Payback (in years)
15%
$2,223,632
66%
1.24
Return on investment
YEAR
2
$1,000,000
3
$1,250,000
125,000
500,000
100,000
125,000
500,000
100,000
300,000
75,000
75,000
300,000
75,000
75,000
$2,175,000
90%
$1,957,500
$2,425,000
95%
$2,303,750
Year 2
$125,000
Year 3
$125,000
Year 2
$1,832,500
1,396,250
Year 3
$2,178,750
3,575,000
Year 2
$94,518
1,480,151
1,385,633
791,068
Year 3
$82,190
1,514,753
1,432,563
2,223,632
Year 2
Year 3
$0
0
100,000
25,000
0
$125,000
143%
$0
0
100,000
25,000
0
$125,000
215%
Small Business Headcount and Payroll Analysis

HEADCOUNT SUMMARY
Executive
Owner
Chief financial officer
Open
Total
Finance
Financial Analyst
Credit Analyst
Open
Total
Human Resources
Director
Open
Open
Total
Information Technology
Director
Open
Total
Accounting
Controller
Open
Total
Sales
Sales Manager
Sales Representatives
Open
Total
Q1
Q2
Q3
1.00
1.00
1.00
1.00
1.00
1.00
2.00
2.00
2.00
1.00
1.00
1.00
1.00
1.00
1.00
2.00
2.00
2.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
2.00
1.00
2.00
1.00
2.00
3.00
3.00
3.00
Small Business Headcount and Payroll Analysis

HEADCOUNT SUMMARY
Operations
Director
Open
Total
Marketing
Director
Open
Total
Corporate totals
Q1
Q2
Q3
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
12.00
12.00
12.00
SUMMARY DATA BY DEPARTMENT

Department
Executive
Finance
Human Resources
Accounting
Sales
Operations
Marketing
Corporate Totals
Department
Executive
Finance
Human Resources
Accounting
Sales
Operations
Marketing
Corporate Totals
Total number
of employees
8
8
4
4
4
12
4
0
44
Total number
of employees
8
8
4
4
4
12
4
0
44
Total salary
$150,000
55,000
40,000
40,000
30,000
158,000
30,000
35,000
$538,000
% of total
18.2%
18.2%
9.1%
9.1%
9.1%
27.3%
9.1%
0.0%
100.0%
Q4
Annual total
1.00
1.00
2.00
1.00
1.00
2.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
2.00
3.00
Annual
salary
Q1 cost
Q2 cost
Q3 cost
Q4 cost
4.00
4.00
0.00
8.00
$100,000
50,000
$25,000
12,500
0
$37,500
$25,000
12,500
0
$37,500
$25,000
12,500
0
$37,500
$25,000
12,500
0
$37,500
4.00
4.00
0.00
8.00
$30,000
25,000
$7,500
6,250
0
$13,750
$7,500
6,250
0
$13,750
$7,500
6,250
0
$13,750
$7,500
6,250
0
$13,750
4.00
0.00
0.00
4.00
$40,000
$10,000
0
0
$10,000
$10,000
0
0
$10,000
$10,000
0
0
$10,000
$10,000
0
0
$10,000
4.00
0.00
4.00
$40,000
$10,000
0
$10,000
$10,000
0
$10,000
$10,000
0
$10,000
$10,000
0
$10,000
4.00
0.00
4.00
$30,000
$7,500
0
$7,500
$7,500
0
$7,500
$7,500
0
$7,500
$7,500
0
$7,500
4.00
8.00
0.00
12.00
$40,000
59,000
$10,000
29,500
0
$39,500
$10,000
29,500
0
$39,500
$10,000
29,500
0
$39,500
$10,000
29,500
0
$39,500
Q4
Annual total
1.00
Annual
salary
Q1 cost
Q2 cost
Q3 cost
Q4 cost
4.00
0.00
4.00
$30,000
$7,500
0
$7,500
$7,500
0
$7,500
$7,500
0
$7,500
$7,500
0
$7,500
$35,000
1.00
4.00
0.00
0.00
$8,750
0
$8,750
$8,750
0
$8,750
$8,750
0
$8,750
$8,750
0
$8,750
12.00
44.00
$134,500
$134,500
$134,500
$134,500
1.00
1.00
$37,500
13,750
10,000
10,000
7,500
39,500
7,500
8,750
Salary +
benefits
$187,500
68,750
50,000
50,000
37,500
197,500
37,500
43,750
$134,500
$672,500
Benefits
Total comp
Variable
compensation %
15.0%
6.0%
5.0%
5.0%
5.0%
20.0%
10.0%
5.0%
Variable
pay
$22,500
3,300.00
2,000.00
2,000.00
1,500.00
31,600.00
3,000.00
1,750.00
Stock-based
compensation
$20,000
5,000.00
0.00
0.00
0.00
0.00
0.00
0.00
$67,650
$25,000
% of total
$230,000
77,050
52,000
52,000
39,000
229,100
40,500
45,500
30.1%
10.1%
6.8%
6.8%
5.1%
29.9%
5.3%
5.9%
$765,150
100.0%
Quarterly metrics:
Salary
Q1
Q2
Q3
Q4
$134,500
134,500
134,500
134,500
$538,000
Benefits
$33,625
33,625
33,625
33,625
$134,500
Salary + benefits
$168,125
168,125
168,125
168,125
$672,500
Annual cost
$100,000
50,000
0
$150,000
$30,000
25,000
0
$55,000
$40,000
0
0
$40,000
$40,000
0
$40,000
$30,000
0
$30,000
$40,000
118,000
0
$158,000
Annual cost
$30,000
0
$30,000
$35,000
0
$35,000
$538,000
Total compensation
$230,000
77,050.00
52,000.00
52,000.00
39,000.00
229,100.00
40,500.00
45,500.00
$765,150
Corporate Headcount and Payroll Analysis

HEADCOUNT SUMMARY
Executive
Chief executive officer
Chief financial officer
Chief operating officer
Chief information officer
President
Total
Finance
Vice president
Financial planning director
Financial analyst
Credit analyst
Advisor
Total
Human Resources
Vice president
Director
Senior human resource representative
Benefits coordinator
Compensation manager
Human resource generalist
Payroll
Trainer
Recruiter
Total
Vice president
Director
Systems engineer
Systems analyst
Technician
Support
Architect
Programmer
Total
Accounting
Vice president
Controller
Q1
Q2
Q3
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
5.00
5.00
5.00
1.00
1.00
2.00
1.00
1.00
1.00
1.00
2.00
1.00
1.00
1.00
1.00
2.00
1.00
1.00
6.00
6.00
6.00
1.00
1.00
2.00
1.00
2.00
2.00
1.00
1.00
1.00
2.00
1.00
2.00
2.00
1.00
1.00
1.00
2.00
1.00
2.00
2.00
1.00
10.00
10.00
10.00
1.00
1.00
2.00
1.00
1.00
2.00
1.00
1.00
1.00
1.00
2.00
1.00
1.00
2.00
1.00
1.00
1.00
1.00
2.00
1.00
2.00
2.00
1.00
1.00
10.00
10.00
11.00
1.00
1.00
1.00
1.00
1.00
1.00

HEADCOUNT SUMMARY
Q1
Q2
Q3
Accounting manager
Accounts receivable
Accounts payable
Treasury
General accountant
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
Total
7.00
7.00
7.00
1.00
2.00
1.00
4.00
1.00
1.00
1.00
1.00
2.00
1.00
4.00
1.00
1.00
1.00
1.00
2.00
1.00
4.00
1.00
1.00
1.00
11.00
11.00
11.00
Sales
Vice president
Regional director
Business development
Direct sales representative
Inside sales
Sales operations
Channel sales representative
Total

HEADCOUNT SUMMARY
Operations
Vice president
Director
Manager
Floor manager
Assistant
Total
Marketing
Vice president
Director
Product manager
Market research
Market analyst
Product manager
Merchandiser
Assistant
Total
Corporate totals
Q1
Q2
Q3
1.00
1.00
1.00
5.00
1.00
1.00
1.00
1.00
5.00
1.00
1.00
1.00
1.00
5.00
1.00
9.00
9.00
9.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
8.00
8.00
8.00
66.00
66.00
67.00
SUMMARY DATA BY DEPARTMENT

Department
Executive
Finance
Human Resources
Accounting
Sales
Operations
Marketing
Corporate Totals
Department
Executive
Finance
Human Resources
Accounting
Total number
of employees
20
24
40
42
28
44
36
20
254
Total number
of employees
20
24
40
42
28
Total salary
$1,240,000
680,000
835,000
950,000
540,000
1,000,000
705,000
690,000
$6,640,000
% of total
7.9%
9.4%
15.7%
16.5%
11.0%

HEADCOUNT SUMMARY
Q1
Q2
Q3
Sales
Operations
Marketing
44
36
20
17.3%
14.2%
7.9%
Corporate Totals
254
100.0%
Q4
Annual total
1.00
1.00
1.00
1.00
1.00
Annual
salary
Q1 cost
Q2 cost
Q3 cost
Q4 cost
4.00
4.00
4.00
4.00
4.00
0.00
20.00
$300,000
250,000
225,000
225,000
240,000
$75,000
62,500
56,250
56,250
60,000
0
$310,000
$75,000
62,500
56,250
56,250
60,000
0
$310,000
$75,000
62,500
56,250
56,250
60,000
0
$310,000
$75,000
62,500
56,250
56,250
60,000
0
$310,000
4.00
4.00
8.00
4.00
4.00
0.00
24.00
$200,000
125,000
100,000
70,000
85,000
$50,000
31,250
50,000
17,500
21,250
0
$170,000
$50,000
31,250
50,000
17,500
21,250
0
$170,000
$50,000
31,250
50,000
17,500
21,250
0
$170,000
$50,000
31,250
50,000
17,500
21,250
0
$170,000
4.00
4.00
8.00
4.00
8.00
8.00
4.00
0.00
0.00
0.00
40.00
$140,000
100,000
80,000
75,000
75,000
65,000
65,000
65,000
65,000
$35,000
25,000
40,000
18,750
37,500
32,500
16,250
0
0
0
$205,000
$35,000
25,000
40,000
18,750
37,500
37,500
16,250
0
0
0
$210,000
$35,000
25,000
40,000
18,750
37,500
37,500
16,250
0
0
0
$210,000
$35,000
25,000
40,000
18,750
37,500
37,500
16,250
0
0
0
$210,000
$140,000
110,000
90,000
90,000
80,000
75,000
80,000
80,000
11.00
4.00
4.00
8.00
4.00
6.00
8.00
4.00
4.00
0.00
42.00
$35,000
27,500
45,000
22,500
20,000
37,500
20,000
20,000
0
$227,500
$35,000
27,500
45,000
22,500
20,000
37,500
20,000
20,000
0
$227,500
$35,000
27,500
45,000
22,500
40,000
37,500
20,000
20,000
0
$247,500
$35,000
27,500
45,000
22,500
40,000
37,500
20,000
20,000
0
$247,500
1.00
1.00
4.00
4.00
$130,000
95,000
$32,500
23,750
$32,500
23,750
$32,500
23,750
$32,500
23,750
5.00
1.00
1.00
2.00
1.00
1.00
6.00
1.00
1.00
2.00
1.00
2.00
2.00
1.00
10.00
1.00
1.00
2.00
1.00
2.00
2.00
1.00
1.00
Q4
Annual total
1.00
1.00
1.00
1.00
1.00
7.00
1.00
2.00
1.00
4.00
1.00
1.00
1.00
11.00
Annual
salary
Q1 cost
Q2 cost
Q3 cost
Q4 cost
4.00
4.00
4.00
4.00
4.00
0.00
28.00
75,000
55,000
55,000
75,000
55,000
18,750
13,750
13,750
18,750
13,750
0
$135,000
18,750
13,750
13,750
18,750
13,750
0
$135,000
18,750
13,750
13,750
18,750
13,750
0
$135,000
18,750
13,750
13,750
18,750
13,750
0
$135,000
4.00
8.00
4.00
16.00
4.00
4.00
4.00
0.00
44.00
$120,000
100,000
90,000
90,000
75,000
75,000
80,000
$30,000
50,000
22,500
90,000
18,750
18,750
20,000
0
$250,000
$30,000
50,000
22,500
90,000
18,750
18,750
20,000
0
$250,000
$30,000
50,000
22,500
90,000
18,750
18,750
20,000
0
$250,000
$30,000
50,000
22,500
90,000
18,750
18,750
20,000
0
$250,000
Q4
Annual total
1.00
1.00
1.00
5.00
1.00
Annual
salary
Q1 cost
Q2 cost
Q3 cost
Q4 cost
4.00
4.00
4.00
20.00
4.00
0.00
36.00
$150,000
100,000
85,000
65,000
45,000
$37,500
25,000
21,250
81,250
11,250
0
$176,250
$37,500
25,000
21,250
81,250
11,250
0
$176,250
$37,500
25,000
21,250
81,250
11,250
0
$176,250
$37,500
25,000
21,250
81,250
11,250
0
$176,250
$135,000
105,000
90,000
75,000
75,000
90,000
70,000
50,000
8.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
0.00
20.00
$33,750
26,250
22,500
18,750
18,750
22,500
17,500
12,500
0
$172,500
$33,750
26,250
22,500
18,750
18,750
22,500
17,500
12,500
0
$172,500
$33,750
26,250
22,500
18,750
18,750
22,500
17,500
12,500
0
$172,500
$33,750
26,250
22,500
18,750
18,750
22,500
17,500
12,500
0
$172,500
67.00
254.00
$1,646,250
$1,651,250
$1,671,250
$1,671,250
9.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
$310,000
170,000
208,750
237,500
135,000
250,000
176,250
172,500
Salary +
benefits
$1,550,000
850,000
1,043,750
1,187,500
675,000
1,250,000
881,250
862,500
$1,660,000
$8,300,000
Benefits
Total comp
$1,936,000
968,000
1,085,500
1,235,000
702,000
Variable
compensation %
15.0%
10.0%
5.0%
5.0%
5.0%
40.0%
10.0%
5.0%
Variable
pay
$186,000
68,000.00
41,750.00
47,500.00
27,000.00
400,000.00
70,500.00
34,500.00
$875,250
Stock-based
compensation
$200,000
50,000.00
0.00
0.00
0.00
0.00
0.00
0.00
$250,000
% of total
20.5%
10.3%
11.5%
13.1%
7.4%
Quarterly metrics:
Salary
Benefits
Salary + benefits
Q4
Annual total
1,650,000
951,750
897,000
17.5%
10.1%
9.5%
$9,425,250
100.0%
Annual
salary
Q1 cost
Q1
Q2
Q3
Q4
Q2 cost
Q3 cost
$1,646,250
1,651,250
1,671,250
1,671,250
$6,640,000
$411,563
412,813
417,813
417,813
$1,660,000
Q4 cost
$2,057,813
2,064,063
2,089,063
2,089,063
$8,300,000
Annual cost
$300,000
250,000
225,000
225,000
240,000
0
$1,240,000
$200,000
125,000
200,000
70,000
85,000
0
$680,000
$140,000
100,000
160,000
75,000
150,000
145,000
65,000
0
0
0
$835,000
$140,000
110,000
180,000
90,000
120,000
150,000
80,000
80,000
0
$950,000
$130,000
95,000
Annual cost
75,000
55,000
55,000
75,000
55,000
0
$540,000
$120,000
200,000
90,000
360,000
75,000
75,000
80,000
0
$1,000,000
Annual cost
$150,000
100,000
85,000
325,000
45,000
0
$705,000
$135,000
105,000
90,000
75,000
75,000
90,000
70,000
50,000
0
$690,000
$6,640,000
Total compensation
$1,936,000
968,000.00
1,085,500.00
1,235,000.00
702,000.00
1,650,000.00
951,750.00
897,000.00
$9,425,250
Annual cost
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Other Direct Costs

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Income before tax

Other income and expenses

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Cash and cash equivalents

LIABILITIES AND STOCKHOLDERS' EQUITY

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Amount sheet is out-of-balance

Summary Extractions & Additional Data Entries

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Cash Flow Data Entries

Financing Data (0 on)

Other income and expenses

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Income before tax

Depreciation: Enter the numbers of years.

Interest: Percentages from Data sheet

Detailed Supporting Information

Cash Flow Balance Sheet Entries

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Total Liabilities and Equity

"C" Corporation (Y/N)

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CASH FLOW DATA ENTRY

'C' Corporation format selected; income taxes WILL b

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The XYZ Company

Financial Health MicroShots

Z Score: Publicly Held

Z Score: Privately Held

The Altman Z-Score is routinely used by

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CASH FLOW STATEMENT 4 PERIODS

Net cash from financing

Net increase (decrease) in cash

Cash at beginning of period

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Cash at the end of period

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