The XYZ Company

Comparative Balance Sheet - 4 Periods
Month

Month

Month

1

2

3

Month
4

Total Current Assets

$1,212,200

$1,550,530

$2,187,750

$2,826,692

Total Fixed Assets

$2,900,000

$2,997,000

$3,221,800

$3,285,454

Total Assets

$4,167,200

$4,604,180

$5,467,899

$6,172,246

$936,000

$964,080

$993,002

$1,007,719

Total Liabilities

$1,717,200

$1,773,680

$1,829,594

$1,872,718

Total Stockholders' Equity

$2,450,000

$2,320,500

$3,638,305

$4,299,528

Total Liabilities and Equity

$4,167,200

$4,094,180

$5,467,899

$6,172,246

$276,200

$586,450

$1,194,748

$1,818,973

Total Current Liabilities

Working Capital

© Copyright, 2004, JaxWorks, All Rights Reserved.

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

© Copyright, 2009, JaxWorks, All Rights Reserved.

ystem is designed for the owner or professional to quickly analyze the overall
are miniature chart snapshots of key financial analysis data. The MicroShots
elds instant results.

res in the "Master Data Entry" worksheet.
res in the "Cash Flow Data Entry" worksheet.
riods" worksheet. Here you will find the Primary Financial Predictors that
e business.
ysis" worksheet. All of the key analysis worksheets feed information back to
l fast assessment.
h Analysis" worksheet. This worksheet condenses everything into one printed

roShots" worksheet for some amazing fast analysis results.

Copyright, 2009, JaxWorks, All Rights Reserved.

Note: There is No Support For Free Downloads

© Copyright, 2009, JaxWorks, All Rights Reserved.

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 Analysis (2)
• Z-Score Analysis (3)
• 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

© Copyright, 2009, JaxWorks, All Rights Reserved.

© Copyright, 2009, JaxWorks, All Rights Reserved.

Income Statement
Month
1

Month
2

$2,010,000

$2,560,000

($50,000)

($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

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

Variable Expenses
Office salaries
Employee benefits
Payroll taxes
Sales and Marketing
Telephone and telegraph
Stationary and office supplies
Bad debts
Postage
Contributions
Add Item

1
$90,000
$43,000
$18,000
$14,000
$6,000
$2,110
$100
$5,557
$0
$0

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

Sales & Cost of Sales
Gross Sales
Discounts/Allowances
Net Sales

Gross Profit
Expenses

© Copyright, 2009, JaxWorks, All Rights Reserved.

Add Item
Add Item
Add Item
Add Item
Miscellaneous
Total Variable Expenses

$0
$0
$0
$0
$0
$178,767

$0
$0
$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

© Copyright, 2009, JaxWorks, All Rights Reserved.

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

2
$100,000
100,000

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

© Copyright, 2009, JaxWorks, All Rights Reserved.

Additional paid in capital
Retained earnings
Total Stockholders' Equity
Total Liabilities and Equity

$950,000
$1,400,000
$2,450,000

$678,500
$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
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

© Copyright, 2009, JaxWorks, All Rights Reserved.

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
Capital stock issued
Additional paid-in capital
Accumulated depreciation (as of 2005)

Depreciation

Capital

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

Forecasted
1

2

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

Expenses

Other income and expenses

© Copyright, 2009, JaxWorks, All Rights Reserved.

Gain (loss) on sale of assets
Other (net)
Subtotal

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

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

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

Forecast
1

ASSETS
Current Assets
Cash and cash equivalents
Accounts receivable
Inventory
Other current assets
Total Current Assets

$451,000
$350,000
$400,000
$10,000
$1,211,000

$90,360
$657,534
$630,411
$60,000
$1,438,305

Fixed Assets
Land
Buildings
Equipment

$100,000
$1,500,000
$800,000

$112,500
$1,450,000
$875,000

© Copyright, 2009, JaxWorks, All Rights Reserved.

Subtotal
Less-accumulated depreciation
Total Fixed Assets

$2,400,000
$400,000
$2,000,000

$2,437,500
$432,500
$2,005,000

Intangible Assets
Cost
Less-accumulated amortization
Total Intangible Assets

$50,000
$20,000
$30,000

$50,000
$21,250
$28,750

$25,000
$3,266,000

$33,000
$3,505,055

Other assets
Total Assets

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

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

Y
Positive
$0

Positive
$0

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

Total Liabilities and Equity

Forecast
1

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

© Copyright, 2009, JaxWorks, All Rights Reserved.

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

4
$118,647
$51,249
$19,669
$15,298
$6,556
$3,493
$109
$6,072
$0
$0

© Copyright, 2009, JaxWorks, All Rights Reserved.

$0
$0
$0
$0
$0
$209,659

$0
$0
$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

© Copyright, 2009, JaxWorks, All Rights Reserved.

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

4
$100,000
100,000

450794.61

© Copyright, 2009, JaxWorks, All Rights Reserved.

$1,853,045
$1,685,260
$3,638,305

$2,469,710
$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

© Copyright, 2009, JaxWorks, All Rights Reserved.

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

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

Current Portion
$100,000
$50,000

LT Portion
$500,000

Rate
10.00%
10.00%

Forecasted
3

4

4
30
30
45
60
7
20

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

© Copyright, 2009, JaxWorks, All Rights Reserved.

$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

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

$137,500
$1,450,000
$875,000

$150,000
$1,450,000
$875,000

© Copyright, 2009, JaxWorks, All Rights Reserved.

$2,450,000
$466,458
$1,983,542

$2,462,500
$500,416
$1,962,084

$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

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

$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

© Copyright, 2009, JaxWorks, All Rights Reserved.

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
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% of sales
12.00% of sales
10.00% of payroll
5.00% of payroll
2.00% of sales
3.00% of sales

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

Depreciation

© Copyright, 2009, JaxWorks, All Rights Reserved.

Capital

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

'C' Corporation format selected; income taxes WILL be computed
2
3
30
30
30
30
45
45
60
60
7
7
20
20

4
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

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

Current Portion
$100,000
$50,000

LT Portion
$500,000

Rate
10.00%
10.00%

© Copyright, 2009, JaxWorks, All Rights Reserved.

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 Period 1 (1000s)
Balance Sheet

3,500

Prior

Cur

Cash
Accounts Receivable

451.0
350.0

90.4
657.5

Inventory
Other CurrentAssets
CurrentAssets

400.0
10.0
1,211.0

630.4
60.0
1,438.3

(Thousands of $)

Sales
4 Periods

3,000
Grth

120.0
100.0
80.0

2,500
-360.6
2,000
307.5
1,500
230.4
1,000
50.0500
0

227.3

60.0
40.0
20.0
0.0
1

2

Thousands of $

FixedAssets

2,000.0

2,005.0

5.0

3,266.0

3,505.1

239.1

Accounts Payable

600.0

328.8

1,200
-271.2

Notes Payable
AccruedCurrentLiab
CurrentLiabilities

100.0
90.0
936.0

50.0
83.3
757.4

-50.0
800
-6.7600
-178.6400

Total Assets

Cash Flow
4 Periods
140.0

1,400

3

4

1

Thousands of $

Net Income
4 Periods

0.3
0.2
0.1
0.0

0

780.0
1,716.0

707.0
1,464.4

-73.0
1
2
-251.6Thousands of $

Capital
RetainedEarnings

100.0
1,400.0

100.0
1,890.7

0.0
490.7
3.0

RetErngs, This Yr
Total Equity

0.0
1,550.0

0.0
2,040.7

2.5
0.0
2.0
490.7

3

1

4

Ratio

Current Ratio
4 Periods

1,800
1,600
1,400
1,200
1,000
800
600
400
200
0

1.5

3,505.1

1.0
239.1
0.5
0.0
1
Ratio

4

0.4

1,000

Non-CurrentLiabilities
Total Liabilities

3,266.0

3

Debt Ratio
4 Periods

0.5

200

Total Liab&Equity

2

2

3

4

© Copyright, 2009, JaxWorks, All Rights Reserved.

2

3

4

Break-Even
4 Periods

1 of $2
Thousands

3

4

CASH FLOW STATEMENT 4 PERIODS
Forecasted
1
Cash from operations
Net earnings (loss)
Add-depreciation and amortization

2

$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

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

© Copyright, 2009, JaxWorks, All Rights Reserved.

Cash at beginning of period

$451,000

$90,360

Cash at the end of period

$90,360

$289,233

© Copyright, 2009, JaxWorks, All Rights Reserved.

Forecasted
3

Total
4 Periods

4

$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

© Copyright, 2009, JaxWorks, All Rights Reserved.

$289,233

$614,196

$451,000

$614,196

$1,267,364

$1,267,364

© Copyright, 2009, JaxWorks, All Rights Reserved.

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

Net cash from financing

($123,000)

($50,000)

$0

Net increase (decrease) in cash

($360,640)

$198,873

$324,963

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

© Copyright, 2009, JaxWorks, All Rights Reserved.

Cash at beginning of period

$451,000

$90,360

$289,233

Cash at the end of period

$90,360

$289,233

$614,196

© Copyright, 2009, JaxWorks, All Rights Reserved.

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

$12,500

$0

($7,500)

($15,000)

($22,500)

$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

© Copyright, 2009, JaxWorks, All Rights Reserved.

$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

© Copyright, 2009, JaxWorks, All Rights Reserved.

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

© Copyright, 2009, JaxWorks, All Rights Reserved.

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

Primary Financial Predictors - 4 Periods - Quick Anal

© Copyright, 2009, JaxWorks, All Rights Reserved.

Primary Financial Predictors - 4 Periods - Quick Anal
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)
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=

© Copyright, 2009, JaxWorks, All Rights Reserved.

0.06628
0.16468
0.73316
0.47034
1.25

Primary Financial Predictors - 4 Periods - Quick Anal
Logit 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

© Copyright, 2009, JaxWorks, All Rights Reserved.

Primary Financial Predictors - 4 Periods - Quick Anal
Less
H=

© Copyright, 2009, JaxWorks, All Rights Reserved.

-6.08
1.82

riods - 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

© Copyright, 2009, JaxWorks, All Rights Reserved.

All = All Predictors

riods - Quick Analysis

© Copyright, 2009, JaxWorks, All Rights Reserved.

riods - 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

© Copyright, 2009, JaxWorks, All Rights Reserved.

riods - 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

1.70
0.10
0.02
0.56
-0.04
0.42
3.77
0.71
1.63
8.88

1.55
0.11
0.03
0.78
-0.04
0.38
3.78
1.05
1.76
9.40

TREND

5
TREND

28% OK - Below 50%
Overall Trend is OK

© Copyright, 2009, JaxWorks, All Rights Reserved.

riods - Quick Analysis
-6.08
2.57

-6.08
2.80

-6.08
3.33

3.82 OK
2.63 Overall Trend is OK

© Copyright, 2009, JaxWorks, All Rights Reserved.

Fast Trak's Summary Analysis
The XYZ Company
FINANCIAL INDICATORS

Month
1
1

Month
2
2

Z Score: If Publicly Held
(Higher is Better)

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

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%

© Copyright, 2009, JaxWorks, All Rights Reserved.

Fast Trak's Summary Analysis
The XYZ Company
Liquidity Ratios
Acid Test (Quick Ratio)

0.87

0.97

Current Ratio

1.30

1.61

$350,000
$2,010,000
365
$5,507
63.56
5.74

$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

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
Inventory Turnover
Days Sales in AR
Receivables Turnover
Days Inventory
Debt ratio

Other Key Ratios

© Copyright, 2009, JaxWorks, All Rights Reserved.

Fast Trak's Summary Analysis
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%

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

70.09%

62.66%

1.43

1.60

Retained Earning to Net Income
Times Interest Earned

Total Liabilities to Net Worth (Debt Ratio)
Net Worth to Total Liabilities

© Copyright, 2009, JaxWorks, All Rights Reserved.

Fast Trak's Summary Analysis
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . .

© Copyright, 2009, JaxWorks, All Rights Reserved.

Fast Trak's Summary Analysis
The XYZ Company
CASH FLOW ANALYSIS
Month
1

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
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

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

© Copyright, 2009, JaxWorks, All Rights Reserved.

Fast Trak's Summary Analysis
The XYZ Company
Net cash from financing

($123,000)

($50,000)

Net increase (decrease) in cash

($360,640)

$198,873

Cash at beginning of period

$451,000

$464,530

Cash at the end of period

$90,360

$663,403

Prepared by JaxWorks Consultancy, Inc.

© Copyright, 2009, JaxWorks, All Rights Reserved.

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
Z is less than 1.23 then the firm is classified as Failed.

2.01 Trend is Upward

5.89
7.02
Z is less than 1.11 then the firm is classified as Failed.

7.92 Trend is Upward

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%

54.64% Trend is Upward

$7.99

$11.62

$13.21

Trend is Upward

30.13%

36.25%

39.06% Trend is Upward

14.61%

18.83%

20.37% Trend is Upward

21.96%

27.03%

28.20% Trend is Upward

© Copyright, 2009, JaxWorks, All Rights Reserved.

ak's Summary Analysis

The XYZ Company
1.37

1.88

2.13 Trend is Upward

2.20

2.81

3.26 Trend is Upward

$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

0.59 Trend is Downward

119.93

157.42

3.04

2.32

336.45

373.62

0.33

0.30

0.26 Trend is Downward

3.22

3.42

2.58 Trend is Downward

259.80

255.39

238.31 Trend is Downward

184.79 Trend is Upward
1.04 Trend is Downward
443.86 Trend is Upward

© Copyright, 2009, JaxWorks, All Rights Reserved.

ak's Summary Analysis

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

1.89 Trend is Downward

3.04

2.32

1.04 Trend is Downward

0.82

0.98

1.05 Trend is Upward

0.48

0.52

0.53 Trend is Upward

0.01

0.01

0.01 Trend is Downward

66.28%

71.44%

73.58% Trend is Upward

24.43%

20.99%

18.95% Trend is Downward

30.13%

36.25%

39.06% Trend is Upward

31.37%

38.61%

40.29% Trend is Upward

20.88%

26.90%

29.10% Trend is Upward

210.91%

148.86%

64.37

91.08

0.01

0.01

0.00 Trend is Downward

0.27

0.23

0.18 Trend is Downward

1.20

1.08

0.51 Trend is Downward

0.24

0.20

0.17 Trend is Downward

50.29%

43.56%

33.65% Trend is Downward

1.99

2.30

108.59% Trend is Downward
103.07 Trend is Upward

2.58 Trend is Upward

© Copyright, 2009, JaxWorks, All Rights Reserved.

ak's Summary Analysis

The XYZ Company

-8.1%
-3.01

Comments
Under-staffed

© Copyright, 2009, JaxWorks, All Rights Reserved.

ak's Summary Analysis

The XYZ Company
Month
3

Month
4

Trend
5

Comments

$799,039
$35,805

$1,162,043
$36,880

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

$834,845

$1,198,922

$1,359,286 Trend is Upward

$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) Trend is Upward
$5,422 Trend is Upward
$35,705 Trend is Upward
$43,500 Trend is Downward
$135,617 Trend is Upward
$0 Trend is Upward
$158,052 Trend is Upward
$28,763 Trend is Upward
$2,000 Trend is Upward
($50,000) Trend is Downward

$132,196

($116,149)

$312,244 Trend is Upward

$12,500
$0
$0
$0

$12,500
$0
$0
$0

$12,500 Trend is Upward
$25,000 Trend is Upward
($37,500) Trend is Downward
$0 Trend is Upward

$12,500

$12,500

$0 Trend is Downward

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

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

$25,000 Trend is Upward
$50,000 Trend is Upward
$5,000 Trend is Upward
$1,500 Trend is Upward
($20,000) Trend is Downward
$0 Trend is Upward

© Copyright, 2009, JaxWorks, All Rights Reserved.

ak's Summary Analysis

The XYZ Company
$0

$0

$61,500 Trend is Upward

$324,963

$653,168

$995,970 Trend is Upward

$478,466

$492,820

$506,553 Trend is Upward

$803,429

$1,145,988

$1,502,523 Trend is Upward

repared by JaxWorks Consultancy, Inc.

© Copyright, 2009, JaxWorks, All Rights Reserved.

Forecast Analysis- 12 Fiscal Periods
Income Statement

Gross Sales
Discounts/Allowances
Net Sales
Direct Material Cost
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
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

© Copyright, 2009, JaxWorks, All Rights Reserved.

Forecast Analysis- 12 Fiscal Periods
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

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

Return On Ownership

© Copyright, 2009, JaxWorks, All Rights Reserved.

Forecast Analysis- 12 Fiscal Periods
Balance Sheet
ASSETS
Current Assets
Cash and cash equivalents
Accounts receivable
Notes receivable
Inventory
Other current assets
Total 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

Month
3
$478,466
$871,315
$3,000
$824,360
$10,609
$2,187,750

Fixed Assets
Land
Buildings
Equipment
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

3
$1,106,090
$1,591,350
$948,720
$3,646,160
$424,360
$3,221,800

Intangible Assets
Cost
Less-accumulated amortization
Total Intangible Assets

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

© Copyright, 2009, JaxWorks, All Rights Reserved.

Forecast Analysis- 12 Fiscal Periods
Balance Sheet
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

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

Non-Current Liabilities
Long-term debt
Deferred income
Deferred income taxes
Other long-term liabilities
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

Stockholders' Equity
Capital stock issued
Additional paid in capital
Retained earnings
Total Stockholders' Equity

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

Total Liabilities and Equity
Altman Z-Score Analysis
Publicly Held Firm
Privately Held Firm
Service, Retail, Wholesale

1

2
2.40
1.35
4.09

3
2.70
1.68
4.83

3.04
1.62
5.89

Prepared by J

© Copyright, 2009, JaxWorks, All Rights Reserved.

There are instances where 4 financial periods are not enough. This worksheet allows you to post additiona
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 over time.
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

© Copyright, 2009, JaxWorks, All Rights Reserved.

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

© Copyright, 2009, JaxWorks, All Rights Reserved.

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

© Copyright, 2009, JaxWorks, All Rights Reserved.

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

4

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

Prepared by JaxWorks Consultancy, Inc.

© Copyright, 2009, JaxWorks, All Rights Reserved.

10
5.30
2.62
11.86

5.67
2.77
12.85

eriods are not enough. This worksheet allows you to post additional periods up
rmulas, so, be sure you save a backup copy for recovery.

ummary sheet to flag problem areas that are 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

© Copyright, 2009, JaxWorks, All Rights Reserved.

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

© Copyright, 2009, JaxWorks, All Rights Reserved.

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

© Copyright, 2009, JaxWorks, All Rights Reserved.

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

© Copyright, 2009, JaxWorks, All Rights Reserved.

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

2

3

4

$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

© Copyright, 2009, JaxWorks, All Rights Reserved.

Income Statement
Smoothing Forecast - 8 Periods

S

1
1

2

3
Net Sales
Total Operating Expenses

4
Cost of Goods Sold
EBIT*

5

6

Gross Profit (Margin)
Net Income After

7
G&A
Ownership**

8

2

Current Assets
Current Liabiliti

Prepared by JaxWorks Consultancy, Inc.

© Copyright, 2009, JaxWorks, All Rights Reserved.

3

ancial Summary Analysis

Month

Month

Month

Month

Trend

5

6

7

8

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

© Copyright, 2009, JaxWorks, All Rights Reserved.

Balance Sheet
Smoothing Forcast - 8 Periods

1

2

3

Current Assets
Current Liabilities

4

Inventory
Non-current
Liabilities

5

6

Other Assets
Total Liabilities

7

8

Total Assets
Equity

pared by JaxWorks Consultancy, Inc.

© Copyright, 2009, JaxWorks, All Rights Reserved.

The XYZ Company
6200 XYZ Drive
ABC, California 00000-0000
Phone: (000) 000-0000
FAX: (000) 000-0000
E-mail: someone@xyz.com
March 30, 2010

Comparative Income Statement - 4 Periods

Sales Revenue
Cost of Sales

Gross Profit
Fixed Expenses

Other Expenses
Income Before Tax

Income Taxes
Net Income (Loss)

Month

Month

1

Income Details

$

Gross Sales

Month

2
%

$

3
%

$

$2,010,000

102.55%

$2,560,000

102.40%

($50,000)

-2.55%

($60,000)

-2.40%

($70,000)

$1,960,000

100.00%

$2,500,000

100.00%

$2,651,800

Direct Material Cost

$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

Discounts/Allowances
Net Sales

Total Cost of Sales
Gross Profit

$2,721,800

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

Auto & Truck Expenses

$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

Home Office Business Expenses

$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

Legal & Professional Services

$1,000

0.05%

$1,330

0.05%

$1,670

Meals & Entertainment

$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

© Copyright, 2009, JaxWorks, All Rights Reserved.

Comparative Income Statement - 4 Periods

Sales Revenue
Cost of Sales

Gross Profit
Fixed Expenses

Other Expenses
Income Before Tax

Income Taxes
Net Income (Loss)

Month

Month

1

2

Month
3

Rent - Office Property

$8,750

0.45%

$9,110

0.36%

$9,544

Repairs

$1,000

0.05%

$1,030

0.04%

$1,061

Supplies

$1,000

0.05%

$1,030

0.04%

$1,061

Taxes - Business & Payroll

$1,000

0.05%

$1,030

0.04%

$1,061

Travel

$6,230

0.32%

$6,120

0.24%

$6,010

$11,974

0.61%

$12,374

0.49%

$14,186

$0

0.00%

$0

0.00%

$0

$329,993

16.84%

$335,065

13.40%

$385,138

Utilities
Other Expenses
Total Fixed Expenses

© Copyright, 2009, JaxWorks, All Rights Reserved.

Comparative Income Statement - 4 Periods

Sales Revenue
Cost of Sales

Gross Profit
Fixed Expenses

Other Expenses
Income Before Tax

Income Taxes
Net Income (Loss)

Month

Month

Month

1

2

3

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

Telephone and telegraph

$6,000

0.31%

$6,180

0.25%

$6,365

Stationary and office supplies

$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

Total Variable Expenses

$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

Gain (loss) on sale of assets

$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

$686,240

35.01%

$1,075,763

43.03%

$1,141,485

Other income and expenses

Subtotal
Income before tax

© Copyright, 2009, JaxWorks, All Rights Reserved.

Comparative Income Statement - 4 Periods

Sales Revenue
Cost of Sales

Gross Profit
Fixed Expenses

Other Expenses
Income Before Tax

Income Taxes
Net Income (Loss)

Month

Month

Month

1

2

3

Income taxes

$205,872

10.50%

$322,729

12.91%

$342,445

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

Prepared by JaxWorks Consultancy, Inc.

© Copyright, 2009, JaxWorks, All Rights Reserved.

March 30, 2010

me Taxes
Income (Loss)

Month

Month

3

4
%

$

%

102.64%

$3,285,454

-2.64%

($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%

© Copyright, 2009, JaxWorks, All Rights Reserved.

me Taxes
Income (Loss)

Month

Month

3

4
0.36%

$9,929

0.31%

0.04%

$1,093

0.03%

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%

© Copyright, 2009, JaxWorks, All Rights Reserved.

me Taxes
Income (Loss)

Month

Month

3

4

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%

© Copyright, 2009, JaxWorks, All Rights Reserved.

me Taxes
Income (Loss)

Month

Month

3

4
12.91%

$498,018

15.54%

30.13%

$1,162,043

36.25%

37.49%

$1,357,043

42.34%

pared by JaxWorks Consultancy, Inc.

© Copyright, 2009, JaxWorks, All Rights Reserved.

The XYZ Company
6200 XYZ Drive
ABC, California 00000-0000
Phone: (000) 000-0000
FAX: (000) 000-0000
E-mail: someone@xyz.com
March 30, 2010

Comparative Balance Sheet - 4 Periods

Total Current Assets
Total Fixed Assets

Total Assets
Total Current Liabilities

ASSETS

Total Liabilities
Total Stockholders' Equity

Total Liabilities and Equity

Month

Month

1

2

$

%

$

Month
3
%

$

Current Assets
Cash and cash equivalents

$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

$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

$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

Less-accumulated amortization

$20,000

0.48%

$20,600

0.45%

$21,218

Total Intangible Assets

Notes receivable
Inventory
Other current assets
Total Current Assets
Fixed Assets

Equipment
Subtotal
Less-accumulated depreciation
Total Fixed Assets
Intangible Assets

$30,000

0.72%

$30,900

0.67%

$31,827

Other assets

$25,000

0.60%

$25,750

0.56%

$26,523

Total All Other Assets

$55,000

1.32%

$56,650

1.36%

$58,350

$4,167,200

100.00%

$4,604,180

100.00%

$5,467,899

Total Assets

© Copyright, 2009, JaxWorks, All Rights Reserved.

Comparative Balance Sheet - 4 Periods

Total Current Assets
Total Fixed Assets

Total Assets
Total Current Liabilities

Total Liabilities
Total Stockholders' Equity

Total Liabilities and Equity

Month

Month

Month

1

2

3

LIABILITIES AND STOCKHOLDERS' EQUITY
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

Other current liabilities

$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

Current portion of long-term debt

Total Current Liabilities
Non-Current Liabilities

Deferred income taxes
Other long-term liabilities

$50,000

1.20%

$51,500

1.26%

$53,045

$1,717,200

41.21%

$1,773,680

43.32%

$1,829,594

Capital stock issued

$100,000

2.40%

$100,000

2.44%

$100,000

Number of shares issued

$100,000

2.40%

$100,000

2.44%

$100,000

Additional paid in capital

$950,000

22.80%

$678,500

16.57%

$1,853,045

Total Liabilities
Stockholders' Equity

$1,400,000

33.60%

$1,542,000

37.66%

$1,685,260

Total Stockholders' Equity

Retained earnings

$2,450,000

58.79%

$2,320,500

56.68%

$3,638,305

Total Liabilities and Equity

$4,167,200

100.00%

$4,094,180

100.00%

$5,467,899

Prepared by JaxWorks Consultancy, Inc.

© Copyright, 2009, JaxWorks, All Rights Reserved.

March 30, 2010

Total Liabilities and Equity

ty

Month

Month

3

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%

© Copyright, 2009, JaxWorks, All Rights Reserved.

Total Liabilities and Equity

ty

Month

Month

3

4

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.

© Copyright, 2009, JaxWorks, All Rights Reserved.

The Prediction of Corporate Failure
Logit Analysis: The Model
Chistine Zavgren

Bankruptcy prediction models are more generally known as measures of financial distress. The best-known, and most
used, multiple discriminant analysis method is the one proposed by Edward Altman, Professor of Finance at the Stern Sc
Business, New York University, The Z-Score Analysis or Zeta Model. Despite the positive results of his study, Altman’s mod
a key weakness: it assumed variables in the sample data to be normally distributed. "If all variables are not normally distr
the methods employed may result in selection of an inappropriate set of predictors". Chistine Zavgren developed a mod
corrected for this problem. Her model used logit analysis to predict bankruptcy. Due to its use of logit analysis, her m
considered "more robust". Further, logit analysis actually provides a probability (in terms of a percentage) of bankruptcy. A
probability calculated might be considered a measure of the effectiveness of management, i.e. effective management will n
a company to the verge of bankruptcy.

Application of the logit model requires four steps. First, a series of seven financial ratios are calculated. Second, each
multiplied by a coefficient unique to that ratio. This coefficient can be either positive or negative. Third, the resulting valu
summed together (y). Finally, the probability of bankruptcy for a firm is calculated as the inverse of (1 + ey) where "e" is th
of natural logarithms."Explanatory variables with a negative coefficient increase the probability of bankruptcy because they
ey toward zero, with the result that the bankruptcy probability function approaches 1/1, or 100 percent. Likewise, indep
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

© Copyright, 2009, JaxWorks, All Rights Reserved.

The Prediction of Corporate Failure
Logit Analysis: The Model
Chistine Zavgren
Cash
Marketable Securities
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

Prepared by JaxWorks Consultancy, Inc.

© Copyright, 2009, JaxWorks, All Rights Reserved.

iction of Corporate Failure

ogit Analysis: The Model
Chistine Zavgren

y known as measures of financial distress. The best-known, and most-widely
e one proposed by Edward Altman, Professor of Finance at the Stern School of
ysis or Zeta Model. Despite the positive results of his study, Altman’s model had
ple data to be normally distributed. "If all variables are not normally distributed,
an inappropriate set of predictors". Chistine Zavgren developed a model that
analysis to predict bankruptcy. Due to its use of logit analysis, her model is
ctually provides a probability (in terms of a percentage) of bankruptcy. Also, the
sure of the effectiveness of management, i.e. effective management will not lead

. First, a series of seven financial ratios are calculated. Second, each ratio is
is coefficient can be either positive or negative. Third, the resulting values are
nkruptcy for a firm is calculated as the inverse of (1 + ey) where "e" is the base
negative coefficient increase the probability of bankruptcy because they reduce
cy probability function approaches 1/1, or 100 percent. Likewise, independent
robability of bankruptcy".

lure: The State of the Art, Journal of Accounting Literature

© Copyright, 2009, JaxWorks, All Rights Reserved.

iction of Corporate Failure

ogit Analysis: The Model
Chistine Zavgren

ared by JaxWorks Consultancy, Inc.

© Copyright, 2009, JaxWorks, All Rights Reserved.

Market Value Analysis
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 company’s 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 commo
is to get an established asset base. It is much easier to buy assets than to build them. Evaluation methods should ta
characteristics into consideration. However, too many business sellers and buyers depend on rules of thumb that i
unique features of small companies. For example, cable TV franchises are valued at 11 times cash flow; advertising ag
75 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 th
too much, you can be led astray. On average, businesses sell for one third less than the accepted industry rule of thumb.
There are three techniques and several variations for determining the value of a business:
1 The balance sheet technique.
2 The earnings approach.
3 The market (or price/earnings) approach .

Balance Sheet Technique.
The balance sheet technique is one of the most commonly used methods of evaluating a business, although it is n
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 recogni
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 th

© Copyright, 2009, JaxWorks, All Rights Reserved.

Market Value Analysis
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 company’s 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 ma
three types of inventory, each having its own method of valuation: raw materials, work in-process, and finished goods. T
and the seller must arrive at a method for evaluating the inventory First-in-first-out (FIFO), last-in-first out (LIFO), and
costing are three frequently used techniques, but the most common methods use the cost of last purchase and the rep
value of the inventory. Before accepting any inventory value, the buyer should evaluate the condition of the goods.

One young couple purchased a lumber yard without examining the inventory completely. After completing the s
discovered that most of the lumber in a warehouse they had neglected to inspect was warped and was of little value a
material. The bargain price they paid for the business turned out not to be the good deal they had expected. To a
problems, some buyers insist on having a knowledgeable representative on an inventory team that counts the inve
checks its condition. Nearly every sale involves merchandise that cannot be sold; but, by taking this precaution, a buyer
the chance of being 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 cond
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 futur
potential of the business. These techniques value assets at current prices and do not consider them as tools for creat
profits. The next method for computing the value of a business is based on its expected future earnings.

Earnings Approach.
The buyer of an existing business is essentially purchasing its future income. The earnings approach is more refined 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 liabi
an estimate of its future earnings potential to determine a business's selling price. One advantage of this technique is th
an estimate of goodwill. Goodwill is an intangible asset that often creates problems in a business sale. In fact, the mos
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 company’s 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.

© Copyright, 2009, JaxWorks, All Rights Reserved.

Market Value Analysis
Overview

The XYZ Company
Opportunity Costs represent the cost of forgoing a choice. If the buyer chooses to purchase the assets of a business, h
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, t
the rate of return. A normal-risk business typically indicates a 25 percent rate of return.

© Copyright, 2009, JaxWorks, All Rights Reserved.

Market Value Analysis
Overview
The XYZ Company
The second part of the buyer’s opportunity cost is the salary she could earn working for someone else.

Step 3: Project net earnings. The buyer must estimate the company's net earnings for the upcoming year before 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 company’s 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 estima
intangible assets’ value. The years of profit figure for a normal risk business ranges from three to four. A very high-risk
may have a years of profit figure of 1, while a well-established firm might use a figure of 7.

Step 6: Determine the value of the business. To determine the value of the business, the buyer simply adds the 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 th
be depreciated or amortized for tax purposes. Instead, the buyer would prefer to pay the seller for signing a covena
compete because its value is fully tax deductible.

The success of this approach depends on the accuracy of the buyer's estimates of net earnings and risk. But, it do
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
the 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.

© Copyright, 2009, JaxWorks, All Rights Reserved.

Market Value Analysis
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 dol
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. The
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 impo
the 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 me
develop three forecasts-an optimistic, a pessimistic, and a most likely for each year and then find a weighted average
formula.
The buyer must remember that the farther into the future he forecasts, the less reliable are his estimates .
Step 2: Discount these future earnings at the appropriate present value rate.
The rate the buyer selects should reflect the rate he could earn on a similar risk investment.
Step 3: Estimate the income stream beyond five years.
One technique suggests multiplying the fifth year income by 1/rate of return.
Step 4: Discount the income estimate beyond five years using the present value factor for the sixth year.

Step 5: Compute the total value.
The primary advantage of this technique is that it values a business solely on the basis of its future earning 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.

© Copyright, 2009, JaxWorks, All Rights Reserved.

Market Value Analysis
Overview

The XYZ Company
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.

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.

© Copyright, 2009, JaxWorks, All Rights Reserved.

Market Value Analysis
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. Buye
look for values that might cluster together and then use their best judgment to determine their offering price.
Prepared by JaxWorks Consultancy, Inc.

© Copyright, 2009, JaxWorks, All Rights Reserved.

Market Value Analysis
Overview
The XYZ Company

etermining 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
ays 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.

y’s 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
d 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
o many business sellers and buyers depend on rules of thumb that ignore the
ple, cable TV franchises are valued at 11 times cash flow; advertising agencies at
at $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

esses is "Don't use rules of thumb to value businesses.” If you rely on these rules
usinesses sell for one third less than the accepted industry rule of thumb.

ost commonly used methods of evaluating a business, although it is not highly
uation process. This method computes the company's net worth or owner's equity
ure 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.

© Copyright, 2009, JaxWorks, All Rights Reserved.

Market Value Analysis
Overview

The XYZ Company
e. A more realistic method for determining a company's value is to adjust the book
e. The values reported on a company’s 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

sses, inventory usually is the largest single asset involved in the sale. Taking a
termine accurately the quantity of goods to be transferred. The sale may include
method of valuation: raw materials, work in-process, and finished goods. The buyer
aluating the inventory First-in-first-out (FIFO), last-in-first out (LIFO), and average
but the most common methods use the cost of last purchase and the replacement
entory value, the buyer should evaluate the condition of the goods.

d without examining the inventory completely. After completing the sale, they
ouse they had neglected to inspect was warped and was of little value as building
business turned out not to be the good deal they had expected. To avoid such
owledgeable representative on an inventory team that counts the inventory and
merchandise that cannot be sold; but, by taking this precaution, a buyer minimizes
ory.

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

et method suffer one major drawback: they do not consider the future earning
lue assets at current prices and do not consider them as tools for creating future
e of a business is based on its expected future earnings.

y purchasing its future income. The earnings approach is more refined because it
iness.

ach.

ethod combines both the value of the firm's existing assets (over its liabilities) and
etermine a business's selling price. One advantage of this technique is that it offers
le 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..

yer should compute the firm's adjusted tangible net worth.
) minus total liabilities yields adjusted tangible net worth.

ting in the business.

© Copyright, 2009, JaxWorks, All Rights Reserved.

Market Value Analysis
Overview

The XYZ Company
g 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

e 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
bonds. To determine the appropriate rate of return for investing in a business, the
cting the risk involved in purchasing the company. The greater the risk, the higher
lly indicates a 25 percent rate of return.

© Copyright, 2009, JaxWorks, All Rights Reserved.

Market Value Analysis
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.

pany’s 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
g the extra earning power by a years of profit figure yields an estimate of the
ure for a normal risk business ranges from three to four. A very high-risk business
ell-established 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
Instead, the buyer would prefer to pay the seller for signing a covenant not to
e.

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

nvolved in purchasing the business to determine the appropriate rate of return on
the higher the return the buyer requires. Risk determination is always somewhat
uation. 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.

© Copyright, 2009, JaxWorks, All Rights Reserved.

Market Value Analysis
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
e. 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
n sweepstake winners. Rob wins $1 million in a sweepstakes, but he receives it in
nvested 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.
w by a constant amount over the next five years. Perhaps a better method is to
mistic, and a most likely for each year and then find a weighted average using the

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.

at 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

he price/earnings ratios of similar businesses to establish the value of a company.
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.

te 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.

© Copyright, 2009, JaxWorks, All Rights Reserved.

Market Value Analysis
Overview

The XYZ Company
en, it is extremely difficult for a buyer to find comparable publicly held companies

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.

© Copyright, 2009, JaxWorks, All Rights Reserved.

Market Value Analysis
Overview
The XYZ Company

ng the value of a small business? Simply stated, there is no single best method.
a science. Using these techniques, a range of values will emerge. Buyers should
hen use their best judgment to determine their offering price.

epared by JaxWorks Consultancy, Inc.

© Copyright, 2009, JaxWorks, All Rights Reserved.

Market Value Analysis
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

© Copyright, 2009, JaxWorks, All Rights Reserved.

Forecasted Earnings
$1,325,783

Market Value Analysis
6
7
8
9

© Copyright, 2009, JaxWorks, All Rights Reserved.

$1,535,583
$1,745,383
$1,955,183
$2,164,983

Market Value Analysis
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

10
8
© Copyright, 2009, JaxWorks, All Rights Reserved.
6
4

Market Value Analysis
10
8
6
4
2
0

Prepared by JaxWorks Consultancy, Inc.

© Copyright, 2009, JaxWorks, All Rights Reserved.

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
--------------------------------------------------------------------25.00%
$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

Present Value Factor
0.8000

= Net Present Value
$1,060,626

© Copyright, 2009, JaxWorks, All Rights Reserved.

X
X
X
X

0.6400
0.5120
0.4096
0.3277

$982,773
$893,636
$800,843
$709,465
Total

$3,737,878

© Copyright, 2009, JaxWorks, All Rights Reserved.

1
-------------Rate of Return

X

4.00

Discount income stream beyond four years (using fifth year present value factor)
$8,659,931
$1,605,205

+

X

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

© Copyright, 2009, JaxWorks, All Rights Reserved.

pared by JaxWorks Consultancy, Inc.

© Copyright, 2009, JaxWorks, All Rights Reserved.

The XYZ Company
6200 XYZ Drive
ABC, California 00000-0000
Phone: (000) 000-0000
FAX: (000) 000-0000
E-mail: someone@xyz.com
March 30, 2010

Comparative Payroll Analysis

Payroll Analysis

What-if

This analysis uses simple direct proportions.

W

Refer to it as a payroll performance snapshot in positive & negative situations.
CURRENT NUMBER OF EMPLOYEES

Use the spinners to e

37

CURRENT NUMBER OF EMPLOYEES

CURRENT SALES ANNUALIZED (Weekly X 52 Weeks)

$3,399,968

CURRENT SALES ANNUALIZED (Weekly X 5

CURRENT COMPLETED YEAR SALES

$3,285,454

CURRENT COMPLETED YEAR SALES

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 PAYROLL LEVEL, TO PRODUCE PROFITS

SALES VOLUME REQUIRED, AT CURRENT

EQUAL TO THE PREVIOUS YEAR PROFITS--------

EQUAL TO THE PREVIOUS YEAR PROFITS-

$3,666,922

SALES DEFICIENCY = SALES REQUIRED MINUS CURRENT VOLUME

SALES DEFICIENCY = SALES REQUIRED M

SALES DEFICIENCY IS---------------

SALES DEFICIENCY IS---------------

($266,954)

GROSS PAYROLL ALLOWABLE

GROSS PAYROLL ALLOWABLE

UNDER PROJECTED CONDITIONS-----

$324,579

GROSS PAYROLL BURDEN IS------

($25,485)

UNDER PROJECTED CONDITIONS----OR

-8.1%

THE NUMBER OF NEEDED EMPLOYEES ON THE PAYROLL . . . . . . . . . . . . . . . . . . . . . . . . .-3.01
...

GROSS PAYROLL BURDEN IS------

THE NUMBER OF EXCESS EMPLOYEES ON

Prepared by JaxWorks Consultancy, Inc.

© Copyright, 2009, JaxWorks, All Rights Reserved.

March 30, 2010

rative Payroll Analysis
Reset Spinners

Calculator

What-if Payroll Analysis
What-if Analysis
Use the spinners to experiment with the payroll demand.
CURRENT NUMBER OF EMPLOYEES

37

CURRENT SALES ANNUALIZED (Weekly X 52 Weeks)

$3,399,968

100%

CURRENT COMPLETED YEAR SALES

$3,285,454

100%

$350,064

100%

$313,647

100%

CURRENT PAYROLL ANNUALIZED (Weekly X 52 Weeks)

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)

OR

THE NUMBER OF EXCESS EMPLOYEES ON THE PAYROLL . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ed by JaxWorks Consultancy, Inc.

© Copyright, 2009, JaxWorks, All Rights Reserved.

-8.1%
-3.01

The XYZ Company
6200 XYZ Drive
ABC, California 00000-0000
Phone: (000) 000-0000
FAX: (000) 000-0000
E-mail: someone@xyz.com
March 30, 2010

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

© Copyright, 2009, JaxWorks, All Rights Reserved.

$11,089,274
$100,000
($936,000)
($601,200)
$9,652,074
100,000

Value per share

$96.52

Prepared by JaxWorks Consultancy, Inc.

© Copyright, 2009, JaxWorks, All Rights Reserved.

March 30, 2010

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

$4,665,160

$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

$1,162,043
($348,613)
$813,430
$14,370,595
$15,184,025
71.18%
$10,807,689
$11,089,274

© Copyright, 2009, JaxWorks, All Rights Reserved.

Prepared by JaxWorks Consultancy, Inc.

© Copyright, 2009, JaxWorks, All Rights Reserved.

The XYZ Company
6200 XYZ Drive
ABC, California 00000-0000
Phone: (000) 000-0000
FAX: (000) 000-0000
E-mail: someone@xyz.com
March 30, 2010

Breakdown of Operating Costs
TOTAL OPERATING COSTS
COMPARATIVE PERIODS

Month
1

Total For Period

Month

Month

2

3

Month
4

5

$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

1

2

3

4

$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

1

2

3

4

5

$320,000

$427,600

$431,238

$432,513

$488,132

$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 DAY
1 HOUR

Trend

1 MINUTE
OTHER EXPENSES
COMPARATIVE PERIODS
Total For Period
1 DAY
1 HOUR
1 MINUTE

Month

Month

Month

Month

1

2

3

4

$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

Prepared by JaxWorks Consultancy, Inc.

© Copyright, 2009, JaxWorks, All Rights Reserved.

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

© Copyright, 2009, JaxWorks, All Rights Reserved.

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
• Market Value of Equity
• 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.

© Copyright, 2009, JaxWorks, All Rights Reserved.

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
Return on Total Assets
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

Market Value of Equity

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

© Copyright, 2009, JaxWorks, All Rights Reserved.

Z-Score Analysis Publicly Held

Z-Score Analysis - Publicly Held
4.00
3.51

3.50
3.04
3.00

2.70

2.502.40
2.00
1.50
1.00
0.50
0.00
Periods
Row 77

© Copyright, 2009, JaxWorks, All Rights Reserved.

Analysis Publicly Held

Z-Score Analysis - Publicly Held

3.51
3.04
2.70

Periods
Row 77

© Copyright, 2009, JaxWorks, All Rights Reserved.

The Altman Z-Score Analysis - Privately 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
• Market Value of Equity
• 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.

© Copyright, 2009, JaxWorks, All Rights Reserved.

The Altman Z-Score Analysis - Privately 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.
x Weight
Ratio
Return on Total Assets
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

Market Value of Equity

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 ABOVE 2.90--YOU'RE IN GOOD SHAPE
Z-SCORE BETWEEN 2.90 and 1.23--WARNING SIGNS
Z-SCORE BELOW 1.23--BIG TROUBLE--COULD BE HEADING TOWARD BANKRUPTCY

© Copyright, 2009, JaxWorks, All Rights Reserved.

Z-Score Analysis Privately Held

Z-Score Analysis - Privately Held
2.00
1.80

1.88
1.68

1.62

1.60
1.401.35
1.20
1.00
0.80
0.60
0.40
0.20
0.00
Periods
Row 75

© Copyright, 2009, JaxWorks, All Rights Reserved.

Analysis Privately Held

Z-Score Analysis - Privately Held
1.88
1.68

1.62

Periods
Row 75

© Copyright, 2009, JaxWorks, All Rights Reserved.

The Altman Z-Score Analysis - Nonmanufacturing
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
• Market Value of Equity
• 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.

© Copyright, 2009, JaxWorks, All Rights Reserved.

The Altman Z-Score Analysis - Nonmanufacturing
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.
x Weight
Ratio
Return on Total Assets
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

Market Value of Equity

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 ABOVE 2.6--YOU'RE IN GOOD SHAPE
Z-SCORE BETWEEN 2.6 and 1.11--WARNING SIGNS
Z-SCORE BELOW 1.11--BIG TROUBLE--COULD BE HEADING TOWARD BANKRUPTCY

© Copyright, 2009, JaxWorks, All Rights Reserved.

Z-Score Analysis Nonmanufacturing

Z-Score Analysis - Nonmanufacturing
8.00
7.02

7.00
5.89

6.00
5.00

4.83

4.09
4.00
3.00
2.00
1.00
0.00
Periods
Row 75

© Copyright, 2009, JaxWorks, All Rights Reserved.

nalysis Nonmanufacturing

Z-Score Analysis - Nonmanufacturing

7.02
5.89
4.83

Periods
Row 75

© Copyright, 2009, JaxWorks, All Rights Reserved.

Z-Score Analysis
Category
Altman Z Score - Publicly Held
Altman Z Score - Privately Held
Altman Z Score - Non-manufacturing

1

2
2.40
1.35
4.09

© Copyright, 2009, JaxWorks, All Rights Reserved.

3
2.70
1.68
4.83

3.04
1.62
5.89

Z-Score Analysis
Category
Altman Z Score - Publicly Held
Altman Z Score - Privately Held
Altman Z Score - Non-manufacturing

© Copyright, 2009, JaxWorks, All Rights Reserved.

4
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

© Copyright, 2009, JaxWorks, All Rights Reserved.

0

YEAR
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

250%
200%
150%
100%
50%
0%
Year 1

Year 2

© Copyright, 2009, JaxWorks, All Rights Reserved.

Year 3

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

© Copyright, 2009, JaxWorks, All Rights Reserved.

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%

Return on investment

Year 2

Year 3

© Copyright, 2009, JaxWorks, All Rights Reserved.

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

© Copyright, 2009, JaxWorks, All Rights Reserved.

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
Information Technology
Accounting
Sales
Operations
Marketing
Corporate Totals

Department
Executive
Finance
Human Resources
Information Technology
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

© Copyright, 2009, JaxWorks, All Rights Reserved.

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

© Copyright, 2009, JaxWorks, All Rights Reserved.

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

© Copyright, 2009, JaxWorks, All Rights Reserved.

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

© Copyright, 2009, JaxWorks, All Rights Reserved.

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

© Copyright, 2009, JaxWorks, All Rights Reserved.

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
Information Technology
Vice president
Director
Systems engineer
Systems analyst
Technician
Support
Architect
Programmer
Total
Accounting
Vice president

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

© Copyright, 2009, JaxWorks, All Rights Reserved.

Corporate Headcount and Payroll Analysis
HEADCOUNT SUMMARY

Q1

Q2

Q3

Controller
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
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

© Copyright, 2009, JaxWorks, All Rights Reserved.

Corporate Headcount and Payroll Analysis
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
Information Technology
Accounting
Sales
Operations
Marketing
Corporate Totals

Department
Executive
Finance
Human Resources
Information Technology

Total number
of employees
20
24
40
42
28
44
36
20
254

Total number
of employees
20
24
40
42

© Copyright, 2009, JaxWorks, All Rights Reserved.

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%

Corporate Headcount and Payroll Analysis
HEADCOUNT SUMMARY

Q1

Q2

Q3

Accounting
Sales
Operations
Marketing

28
44
36
20

11.0%
17.3%
14.2%
7.9%

Corporate Totals

254

100.0%

© Copyright, 2009, JaxWorks, All Rights Reserved.

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

4.00

$130,000

$32,500

$32,500

$32,500

$32,500

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

© Copyright, 2009, JaxWorks, All Rights Reserved.

Q4

Annual total
1.00
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
4.00
0.00
28.00

95,000
75,000
55,000
55,000
75,000
55,000

23,750
18,750
13,750
13,750
18,750
13,750
0
$135,000

23,750
18,750
13,750
13,750
18,750
13,750
0
$135,000

23,750
18,750
13,750
13,750
18,750
13,750
0
$135,000

23,750
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

© Copyright, 2009, JaxWorks, All Rights Reserved.

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

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

% of total
20.5%
10.3%
11.5%
13.1%

Quarterly metrics:

© Copyright, 2009, JaxWorks, All Rights Reserved.

Stock-based
compensation
$200,000
50,000.00
0.00
0.00
0.00
0.00
0.00
0.00
$250,000

Q4

Annual total

702,000
1,650,000
951,750
897,000

7.4%
17.5%
10.1%
9.5%

$9,425,250

100.0%

Annual
salary

Q1 cost
Q1
Q2
Q3
Q4

Q2 cost

Q3 cost

Q4 cost

Salary

Benefits

Salary + benefits

$1,646,250
1,651,250
1,671,250
1,671,250
$6,640,000

© Copyright, 2009, JaxWorks, All Rights Reserved.

$411,563
412,813
417,813
417,813
$1,660,000

$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

© Copyright, 2009, JaxWorks, All Rights Reserved.

Annual cost
95,000
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

© Copyright, 2009, JaxWorks, All Rights Reserved.

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

© Copyright, 2009, JaxWorks, All Rights Reserved.

Annual cost

© Copyright, 2009, JaxWorks, All Rights Reserved.

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.

JaxWorks Small Business Spreadsheet Factory

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

s

ides are in

ncial
analysis,

about MS Excel and other applications in the Office

sheet Factory

Copyright Notice
© 2009, JaxWorks
All rights reserved.
Specifications are subject to change without notice.

JaxWorks Fast Trak™ is a registered trademarks of Jaxworks and affiliated companies. All other brands or products ar
respective holders and should be treated as such.
NOTICES REGARDING SOFTWARE, DOCUMENTS AND SERVICES.

IN NO EVENT SHALL JAXWORKS BE LIABLE FOR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES OR
RESULTING FROM LOSS OF USE, DATA OR PROFITS, WHETHER IN AN ACTION OF CONTRACT, NEGLIGENCE
OUT OF OR IN CONNECTION WITH THE USE OR PERFORMANCE OF SOFTWARE, DOCUMENTS, PROVISION O
INFORMATION AVAILABLE FROM THIS PROGRAM.

© Copyright, 2009, JaxWorks, All Rights Reserved.

Copyright Notice

otice.

ks of Jaxworks and affiliated companies. All other brands or products are trademarks or registered trademarks of their
ch.

MENTS AND SERVICES.

E FOR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES WHATSOEVER
PROFITS, WHETHER IN AN ACTION OF CONTRACT, NEGLIGENCE OR OTHER TORTIOUS ACTION, ARISING
E OR PERFORMANCE OF SOFTWARE, DOCUMENTS, PROVISION OF OR FAILURE TO PROVIDE SERVICES, OR
GRAM.

© Copyright, 2009, JaxWorks, All Rights Reserved.

License Agreement
Products by JaxWorks
Copyright (C) 2009 JaxWorks
All Rights Reserved
WARNING
=================
This program is protected by copyright law and international treaties.
Unauthorized reproduction or distribution of this program, or any portion
of it may result in severe civil and criminal penalties, and will be
prosecuted to the maximum extent possible under law.
LICENSE AGREEMENT
=================
You should read the following terms and conditions carefully before using
this software. Your use of this software indicates your full acceptance of
this license agreement and warranty.
LICENSE AGREEMENT
======================================
1. GRANTING OF LICENSE. JaxWorks, as Licenser, grants to you, the Licensee,
a non-exclusive license to use this software program (hereinafter referred
to as the "SOFTWARE") in accordance with the terms contained in this license.
You may use the SOFTWARE on a single desk top computer and one notebook computer.
You may access the SOFTWARE through a network, provided that you have obtained individual
licenses for the software to cover all workstations that will access the software through
the network.
2. COPYRIGHT. All title and copyrights in and to the SOFTWARE, including but
not limited to any images, texts, and sounds incorporated into the SOFTWARE,
are owned by JaxWorks.
3. REDISTRIBUTION. You CAN NOT freely distribute this SOFTWARE.
4. DISCLAIMER OF WARRANTY. THE SOFTWARE AND THE ACCOMPANYING FILES ARE PROVIDED
"AS IS" WITHOUT WARRANTY OF ANY KIND. TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW, JAXWORKS DISCLAIMS ALL WARRANTIES, EXPRESSED OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF PERFORMANCE,
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NONINFRINGEMENT.
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL JAXWORKS
BE LIABLE FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL OR INCIDENTAL DAMAGES
(INCLUDING, BUT NOT LIMITED TO, DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS
INTERRUPTION OR LOSS OF BUSINESS INFORMATION) ARISING OUT OF THE USE OF OR
INABILITY TO USE THE SOFTWARE, EVEN IF JAXWORKS HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.

JaxWorks
http://www.jaxworks.com

© Copyright, 2009, JaxWorks, All Rights Reserved.

© Copyright, 2009, JaxWorks, All Rights Reserved.

License Agreement

onal treaties.
m, or any portion
d will be

fully before using
ll acceptance of

ants to you, the Licensee,
ereinafter referred
ontained in this license.

omputer and one notebook computer.
provided that you have obtained individual
hat will access the software through

FTWARE, including but
d into the SOFTWARE,

this SOFTWARE.

D THE ACCOMPANYING FILES ARE PROVIDED
E MAXIMUM EXTENT PERMITTED BY
RRANTIES, EXPRESSED OR IMPLIED,
ARRANTIES OF PERFORMANCE,
URPOSE, AND NONINFRINGEMENT.
ABLE LAW, IN NO EVENT SHALL JAXWORKS
ENTIAL OR INCIDENTAL DAMAGES
LOSS OF BUSINESS PROFITS, BUSINESS
ION) ARISING OUT OF THE USE OF OR
ORKS HAS BEEN ADVISED OF THE

© Copyright, 2009, JaxWorks, All Rights Reserved.

© Copyright, 2009, JaxWorks, All Rights Reserved.

Sign up to vote on this title
UsefulNot useful