Micro Shots 2010

Since 1996, JaxWorks has offered a suite of Free Excel workbooks and spreadsheets, and ass documents, that cover a number of financial, accounting and sales functions. These are invalua Also included Free are: - business plan tools, including spreadsheets and excellent instructions - Excel functions glossary and guide; - free training courses for most Microsoft Office applications. These guides are in PDF format and rival commercial books! - comprehensive list of acronyms, ratios and formulas in customer financial analysis, and financial terms; - suite of online calculators, including, breakeven analysis, productivity analysis, business evaluation; - Altman Z-Score (covering publicly and privately held firms, and small businesses); - and payroll analysis.

If you are involved in financial analysis at any level, or want to learn more about MS Excel and o suite this site is invaluable.

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preadsheets, and associated MS Word, PDF and HTML ons. These are invaluable small business tools.

ides are in

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sheet Factory

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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.

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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 Financial 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

Master Data Entry Z-Score Analysis Z-Score Analysis Z-Score Explained Z-Score Analysis (1) Z-Score Analysis (2) Z-Score Analysis (3) Z-Score (1) Chart Z-Score (2) Chart Z-Score (3) Chart

License Agreement Special Analysis Market Value Explained Market Value Analysis Return-on-investment analysis SB Headcount Analysis Corporate Headcount Analysis



Income StatementSales & Cost of Sales Gross Sales Discounts/Allowances Net Sales Direct Material Cost Direct Labor Cost Other Direct Costs Total Cost of Sales 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 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 1 $90,000 $43,000 $18,000 $14,000 $6,000 $2,110 $100 $5,557 $0 $0 $0 $0 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 2 $102,700 $46,875 $18,540 $14,420 $6,180 $2,680 $103 $5,724 $0 $0 $0 $0 Month 1 $2,010,000 ($50,000) $1,960,000 $320,000 $300,000 $125,000 $745,000 $1,215,000 Month 2 $2,560,000 ($60,000) $2,500,000 $427,600 $315,000 $128,750 $871,350 $1,628,650


Add Item Add Item Miscellaneous Total Variable Expenses

$0 $0 $0 $178,767 1 $508,760 $16,250 $32,500 $1,250 $0 $558,760 $656,240 1 $10,000 $20,000 $30,000

$0 $0 $0 $197,222 2 $532,287 $16,738 $33,475 $1,288 $0 $583,787 $1,044,863 2 $10,300 $20,600 $30,900

Operating expenses Interest Depreciation Amortization Other Total expenses Operating income Other income and expenses Gain (loss) on sale of assets Other (net) Subtotal

Income before tax Income taxes Net income Return On Ownership Break-Even

$686,240 $205,872 $480,368 $670,368 $686,241 686

$1,075,763 $322,729 $753,034 $944,034 $1,075,764 1,076


Balance SheetASSETS Current Assets Cash and cash equivalents Accounts receivable Notes receivable Inventory Other current assets Total Current Assets Fixed Assets Land Buildings Equipment Subtotal Less-accumulated depreciation Total Fixed Assets Intangible Assets Cost Less-accumulated amortization Total Intangible Assets Other assets Total Assets Month 1 $451,000 $350,000 $1,200 $400,000 $10,000 $1,212,200 1 $1,000,000 $1,500,000 $800,000 $3,300,000 $400,000 $2,900,000 1 $50,000 $20,000 $30,000 $25,000 $4,167,200 Month 2 $464,530 $460,500 $3,200 $612,000 $10,300 $1,550,530 2 $1,030,000 $1,555,000 $824,000 $3,409,000 $412,000 $2,997,000 2 $51,500 $20,600 $30,900 $25,750 $4,604,180

LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities 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 1 $600,000 $100,000 $100,000 $30,000 $90,000 $16,000 $936,000 1 $601,200 $100,000 $30,000 $50,000 $1,717,200 1 $100,000 100,000 $950,000 2 $618,000 $103,000 $103,000 $30,900 $92,700 $16,480 $964,080 2 $624,200 $103,000 $30,900 $51,500 $1,773,680 2 $100,000 100,000 $678,500


Retained earnings Total Stockholders' Equity Total Liabilities and Equity Amount sheet is out-of-balance

$1,400,000 $2,450,000 $4,167,200 $0

$1,542,000 $2,320,500 $4,094,180 $510,000

Summary Extractions & Additional Data EntriesLine 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 Cash and cash equivalents 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 EntriesOperating 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 Other payroll Payroll taxes Insurance Legal/accounting Office overhead Financing Data (0 on) Long term debt Short-term debt Capital stock issued Additional paid-in capital Accumulated depreciation (as of 2005) Depreciation 1 30 30 45 60 7 20

$320,000 $240,000 $56,000 $28,000 $40,000 $60,000 Capital

$100,000 $50,000 $400,000

Forecasted 1 Sales Sales Cost of sales Gross profit Expenses Operating expenses Interest Depreciation Amortization Total expenses Operating income Other income and expenses Gain (loss) on sale of assets Other (net) Subtotal $424,000 $16,250 $32,500 $1,250 $474,000 $581,000 $318,000 $16,250 $33,958 $1,250 $369,458 $265,542 $2,000,000 $945,000 $1,055,000 $1,500,000 $865,000 $635,000 2

$100,000 $20,000 $120,000

$10,000 $50,000 $60,000


Income before tax Income taxes Net income Retained earnings-beginning Dividends paid Retained earnings-ending

$701,000 $210,300 $490,700 $1,400,000 $0 $1,890,700

$325,542 $97,663 $227,879 $1,890,700 $0 $2,118,579

Detailed Supporting Information Cost of sales Direct labor Materials Other costs Depreciation: Enter the numbers of years. 30 year Buildings 10 year Equipment Interest: Percentages from Data sheet 10.00% Long-Term 10.00% Short-Term $320,000 $500,000 $125,000 $240,000 $500,000 $125,000

$12,500 $20,000

$12,083 $21,875

$1,250 $15,000

$1,250 $15,000

Cash Flow Balance Sheet EntriesActual 0 ASSETS Current Assets Cash and cash equivalents Accounts receivable Inventory Other current assets Total Current Assets Fixed Assets Land Buildings Equipment Subtotal Less-accumulated depreciation Total Fixed Assets 1

Forecast

$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 Less-accumulated amortization Total Intangible Assets Other assets Total Assets

$50,000 $20,000 $30,000 $25,000 $3,266,000 Actual 0

$50,000 $21,250 $28,750 $33,000 $3,505,055

Forecast 1

LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities 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 Additional paid in capital Retained earnings Other

$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 $1,716,000

$500,000 $90,000 $27,000 $90,000 $1,464,355

$100,000 $50,000 $1,400,000 $0 $1,550,000 $3,266,000 Y Positive $0

$100,000 $50,000 $1,890,700 $0 $2,040,700 $3,505,055

Total Liabilities and Equity "C" Corporation (Y/N) Cash balance positive or (negative) Amount sheet is out-of-balance

Positive $0


Month 3 $2,721,800 ($70,000) $2,651,800 $431,238 $330,450 $132,613 $894,301 $1,757,500

Month 4 $3,285,454 ($80,000) $3,205,454 $432,513 $346,364 $136,591 $915,467 $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 3 $112,368 $47,970 $19,096 $14,853 $6,365 $3,005 $106 $5,895 $0 $0 $0 $0

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 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 3 $594,797 $17,240 $34,479 $1,326 $0 $647,842 $1,109,658 3 $10,609 $21,218 $31,827

$0 $0 $0 $221,095 4 $618,071 $17,757 $35,514 $1,366 $0 $672,707 $1,617,279 4 $10,927 $31,855 $42,782

$1,141,485 $342,445 $799,039 $994,039 $1,141,486 1,141

$1,660,061 $498,018 $1,162,043 $1,357,043 $1,660,062 1,660


Month 3 $478,466 $871,315 $3,000 $824,360 $10,609 $2,187,750 3 $1,106,090 $1,591,350 $948,720 $3,646,160 $424,360 $3,221,800 3 $53,045 $21,218 $31,827 $26,523 $5,467,899

Month 4 $492,820 $1,382,454 $3,400 $937,091 $10,927 $2,826,692 4 $1,109,273 $1,739,091 $874,182 $3,722,545 $437,091 $3,285,454 4 $54,636 $21,855 $32,782 $27,318 $6,172,246

450794.6146

3 $636,540 $106,090 $106,090 $31,827 $95,481 $16,974 $993,002 3 $645,630 $106,090 $31,827 $53,045 $1,829,594 3 $100,000 100,000 $1,853,045

4 $640,563 $109,273 $109,273 $32,782 $98,345 $17,484 $1,007,719 4 $668,308 $109,273 $32,782 $54,636 $1,872,718 4 $100,000 100,000 $2,469,710


$1,685,260 $3,638,305 $5,467,899 $0

$1,729,818 $4,299,528 $6,172,246 $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

4 30 30 45 60 7 20

$240,000 $180,000 $42,000 $21,000 $30,000 $45,000 Current Portion $100,000 $50,000

$208,000 $156,000 $36,400 $18,200 $26,000 $39,000 LT Portion $500,000

$321,616 $241,212 $56,283 $28,141 $40,202 $60,303 Rate 10.00% 10.00%

Forecasted 3 $1,300,000 $833,000 $467,000 4 $2,010,100 $1,071,616 $938,484

Total 4 Periods $6,810,100 $3,714,616 $3,095,484

$275,600 $16,250 $33,958 $1,250 $327,058 $139,942

$426,141 $16,250 $33,958 $1,250 $477,599 $460,885

$1,443,741 $65,000 $134,374 $5,000 $1,648,115 $1,447,369

$3,000 $100,000 $103,000

$405,700 $200,000 $605,700

$518,700 $370,000 $888,700


$242,942 $72,883 $170,059 $2,118,579 $0 $2,288,638

$1,066,585 $319,975 $746,609 $2,288,638 $50,000 $2,985,247

$2,336,069 $700,821 $1,635,248 $1,400,000 $50,000 $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

3

4

$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 $120,000 $3,549,475 Forecast 2

$50,000 $23,750 $26,250 $5,000 $3,686,425

$50,000 $25,000 $25,000 $23,000 $4,659,697

3

4

$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 $1,280,896

$500,000 $90,000 $27,000 $40,000 $1,247,787

$500,000 $90,000 $27,000 $40,000 $1,524,450

$100,000 $50,000 $2,118,579 $0 $2,268,579 $3,549,475

$100,000 $50,000 $2,288,638 $0 $2,438,638 $3,686,425

$100,000 $50,000 $2,985,247 $0 $3,135,247 $4,659,697

Positive $0

Positive $0

Positive $0


CASH FLOW DATA ENTRYYear 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 Capital stock issued Additional paid-in capital Accumulated depreciation (as of 1999) 2000 C

'C' Corporation format selected; income taxes WILL b 1 30 30 45 60 7 20

16.00% 12.00% 10.00% 5.00% 2.00% 3.00%

of sales of sales of payroll of payroll of sales of sales Depreciation

$320,000 $240,000 $56,000 $28,000 $40,000 $60,000 Capital

$100,000 $50,000 $400,000


2 30 30 45 60 7 20

3 30 30 45 60 7 20

4 30 30 45 60 7 20

$240,000 $180,000 $42,000 $21,000 $30,000 $45,000 Current Portion $100,000 $50,000

$208,000 $156,000 $36,400 $18,200 $26,000 $39,000 LT Portion $500,000

$321,616 $241,212 $56,283 $28,141 $40,202 $60,303 Rate 10.00% 10.00%


The XYZ Company6200 XYZ Drive ABC, California 00000-0000 Phone: (000) 000-0000 FAX: (000) 000-0000 E-mail: [email protected]

Financial Health MicroShotsFinancial Analysis Financial Summary 4 Periods (1000s) 1 2 3 4 AnalysisNet Sales Cost of Goods Sold Gross Profit (Margin) G&A Total Operating Expenses EBIT* Net Income After Ownership** Current Assets Inventory Other Assets Total Assets Current Liabilities Non-current Liabilities Total Liabilities Equity Net Cash Flow Current Ratio Quick Ratio Debt Ratio Asset Turnover Net Income/Sales Debt/Equity Return on Assets Working Capital Sales/Working Capital Book Market Value Plus Ownership** 1,960 745 1,215 179 559 686 480 670 1,212 400 10 4,167 936 781 1,717 2,450 90 1.30 0.87 0.41 0.47 0.25 0.70 0.15 276 7.10 2,450 3,120 2,500 871 1,629 197 584 1,076 753 944 1,551 612 10 4,604 964 810 1,774 2,321 289 1.61 0.97 0.39 0.54 0.30 0.76 0.24 586 4.26 2,831 3,775 2,652 894 1,757 210 648 1,141 799 994 2,188 824 11 5,468 993 837 1,830 3,638 614 2.20 1.37 0.33 0.48 0.30 0.50 0.18 1,195 2.22 3,638 4,632 3,205 915 2,290 221 673 1,660 1,162 1,357 2,827 937 11 6,172 1,008 865 1,873 4,300 1,267 2.81 1.88 0.30 0.52 0.36 0.44 0.23 1,819 1.76 4,300 5,657

Sales 4 Periods4,000 3,000 2,000 1,000 0 1 2 3 4 50.0 0.0 150.0 100.0

Cash Flow 4 Periods

1Thousands of $

2

3

4

Thousands of $

Net Income 4 Periods1,400 1,200 1,000 800 600 400 200 0 1 2 3 4Ratio Thousands of $

Debt Ratio 4 Periods0.5 0.4 0.3 0.2 0.1 0.0 1 2 3 4

Current Ratio 4 Periods3.0 2.5 2.0 1.5 1.0 0.5 0.0 1Ratio

Break-Even 4 Periods2,000 1,500 1,000 500

2

3

4

0 1 2 3 4Thousands of $


CASH FLOW STATEMENT 4 PERIODSForecasted 1 Cash from operations Net earnings (loss) Add-depreciation and amortization Net cash Cash provided (used) by operating activities Accounts Receivable Inventory Other current assets Other non-current assets Accounts payable Current portion of long-term debt Income taxes Accrued expenses Other current liabilities Dividends paid Net cash from operations Investment transactions Increases (decreases) Land Buildings and improvements Equipment Intangible assets Net cash from investments Financing transactions Increases (decreases) Short term notes payable Long term debt Deferred income Deferred income taxes Other long-term liabilities Capital stock and paid in capital Net cash from financing Net increase (decrease) in cash Cash at beginning of period $490,700 $33,750 $524,450 2 $227,879 $35,208 $263,087

($307,534) ($230,411) ($50,000) ($8,000) ($271,233) $0 $153,300 ($6,712) ($4,000) $0 ($724,590)

$164,383 $39,452 $14,910 ($87,000) $0 $0 ($112,637) ($20,822) $0 $0 ($1,714)

$12,500 ($50,000) $75,000 $0 $37,500

$12,500 $0 $0 $0 $12,500

($50,000) ($100,000) ($10,000) ($3,000) $40,000 $0 ($123,000) ($360,640) $451,000

$0 $0 $0 $0 ($50,000) $0 ($50,000) $198,873 $90,360


Cash at the end of period

$90,360

$289,233


Forecasted 3 $170,059 $35,208 $205,267 4 $746,609 $35,208 $781,817

Total 4 Periods $1,635,248 $139,374 $1,774,621

$65,754 $15,781 ($31,230) $115,000 $0 $0 ($24,780) ($8,329) $0 $0 $132,196

($233,458) ($117,674) $26,320 ($18,000) $0 $0 $247,092 $29,571 $0 ($50,000) ($116,149)

($310,855) ($292,852) ($40,000) $2,000 ($271,233) $0 $262,975 ($6,292) ($4,000) ($50,000) ($710,257)

$12,500 $0 $0 $0 $12,500

$12,500 $0 $0 $0 $12,500

$50,000 ($50,000) $75,000 $0 $75,000

$0 $0 $0 $0 $0 $0 $0 $324,963 $289,233

$0 $0 $0 $0 $0 $0 $0 $653,168 $614,196

($50,000) ($100,000) ($10,000) ($3,000) ($10,000) $0 ($173,000) $816,364 $451,000


$614,196

$1,267,364

$1,267,364


CASH FLOW PROJECTIONS 8 PERIODSCurrent 2 3 2 3 $227,879 $170,059 $35,208 $35,208 $263,087 $205,267

Cash from operations Net earnings (loss) Add-depreciation and amortization Net cash from operations Cash provided (used) by operating activities Accounts Receivable Inventory Other current assets Other non-current assets Accounts payable Current portion of long-term debt Income taxes Accrued expenses Other current liabilities Dividends paid Net cash from operations Investment transactions Increases (decreases) Land Buildings and improvements Equipment Intangible assets Net cash from investments Financing transactions Increases (decreases) Short term notes payable Long term debt Deferred income Deferred income taxes Other long-term liabilities Capital stock and paid in capital Net cash from financing Net increase (decrease) in cash Cash at beginning of period

1 1 $490,700 $33,750 $524,450

($307,534) ($230,411) ($50,000) ($8,000) ($271,233) $0 $153,300 ($6,712) ($4,000) $0 ($724,590)

$164,383 $39,452 $14,910 ($87,000) $0 $0 ($112,637) ($20,822) $0 $0 ($1,714)

$65,754 $15,781 ($31,230) $115,000 $0 $0 ($24,780) ($8,329) $0 $0 $132,196

$12,500 ($50,000) $75,000 $0 $37,500

$12,500 $0 $0 $0 $12,500

$12,500 $0 $0 $0 $12,500

($50,000) ($100,000) ($10,000) ($3,000) $40,000 $0 ($123,000) ($360,640) $451,000

$0 $0 $0 $0 ($50,000) $0 ($50,000) $198,873 $90,360

$0 $0 $0 $0 $0 $0 $0 $324,963 $289,233



$90,360

$289,233

$614,196


Current 4 4 $746,609 $35,208 $781,817

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 $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) ($116,149)

($46,814) $5,422 $35,705 $43,500 $135,617 $0 $158,052 $28,763 $2,000 ($50,000) $312,244

($34,454) $36,876 $53,987 $60,700 $216,986 $0 $194,975 $40,897 $3,200 ($65,000) $508,167

($22,094) $68,330 $72,269 $77,900 $298,356 $0 $231,899 $53,031 $4,400 ($80,000) $704,091

($9,734) $99,784 $90,551 $95,100 $379,726 $0 $268,822 $65,165 $5,600 ($95,000) $900,014

$12,500 $0 $0 $0 $12,500

$12,500 $25,000 ($37,500) $0 $0

$12,500 $40,000 ($60,000) $0 ($7,500)

$12,500 $55,000 ($82,500) $0 ($15,000)

$12,500 $70,000 ($105,000) $0 ($22,500)

$0 $0 $0 $0 $0 $0 $0 $653,168 $614,196

$25,000 $50,000 $5,000 $1,500 ($20,000) $0 $61,500 $995,970 $533,313

$40,000 $80,000 $8,000 $2,400 ($27,000) $0 $103,400 $1,312,721 $602,159

$55,000 $110,000 $11,000 $3,300 ($34,000) $0 $145,300 $1,629,472 $671,005

$70,000 $140,000 $14,000 $4,200 ($41,000) $0 $187,200 $1,946,224 $739,851


$1,267,364

$1,529,282

$1,914,880

$2,300,477

$2,686,075


Primary Financial Predictors - 4 Periods - Quick AnalAccount DescriptionsAccounts 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 1350,000 657,534 451,000 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

Current Assets

Current Liabilities

EBIT

Sales

Cash Flow

Working Capital


Primary Financial Predictors - 4 Periods - Quick Anal


Primary Financial Predictors - 4 Periods - Quick AnalPredictionsZ 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) 3.107 x (EBIT / 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) 6.72 x (EBIT / 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


Primary Financial Predictors - 4 Periods - Quick AnalLogit Analysis Cash Marketable Securities 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


Primary Financial Predictors - 4 Periods - Quick AnalH= 1.82


Quick AnalysisPeriod 2657,534 460,500 464,530 663,403 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

Period 3460,500 493,151 478,466 803,429 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

Period 4493,151 427,397 492,820 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

InstructionsThese 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 AnalysisPredictions2 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

3.85 OK Overall Trend OK 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

2.03 Warning - Trend Below 2.90 Overall Trend is OK 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

7.96 OK Overall Trend is OK 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

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

2.71 OK - Above 0.862 Overall Trend is OK


Quick Analysis2 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 TREND

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

5 TREND

28% OK - Below 50% Overall Trend is OK

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


Quick Analysis2.57 2.80 3.33 3.82 OK 2.63 Overall Trend is OK


Summary AnalysisThe XYZ CompanyFINANCIAL INDICATORSZ Score: If Publicly Held (Higher is Better) Z Score: If Privately Held (Higher is Better) Z Score: Non-manufacturing (Higher is Better) Logit Analysis (Lower is Better) Month 1 1

Month 2 2 2.40 2.70 If Z is less than 1.8 then the firm is classified as Faile

1.35 1.68 If Z is less than 1.23 then the firm is classified as Fai

4.09 4.83 If Z is less than 1.11 then the firm is classified as Fai

58.42% 41.04% If percentage is higher than 50% and trending higher

Income RatiosTurnover of Total Operating Assets Net Sales to Net Worth Gross Margin on Net Sales Operating Income to Net Sales Ratio 158% 80.99% 61.99% 33.48% 159% 109.19% 65.15% 41.79%

Profitability RatiosEarnings Per Share (EPS) Ratio Net Profit Margin Return on Total Assets Return on Net Worth $4.80 24.51% 11.53% 19.61% $7.53 30.12% 16.36% 26.60%

Liquidity RatiosAcid Test (Quick Ratio) Current Ratio 0.87 1.30 0.97 1.61


Summary AnalysisThe XYZ CompanyActivity RatiosAverage Collection Period Computations Accounts Receivable Credit Sales Days Per Year Credit sales per day Average Collection Period - Days Average Collection Period Ratio Inventory Turnover Days Sales in AR Receivables Turnover Days Inventory Debt ratio $350,000 $2,010,000 365 $5,507 63.56 5.74 1.86 65.18 5.60 195.97 0.41 $460,500 $2,560,000 365 $7,014 65.66 5.56 1.42 67.23 5.43 256.36 0.39

Other Key RatiosNet Sales to Inventory Days Purchases in AP 4.90 293.96 4.08 258.87


Summary AnalysisThe XYZ CompanyWorking Capital Net Sales to Working Capital Total Assets to Net Sales Net Sales to AR Net Sales to Net Fixed Assets Net Sales to Total Assets Amortization and Depreciation Expense to Net Sales Gross Profit Percentage Operating Expenses as % of Net Sales Return on Net Sales Income before tax to Net Worth Income before tax to Total Assets Retained Earning to Net Income Times Interest Earned Interest Expense to Net Sales Current Liabilities to Net Worth Current Liabilities to Inventory AP to Net Sales Total Liabilities to Net Worth (Debt Ratio) Net Worth to Total Liabilities $276,200 7.10 2.13 5.60 0.68 0.47 0.02 61.99% 28.51% 24.51% 28.01% 16.47% 291.44% 40.38 0.01 0.38 2.34 0.31 70.09% 1.43 $586,450 4.26 1.84 5.43 0.83 0.54 0.01 65.15% 23.35% 30.12% 38.01% 23.36% 204.77% 62.43 0.01 0.34 1.58 0.25 62.66% 1.60


Summary AnalysisThe XYZ CompanyPAYROLL ANALYSISCURRENT 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 . . . . . . . . . . . . . . . . . . . . . GROSS PAYROLL BURDEN IS------

$324,579 ($25,485)

THE NUMBER OF NEEDED EMPLOYEES ON THE PAYROLL . . . . . . . . . . . . . . . . . . . . . . . . . . . .


Summary AnalysisThe XYZ CompanyCASH FLOW ANALYSISCash from operations Net earnings (loss) Add-depreciation and amortization Net cash from operations Cash provided (used) by operating activities Accounts Receivable Inventory Other current assets Other non-current assets Accounts payable Current portion of long-term debt Income taxes Accrued expenses Other current liabilities Distributions to shareholders Net cash used by operations Investment transactions Increases (decreases) Land Buildings and improvements Equipment Intangible assets Net cash from investments Financing transactions Increases (decreases) Short term notes payable Long term debt Deferred income Deferred income taxes Other long-term liabilities Capital invested Net cash from financing Month 1 $480,368 $33,750 $514,118 Month 2 $753,034 $34,763 $787,797

($307,534) ($230,411) ($50,000) ($8,000) ($271,233) $0 $153,300 ($6,712) ($4,000) $0 ($724,590)

$164,383 $39,452 $14,910 ($87,000) $0 $0 ($112,637) ($20,822) $0 $0 ($1,714)

$12,500 ($50,000) $75,000 $0 $37,500

$12,500 $0 $0 $0 $12,500

($50,000) ($100,000) ($10,000) ($3,000) $40,000 $0 ($123,000)

$0 $0 $0 $0 ($50,000) $0 ($50,000)


Summary AnalysisThe XYZ CompanyNet increase (decrease) in cash Cash at beginning of period ($360,640) $451,000 $90,360 $198,873 $464,530 $663,403


Prepared by JaxWorks Consultancy, Inc.


ummary AnalysisMonth Month 3 4 3 4 3.04 3.51 Z is less than 1.8 then the firm is classified as Failed. 1.62 1.88 Z is less than 1.23 then the firm is classified as Failed. 5.89 7.02 Z is less than 1.11 then the firm is classified as Failed. 20.78% 8.28% percentage is higher than 50% and trending higher-Not Good! Trend 5 Comments 5 3.83 Trend is Upward

The XYZ Company

2.01 Trend is Upward

7.92 Trend is Upward

-10.54% Trend is Downward

120% 73.53% 66.28% 41.85%

112% 75.13% 71.44% 50.45%

93% Trend is Downward 71.39% Trend is Downward 73.58% Trend is Upward 54.64% Trend is Upward

$7.99 30.13% 14.61% 21.96%

$11.62 36.25% 18.83% 27.03%

$13.21

Trend is Upward

39.06% Trend is Upward 20.37% Trend is Upward 28.20% Trend is Upward

1.37 2.20

1.88 2.81

2.13 Trend is Upward 3.26 Trend is Upward


ummary Analysis

The XYZ Company$871,315 $2,721,800 365 $7,457 116.85 3.12 1.08 119.93 3.04 336.45 0.33 $1,382,454 $3,285,454 365 $9,001 153.58 2.38 0.98 157.42 2.32 373.62 0.30

1.07 Trend is Downward 0.59 Trend is Downward 184.79 Trend is Upward 1.04 Trend is Downward 443.86 Trend is Upward 0.26 Trend is Downward

3.22 259.80

3.42 255.39

2.58 Trend is Downward 238.31 Trend is Downward


ummary Analysis$1,194,748 2.22 2.06 3.04 0.82 0.48 0.01 66.28% 24.43% 30.13% 31.37% 20.88% 210.91% 64.37 0.01 0.27 1.20 0.24 50.29% 1.99 $1,818,973 1.76 1.93 2.32 0.98 0.52 0.01 71.44% 20.99% 36.25% 38.61% 26.90% 148.86% 91.08 0.01 0.23 1.08 0.20 43.56% 2.30 $2,278,247 Trend is Upward (0.68) Trend is Downward 1.89 Trend is Downward 1.04 Trend is Downward 1.05 Trend is Upward 0.53 Trend is Upward 0.01 Trend is Downward 73.58% Trend is Upward 18.95% Trend is Downward 39.06% Trend is Upward 40.29% Trend is Upward 29.10% Trend is Upward 108.59% Trend is Downward 103.07 Trend is Upward 0.00 Trend is Downward 0.18 Trend is Downward 0.51 Trend is Downward 0.17 Trend is Downward 33.65% Trend is Downward 2.58 Trend is Upward

The XYZ Company


ummary Analysis

The XYZ Company

-8.1% -3.01 Comments Under-staffed


ummary Analysis

The XYZ CompanyMonth 3 $799,039 $35,805 $834,845 Month 4 $1,162,043 $36,880 $1,198,922 Trend 5 Comments

$1,321,378 Trend is Upward $37,907 Trend is Upward $1,359,286 Trend is Upward

$65,754 $15,781 ($31,230) $115,000 $0 $0 ($24,780) ($8,329) $0 $0 $132,196

($233,458) ($117,674) $26,320 ($18,000) $0 $0 $247,092 $29,571 $0 ($50,000) ($116,149)

($46,814) $5,422 $35,705 $43,500 $135,617 $0 $158,052 $28,763 $2,000 ($50,000)

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

$312,244 Trend is Upward

$12,500 $0 $0 $0 $12,500

$12,500 $0 $0 $0 $12,500

$12,500 $25,000 ($37,500) $0

Trend is Upward Trend is Upward Trend is Downward Trend is Upward

$0 Trend is Downward

$0 $0 $0 $0 $0 $0 $0

$0 $0 $0 $0 $0 $0 $0

$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

$61,500 Trend is Upward


ummary Analysis$324,963 $478,466 $803,429 $653,168 $492,820 $1,145,988 $995,970 Trend is Upward $506,553 Trend is Upward $1,502,523 Trend is Upward

The XYZ Company

repared by JaxWorks Consultancy, Inc.


Forecast Analysis- 12 Fiscal PeriodsIncome StatementMonth 1 $2,010,000 ($50,000) $1,960,000 $320,000 $300,000 $125,000 $745,000 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 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 $1,215,000 Month 2 $2,560,000 ($60,000) $2,500,000 $427,600 $315,000 $128,750 $871,350 $1,628,650 Month 3 $2,721,800 ($70,000) $2,651,800 $431,238 $330,450 $132,613 $894,301 $1,757,500

Gross Sales Discounts/Allowances Net Sales Direct Material Cost Direct Labor Cost Other Direct Costs Total Cost of Sales


Forecast Analysis- 12 Fiscal PeriodsVariable 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 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 Operating income

1 $508,760 $16,250 $32,500 $1,250 $0 $558,760 $656,240

2 $532,287 $16,738 $33,475 $1,288 $0 $583,787 $1,044,863

3 $594,797 $17,240 $34,479 $1,326 $0 $647,842 $1,109,658

Other income and expenses Gain (loss) on sale of assets Other (net) Subtotal

1 $10,000 $20,000 $30,000 1 $686,240 $205,872 $480,368 $670,368

2 $10,300 $20,600 $30,900 2 $1,075,763 $322,729 $753,034 $944,034

3 $10,609 $21,218 $31,827 3 $1,141,485 $342,445 $799,039 $994,039

Income before tax Income taxes Net income Return On Ownership


Forecast Analysis- 12 Fiscal PeriodsBalance SheetASSETS Current Assets Cash and cash equivalents Accounts receivable Notes receivable Inventory Other current assets Total Current Assets Fixed Assets Land Buildings Equipment Subtotal Less-accumulated depreciation Total Fixed Assets Intangible Assets Cost Less-accumulated amortization Total Intangible Assets Other assets Total Assets Month 1 $451,000 $350,000 $1,200 $400,000 $10,000 $1,212,200 1 $1,000,000 $1,500,000 $800,000 $3,300,000 $400,000 $2,900,000 1 $50,000 $20,000 $30,000 $25,000 $4,167,200 Month 2 $464,530 $460,500 $3,200 $612,000 $10,300 $1,550,530 2 $1,030,000 $1,555,000 $824,000 $3,409,000 $412,000 $2,997,000 2 $51,500 $20,600 $30,900 $25,750 $4,604,180 Month 3 $478,466 $871,315 $3,000 $824,360 $10,609 $2,187,750 3 $1,106,090 $1,591,350 $948,720 $3,646,160 $424,360 $3,221,800 3 $53,045 $21,218 $31,827 $26,523 $5,467,899


Forecast Analysis- 12 Fiscal PeriodsBalance SheetLIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities 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 Sub-total Total Liabilities Stockholders' Equity Capital stock issued Additional paid in capital Retained earnings Total Stockholders' Equity Total Liabilities and Equity Altman Z-Score Analysis Publicly Held Firm Privately Held Firm Service, Retail, Wholesale 1 $600,000 $100,000 $100,000 $30,000 $90,000 $16,000 $936,000 1 $601,200 $100,000 $30,000 $50,000 $781,200 $1,717,200 1 $100,000 $950,000 $1,400,000 $2,450,000 $4,167,200 1 2.40 1.35 4.09 2 $618,000 $103,000 $103,000 $30,900 $92,700 $16,480 $964,080 2 $624,200 $103,000 $30,900 $51,500 $809,600 $1,773,680 2 $100,000 $678,500 $1,542,000 $2,320,500 $4,094,180 2 2.70 1.68 4.83 3 $636,540 $106,090 $106,090 $31,827 $95,481 $16,974 $993,002 3 $645,630 $106,090 $31,827 $53,045 $836,592 $1,829,594 3 $100,000 $1,853,045 $1,685,260 $3,638,305 $5,467,899 3 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 $2,289,987 Month 5 $3,641,354 ($90,000) $3,551,354 $488,132 $361,589 $140,397 $990,118 $2,561,236 Month 6 $4,040,170 ($100,000) $3,940,170 $522,250 $377,043 $144,261 $1,043,553 $2,896,617 Month 7 $4,438,986 ($110,000) $4,328,986 $556,367 $392,497 $148,124 $1,096,988 $3,231,998 Month 8 $4,837,803 ($120,000) $4,717,803 $590,485 $407,951 $151,988 $1,150,423 $3,567,379 Month 9 $5,236,619 ($130,000) $5,106,619 $624,603 $423,405 $155,851 $1,203,859 $3,902,760 Month 10 $5,635,435 ($140,000) $5,495,435 $658,721 $438,859 $159,715 $1,257,294 $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 $1,617,279

5 $661,089 $18,252 $36,503 $1,404 $0 $717,248 $1,843,988

6 $700,134 $18,754 $37,508 $1,443 $0 $757,838 $2,138,779

7 $739,178 $19,256 $38,512 $1,481 $0 $798,428 $2,433,570

8 $778,222 $19,758 $39,517 $1,520 $0 $839,018 $2,728,362

9 $817,267 $20,261 $40,521 $1,559 $0 $879,607 $3,023,153

10 $856,311 $20,763 $41,526 $1,597 $0 $920,197 $3,317,944

4 $10,927 $31,855 $42,782 4 $1,660,061 $498,018 $1,162,043 $1,357,043

5 $11,232 $32,464 $43,695 5 $1,887,683 $566,305 $1,321,378 $1,518,878

6 $11,541 $36,082 $47,623 6 $2,186,402 $655,921 $1,530,481 $1,729,881

7 $11,850 $39,700 $51,550 7 $2,485,120 $745,536 $1,739,584 $1,940,884

8 $12,159 $43,318 $55,477 8 $2,783,839 $835,152 $1,948,687 $2,151,887

9 $12,468 $46,936 $59,404 9 $3,082,557 $924,767 $2,157,790 $2,362,890

10 $12,777 $50,554 $63,332 10 $3,381,276 $1,014,383 $2,366,893 $2,573,893


Month 4 $492,820 $1,382,454 $3,400 $937,091 $10,927 $2,826,692 4 $1,109,273 $1,739,091 $874,182 $3,722,545 $437,091 $3,285,454 4 $54,636 $21,855 $32,782 $27,318 $6,172,246

Month 5 $506,553 $1,643,112 $4,300 $1,149,271 $11,232 $3,314,467 5 $1,162,318 $1,784,766 $948,542 $3,895,625 $449,271 $3,446,354 5 $56,159 $22,464 $33,695 $28,079 $6,822,596

Month 6 $520,492 $1,993,930 $4,940 $1,331,634 $11,541 $3,862,537 6 $1,202,709 $1,860,128 $983,268 $4,046,104 $461,634 $3,584,470 6 $57,704 $23,082 $34,623 $28,852 $7,510,481

Month 7 $534,432 $2,344,748 $5,580 $1,513,997 $11,850 $4,410,607 7 $1,243,099 $1,935,490 $1,017,995 $4,196,584 $473,997 $3,722,586 7 $59,250 $23,700 $35,550 $29,625 $8,198,367

Month 8 $548,371 $2,695,565 $6,220 $1,696,361 $12,159 $4,958,676 8 $1,283,490 $2,010,852 $1,052,721 $4,347,063 $486,361 $3,860,703 8 $60,795 $24,318 $36,477 $30,398 $8,886,253

Month 9 $562,311 $3,046,383 $6,860 $1,878,724 $12,468 $5,506,746 9 $1,323,881 $2,086,214 $1,087,448 $4,497,543 $498,724 $3,998,819 9 $62,340 $24,936 $37,404 $31,170 $9,574,138

Month 10 $576,251 $3,397,201 $7,500 $2,061,087 $12,777 $6,054,816 10 $1,364,272 $2,161,576 $1,122,174 $4,648,022 $511,087 $4,136,935 10 $63,886 $25,554 $38,332 $31,943 $10,262,024


4 $640,563 $109,273 $109,273 $32,782 $98,345 $17,484 $1,007,719 4 $668,308 $109,273 $32,782 $54,636 $864,999 $1,872,718 4 $100,000 $2,469,710 $1,729,818 $4,299,528 $6,172,246 4 3.51 1.88 7.02

5 $658,833 $112,318 $112,318 $33,695 $101,086 $17,971 $1,036,220 5 $690,523 $112,318 $33,695 $56,159 $892,695 $1,928,916 5 $100,000 $2,921,233 $1,872,448 $4,893,680 $6,822,596 5 3.83 2.01 7.92

6 $672,856 $115,409 $115,454 $34,636 $103,868 $18,465 $1,060,628 6 $712,799 $115,409 $34,623 $57,704 $920,534 $1,981,162 6 $100,000 $3,494,600 $1,985,719 $5,580,319 $7,561,481 6 4.20 2.16 8.91

7 $686,879 $118,499 $118,568 $35,570 $106,649 $18,960 $1,085,037 7 $735,074 $118,499 $35,550 $59,250 $948,373 $2,033,409 7 $100,000 $4,067,968 $2,098,990 $6,266,958 $8,300,367 7 4.57 2.31 9.89

8 $700,902 $121,590 $121,659 $36,498 $109,431 $19,454 $1,109,445 8 $757,350 $121,590 $36,477 $60,795 $976,212 $2,085,656 8 $100,000 $4,641,335 $2,212,262 $6,953,597 $9,039,253 8 4.93 2.47 10.88

9 $714,925 $124,681 $124,784 $37,435 $112,213 $19,949 $1,133,853 9 $779,625 $124,681 $37,404 $62,340 $1,004,051 $2,137,903 9 $100,000 $5,214,703 $2,325,533 $7,640,236 $9,778,138 9 5.30 2.62 11.86

10 $728,948 $127,772 $127,886 $38,366 $114,995 $20,443 $1,158,261 10 $801,901 $127,772 $38,332 $63,886 $1,031,890 $2,190,150 10 $100,000 $5,788,070 $2,438,805 $8,326,875 $10,517,024 10 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 $4,573,522 Month 12 $6,433,067 ($160,000) $6,273,067 $726,956 $469,767 $167,442 $1,364,164 $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 $3,612,735

12 $934,400 $21,767 $43,535 $1,674 $0 $1,001,376 $3,907,526

11 $13,086 $54,173 $67,259 11 $3,679,994 $1,103,998 $2,575,996 $2,784,896

12 $13,395 $57,791 $71,186 12 $3,978,712 $1,193,614 $2,785,099 $2,995,899


Month 11 $590,190 $3,748,019 $8,140 $2,243,450 $13,086 $6,602,886 11 $1,404,663 $2,236,938 $1,156,900 $4,798,501 $523,450 $4,275,051 11 $65,431 $26,173 $39,259 $32,716 $10,949,910

Month 12 $604,130 $4,098,837 $8,780 $2,425,813 $13,395 $7,150,955 12 $1,445,053 $2,312,301 $1,191,627 $4,948,981 $535,813 $4,413,167 12 $66,977 $26,791 $40,186 $33,488 $11,637,795


11 $742,970 $130,863 $130,994 $39,298 $117,776 $20,938 $1,182,669 11 $824,176 $130,863 $39,259 $65,431 $1,059,729 $2,242,397 11 $100,000 $6,361,438 $2,552,076 $9,013,513 $11,255,910 11 6.04 2.92 13.84

12 $756,993 $133,953 $134,090 $40,227 $120,558 $21,433 $1,207,077 12 $846,451 $133,953 $40,186 $66,977 $1,087,567 $2,294,644 12 $100,000 $6,934,805 $2,665,347 $9,700,152 $11,994,795 12 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

Month1

Month2

Month3

Month4

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 *EBIT is Earnings Before Interest and Taxes

$1,960,000 $745,000 $1,215,000 $178,767 $558,760 $686,240 $480,368 $670,368 $1,212,200 $400,000 $10,000 $4,167,200 $936,000 $781,200 $1,717,200 $2,450,000 $90,360 1.30 0.87 0.41 0.47 0.25 0.70 0.15 $276,200 7.10 $2,450,000 $3,120,368 2.40 1.35 4.09

$2,500,000 $871,350 $1,628,650 $197,222 $583,787 $1,075,763 $753,034 $944,034 $1,550,530 $612,000 $10,300 $4,604,180 $964,080 $809,600 $1,773,680 $2,320,500 $289,233 1.61 0.97 0.39 0.54 0.30 0.76 0.24 $586,450 4.26 $2,830,500 $3,774,534 2.70 1.68 4.83

$2,651,800 $894,301 $1,757,500 $209,659 $647,842 $1,141,485 $799,039 $994,039 $2,187,750 $824,360 $10,609 $5,467,899 $993,002 $836,592 $1,829,594 $3,638,305 $614,196 2.20 1.37 0.33 0.48 0.30 0.50 0.18 $1,194,748 2.22 $3,638,305 $4,632,344 3.04 1.62 5.89

$3,205,454 $915,467 $2,289,987 $221,095 $672,707 $1,660,061 $1,162,043 $1,357,043 $2,826,692 $937,091 $10,927 $6,172,246 $1,007,719 $864,999 $1,872,718 $4,299,528 $1,267,364 2.81 1.88 0.30 0.52 0.36 0.44 0.23 $1,818,973 1.76 $4,299,528 $5,656,570 3.51 1.88 7.02

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


Income Statement Smoothing Forecast - 8 Periods

1

2

3

4

5

6

7

8

1

Net Sales G&A Net Income After

Cost of Goods Sold Total Operating Expenses Ownership**

Gross Profit (Margin) EBIT*



ancial Summary Analysis

Month5

Month6

Month7

Month8

TrendASSESSMENT

$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 $4,958,676 $1,696,361 $12,159 $8,886,253 $1,109,445 $976,212 $2,085,656 $6,953,597 $2,686,075 4.47 2.94 0.23 0.54 0.40 0.30 0.25 $3,849,232 1.26 $6,800,596 $8,952,483 4.93 2.47 10.88

Upward Upward Upward Upward Upward Upward Upward Upward Upward Upward Upward Upward Upward Upward Upward Upward Upward Upward Upward Downward Upward Upward Downward Upward Upward Downward Upward Upward Upward Upward Upward


Balance Sheet Smoothing Forcast - 8 Periods

2

3

4

5

6

7

8

Current Assets Total Assets Total Liabilities

Inventory Current Liabilities Equity

Other Assets Non-current Liabilities

pared by JaxWorks Consultancy, Inc.


The XYZ Company6200 XYZ Drive ABC, California 00000-0000 Phone: (000) 000-0000 FAX: (000) 000-0000 E-mail: [email protected] May 03, 2012

Comparative Income Statement - 4 Periods

Sales Revenue

Cost of Sales

Gross Profit

Fixed Expenses

Other Expenses

Income Before Tax

Month1

Month2 % 102.55% -2.55% 100.00% 16.33% 15.31% 6.38% 38.01% 61.99% $ $2,560,000 ($60,000) $2,500,000 $427,600 $315,000 $128,750 $871,350 $1,628,650 % 102.40% -2.40% 100.00% 17.10% 12.60% 5.15% 34.85% 65.15% $

Month3 $2,721,800 ($70,000) $2,651,800 $431,238 $330,450 $132,613 $894,301 $1,757,500

Income DetailsGross Sales Discounts/Allowances Net Sales Direct Material Cost Direct Labor Cost Other Direct Costs Total Cost of Sales Gross Profit

$ $2,010,000 ($50,000) $1,960,000 $320,000 $300,000 $125,000 $745,000 $1,215,000

ExpensesFixed 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 $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 9.69% 2.55% 1.53% 0.26% 0.15% 0.05% 0.20% 0.11% 0.05% 0.20% 0.31% 0.05% 0.15% 0.45% 0.05% $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 7.64% 2.06% 1.24% 0.21% 0.12% 0.04% 0.15% 0.09% 0.05% 0.16% 0.25% 0.04% 0.12% 0.36% 0.04% $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



Sales Revenue

Cost of Sales

Gross Profit

Fixed Expenses

Other Expenses

Income Before Tax

Month1 Supplies Taxes - Business & Payroll Travel Utilities Other Expenses Total Fixed Expenses $1,000 $1,000 $6,230 $11,974 $0 $329,993 0.05% 0.05% 0.32% 0.61% 0.00% 16.84%

Month2 $1,030 $1,030 $6,120 $12,374 $0 $335,065 0.04% 0.04% 0.24% 0.49% 0.00% 13.40%

Month3 $1,061 $1,061 $6,010 $14,186 $0 $385,138



Sales Revenue

Cost of Sales

Gross Profit

Fixed Expenses

Other Expenses

Income Before Tax

Month1 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 Total Variable Expenses $90,000 $43,000 $18,000 $14,000 $6,000 $2,110 $100 $5,557 $0 $0 $0 $0 $0 $0 $178,767 4.59% 2.19% 0.92% 0.71% 0.31% 0.11% 0.01% 0.28% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 9.12%

Month2

Month3

$102,700 $46,875 $18,540 $14,420 $6,180 $2,680 $103 $5,724 $0 $0 $0 $0 $0 $0 $197,222

4.11% 1.88% 0.74% 0.58% 0.25% 0.11% 0.00% 0.23% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 7.89%

$112,368 $47,970 $19,096 $14,853 $6,365 $3,005 $106 $5,895 $0 $0 $0 $0 $0 $0 $209,659

Operating expenses Interest Depreciation Amortization Other Total expenses Operating income

$508,760 $16,250 $32,500 $1,250 $0 $558,760 $656,240

25.96% 0.83% 1.66% 0.06% 0.00% 28.51% 33.48%

$532,287 $16,738 $33,475 $1,288 $0 $583,787 $1,044,863

21.29% 0.67% 1.34% 0.05% 0.00% 23.35% 41.79%

$594,797 $17,240 $34,479 $1,326 $0 $647,842 $1,109,658

Other income and expensesGain (loss) on sale of assets Other (net) Subtotal Income before tax Income taxes $10,000 $20,000 $30,000 $686,240 $205,872 0.51% 1.02% 1.53% 35.01% 10.50% $10,300 $20,600 $30,900 $1,075,763 $322,729 0.41% 0.82% 1.24% 43.03% 12.91% $10,609 $21,218 $31,827 $1,141,485 $342,445



Sales Revenue

Cost of Sales

Gross Profit

Fixed Expenses

Other Expenses

Income Before Tax

Month1 Net income Return On Ownership $480,368 $670,368 24.51% 34.20%

Month2 $753,034 $944,034 30.12% 37.76%

Month3 $799,039 $994,039



May 03, 2012

Income Before Tax

Income Taxes

Net Income (Loss)

Month3 % 102.64% -2.64% 100.00% 16.26% 12.46% 5.00% 33.72% 66.28% $

Month4 % 100.00% -2.43% 97.57% 13.49% 10.81% 4.26% 28.56% 71.44% $3,285,454 ($80,000) $3,205,454 $432,513 $346,364 $136,591 $915,467 $2,289,987

7.35% 2.00% 1.20% 1.71% 0.12% 0.04% 0.15% 0.09% 0.06% 0.16% 0.24% 0.04% 0.12% 0.36% 0.04%

$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

6.08% 1.70% 1.02% 1.57% 0.10% 0.03% 0.12% 0.07% 0.06% 0.14% 0.20% 0.03% 0.10% 0.31% 0.03%


Income Before Tax

Income Taxes

Net Income (Loss)

Month3 0.04% 0.04% 0.23% 0.53% 0.00% 14.52%

Month4 $1,093 $1,093 $5,900 $16,974 $0 $396,977 0.03% 0.03% 0.18% 0.53% 0.00% 12.38%


Income Before Tax

Income Taxes

Net Income (Loss)

Month3

Month4

4.24% 1.81% 0.72% 0.56% 0.24% 0.11% 0.00% 0.22% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 7.91%

$118,647 $51,249 $19,669 $15,298 $6,556 $3,493 $109 $6,072 $0 $0 $0 $0 $0 $0 $221,095

3.70% 1.60% 0.61% 0.48% 0.20% 0.11% 0.00% 0.19% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 6.90%

22.43% 0.65% 1.30% 0.05% 0.00% 24.43% 41.85%

$618,071 $17,757 $35,514 $1,366 $0 $672,707 $1,617,279

19.28% 0.55% 1.11% 0.04% 0.00% 20.99% 50.45%

0.40% 0.80% 1.20% 43.05% 12.91%

$10,927 $31,855 $42,782 $1,660,061 $498,018

0.34% 0.99% 1.33% 51.79% 15.54%


Income Before Tax

Income Taxes

Net Income (Loss)

Month3 30.13% 37.49%

Month4 $1,162,043 $1,357,043 36.25% 42.34%

pared by JaxWorks Consultancy, Inc.


The XYZ Company6200 XYZ Drive ABC, California 00000-0000 Phone: (000) 000-0000 FAX: (000) 000-0000 E-mail: [email protected] May 03, 2012

Comparative Balance Sheet - 4 Periods

Total Current Assets

Total Fixed Assets

Total Assets

Total Current Liabilities

Total Liabilities

Total Stockholders' Equity

Month1 ASSETS Current Assets Cash and cash equivalents Accounts receivable Notes receivable Inventory Other current assets Total Current Assets Fixed Assets Land Buildings Equipment Subtotal Less-accumulated depreciation Total Fixed Assets Intangible Assets Cost Less-accumulated amortization Total Intangible Assets Other assets Total All Other Assets Total Assets $50,000 $20,000 $30,000 $25,000 $55,000 $4,167,200 1.20% 0.48% 0.72% 0.60% 1.32% 100.00% $1,000,000 $1,500,000 $800,000 $3,300,000 $400,000 $2,900,000 24.00% 36.00% 19.20% 79.19% 9.60% 69.59% $451,000 $350,000 $1,200 $400,000 $10,000 $1,212,200 10.82% 8.40% 0.03% 9.60% 0.24% 29.09% $ % $

Month2 % 10.09% 10.00% 0.07% 13.29% 0.22% 33.68% 22.37% 33.77% 17.90% 74.04% 8.95% 65.09% 1.12% 0.45% 0.67% 0.56% 1.36% 100.00% $

Month3

$464,530 $460,500 $3,200 $612,000 $10,300 $1,550,530 $1,030,000 $1,555,000 $824,000 $3,409,000 $412,000 $2,997,000 $51,500 $20,600 $30,900 $25,750 $56,650 $4,604,180

$478,466 $871,315 $3,000 $824,360 $10,609 $2,187,750 $1,106,090 $1,591,350 $948,720 $3,646,160 $424,360 $3,221,800 $53,045 $21,218 $31,827 $26,523 $58,350 $5,467,899


Comparative Balance Sheet - 4 Periods

Total Current Assets

Total Fixed Assets

Total Assets

Total Current Liabilities

Total Liabilities


Month1 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities 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 $100,000 $100,000 $950,000 $1,400,000 $2,450,000 $4,167,200 2.40% 2.40% 22.80% 33.60% 58.79% 100.00% $601,200 $100,000 $30,000 $50,000 $1,717,200 14.43% 2.40% 0.72% 1.20% 41.21% $600,000 $100,000 $100,000 $30,000 $90,000 $16,000 $936,000 14.40% 2.40% 2.40% 0.72% 2.16% 0.38% 22.46%

Month2

Month3

$618,000 $103,000 $103,000 $30,900 $92,700 $16,480 $964,080

15.09% 2.52% 2.52% 0.75% 2.26% 0.40% 23.55%

$636,540 $106,090 $106,090 $31,827 $95,481 $16,974 $993,002

$624,200 $103,000 $30,900 $51,500 $1,773,680

15.25% 2.52% 0.75% 1.26% 43.32%

$645,630 $106,090 $31,827 $53,045 $1,829,594

$100,000 $100,000 $678,500 $1,542,000 $2,320,500 $4,094,180

2.44% 2.44% 16.57% 37.66% 56.68% 100.00%

$100,000 $100,000 $1,853,045 $1,685,260 $3,638,305 $5,467,899



May 03, 2012


Total Liabilities and Equity

Month3 % 8.75% 15.94% 0.05% 15.08% 0.19% 40.01% 20.23% 29.10% 17.35% 66.68% 7.76% 58.92% 0.97% 0.39% 0.58% 0.49% 1.40% 100.00% $

Month4 % 7.98% 22.40% 0.06% 15.18% 0.18% 45.80% 17.97% 28.18% 14.16% 60.31% 7.08% 53.23% 0.89% 0.35% 0.53% 0.44% 1.44% 100.00%

$492,820 $1,382,454 $3,400 $937,091 $10,927 $2,826,692 $1,109,273 $1,739,091 $874,182 $3,722,545 $437,091 $3,285,454 $54,636 $21,855 $32,782 $27,318 $60,100 $6,172,246



Total Liabilities and Equity

Month3

Month4

11.64% 1.94% 1.94% 0.58% 1.75% 0.31% 18.16%

$640,563 $109,273 $109,273 $32,782 $98,345 $17,484 $1,007,719

10.38% 1.77% 1.77% 0.53% 1.59% 0.28% 16.33%

11.81% 1.94% 0.58% 0.97% 33.46%

$668,308 $109,273 $32,782 $54,636 $1,872,718

10.83% 1.77% 0.53% 0.89% 30.34%

1.83% 1.83% 33.89% 30.82% 66.54% 100.00%

$100,000 $100,000 $2,469,710 $1,729,818 $4,299,528 $6,172,246

1.62% 1.62% 40.01% 28.03% 69.66% 100.00%

ared by JaxWorks Consultancy, Inc.


The Prediction of Corporate FailureLogit Analysis: The Model Chistine ZavgrenBankruptcy 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 FailureLogit Analysis: The Model Chistine ZavgrenCash Marketable Securities Accounts Receivable Inventory Fixed Assets Total Assets Current Liabilities Long Term Debt Sales Income from Continuing Operations Logit Analysis Month 1 0.23883 -0.022 -1.385 -1.193 2.663 0.099 -0.809 0.068 -0.340 58.42% Month 2 0.23883 -0.026 -1.191 -1.112 2.982 0.140 -0.746 0.077 0.362 41.04% Month 3 0.23883 -0.034 -1.673 -0.964 4.211 0.121 -0.628 0.066 1.338 20.78% Month 4 0.23883 -0.032 -2.335 -0.880 5.754 0.152 -0.563 0.069 2.404 8.28% 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

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 Zavgrenknown, 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.


Market Value AnalysisOverviewThe 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


Market Value AnalysisOverview

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.



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.


Market Value AnalysisOverviewThe 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.



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

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