Vertical and Horizontal Analysis Strictly Confidential

Table of Contents
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Notes
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Vertical Analysis

Income Statement Year 5

Revenue 14,953,224
Total Revenue 14,953,224
Cost of Revenue, Total 8,368,961
Gross Profit 6,584,263
Selling/General/Administrative Expenses, Total 1,849,000
Research & Development 964,842
Depreciation/Amortization 310,357
Unusual Expenses (Income) 163,800
Other Operating Expenses, Total 0
Operating Income 3,296,264
Interest Expense 100
Income Before Tax 3,296,164
Income Tax - Total 809,366
Income After Tax 2,486,798
Total Extraordinary Items 0
Net Income 2,486,798

Ratios Year 5
Gross Profit Ratio
Operating Profit Ratio
Net Profit Ratio

Tax Ratio
Interest Coverage Ratio
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Horizontal Analysis

Income Statement Year 1 Year 2 Year 3

Revenue 2,065,845 3,037,103 6,009,395
Total Revenue 2,065,845 3,037,103 6,009,395
Cost of Revenue, Total 925,598 1,379,301 2,928,814
Gross Profit 1,140,247 1,657,802 3,080,581
Selling/General/Administrative Expenses, Total 515,625 537,428 880,964
Research & Development 158,887 236,173 359,828
Depreciation/Amortization 49,951 76,879 108,112
Unusual Expenses (Income) 0 0 0
Other Operating Expenses, Total 0 0 0
Operating Income 415,784 807,322 1,731,677
Interest Expense 483 494 518
Income Before Tax 415,301 806,828 1,731,159
Income Tax - Total 106,863 227,373 516,653
Income After Tax 308,438 579,455 1,214,506
Total Extraordinary Items 0 0 0
Net Income 308,438 579,455 1,214,506

Ratios Year 1 Year 2 Year 3

Gross Profit Ratio
Operating Profit Ratio
Net Profit Ratio

Tax Ratio
Interest Coverage Ratio
 Year 4 Year 5
11,065,186 14,953,224
11,065,186 14,953,224
5,967,888 8,368,961
5,097,298 6,584,263
1,495,195 1,849,000
684,702 964,842
194,803 310,357
0 163,800
0 0
2,722,598 3,296,264
502 100
2,722,096 3,296,164
907,747 809,366
1,814,349 2,486,798
0 0
1,814,349 2,486,798

Year 4 Year 5
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Benchmarking

Benchmarking TARGET Comp 1 Comp 2

Gross Margin 32.1% 35.4%
Operating Margin 3.0% 3.0%
Net Profit Margin 6.0% 1.8%
5Yr Gross Margin (5-year avg.) 33.6% 29.7%
5Yr Operating Margin (5-year avg.) 11.4% 4.7%
5Yr Net Profit Margin (5-year avg.) 8.7% 2.0%
Comp 3 Ind Avg
31.6% 39.5%
16.7% 16.4%
15.6% 11.9%
32.1% 38.4%
21.1% 15.8%
19.8% 11.2%