business model

Before you start The spreadsheet has circular reasoning. This is not a problem. Go into calculation options (in excel) and check the iteration box. What the model does This model is designed to value firms with operating income that is either positive or can be normalized to be positive. It allows for up to 15 years of high growth, and can be used either as a 2-stage or a 3-stage model. Inputs The inputs are in the following pages: 1. The bulk of the inputs are in the master inputs page. Here, you can input the numbers from the current financial statements, and review and change the inputs for the valuation. 2. If you want to normalized operating income, use the earnings normalizer worksheet. 3. If you have R&D or operating leases, you will need to input the required numbers in those worksheets. Options The spreadsheet can be used to value a company, with fixed inputs for a high growth phase and different inputs for a stable growth phase (2-stage model) or it can be adjusted to allow for a transition phase (3-stage model). To switch from one to the other, enter yes in the master input page to the question of whether you want the inputs adjusted during the second half of the high growth phase. You can even make it a stable growth model, by setting the length of the high growth period to zero. Other worksheetsThere are two other worksheets that you might find useful at the end of this spreadsheet 1. Bottom-up beta estimator: will estimate your levered beta, given an unlevered beta (which you will have to input. 2. Industry averages: Here, you can look up industry averages for variables such as beta, return on capital, reinvestment rates and working capital. Output The output is contained in the valuation model worksheet.in excel) and check be normalized to be 3-stage model. and different inputs phase (3-stage model). whether you want the which you will have to return on capital, Master Input Sheet Do you want to capitalize R&D expenses? No ! Yes or No Go to R&D Converter Do you want to convert operating leases to debt? No ! Yes or No Go to Operating lease converter Do you want to normalize operating income? Yes Go to Earnings Normalizer Inputs From Current Financials Current EBIT = $382.60 ! If negative, go back and choose to normalize earnings. Current Interest Expense = $91.90 Current Capital Spending $752.90 Current Depreciation & Amort'n = $438.10 Tax Rate on Income = 30.00% Previous year-end Current Revenues = $3,248.00 3156 Current Non-cash Working Capital = $179.90 Chg. Working Capital = ($24.90) Previous year-end Book Value of Debt = $284.20 798.8 Book Value of Equity = $1,664.10 1478.9 Cash & Marketable Securities = $1,697.40 Value of Non-operating Assets = $61.20 Market Data for your firm Is your stock currently traded? Yes If yes, enter the following: Current Stock Price = $890.00 Number of shares outstanding = 8.65 Market Value of Debt = $284.20 If no, enter the following Would you like to use the book value debt ratio? No If no, enter the debt ratio to use in valuation 35% General Market Data Long Term Treasury bond rate= 5.00% Risk premium for equity = 13.69% Ratings Do you want to estimate the firm's synthetic rating = No ! If yes, use the rating estimator worksheet that is attached If yes, choose the type of firm 1 If not, what is the current rating of the firm? AA Enter the cost of debt associated with the rating = 11.08% Options Do you have equity options (management options, warrants) outstanding? No If yes, enter the number of options 5.00 Average strike price $2.00 Average maturity 4 Standard Deviation in stock price 32% Valuation Inputs High Growth Period Length of high growth period = 10Beta to use for high growth period for your firm= 0.66 Do you want to keep the debt ratio computed from your inputs? Yes If yes, the debt ratio that will be used to compute the cost of capital is 3.56% If no, enter the debt ratio that you would like to use in the high growth period Do you want to keep the existing ratio of working capital to revenue? Yes If yes, the working capital as a percent of revenues will be 5.54% If no, enter the ratio of working capital to revenues to use in analysis Do you want to compute your growth rate from fundamentals? Yes If no, enter the expected growth rate in operating income for high growth period 15% If yes, the inputs to the fundamental growth calculation (based upon your inputs) are Return on Capital = 14.69% Reinvestment Rate = 95.61% Do you want to change these inputs? No Return on Capital = 16.00% Reinvestment Rate = 80.00% Do you want me to gradually adjust your high growth inputs in the second half? No Stable Growth Period Growth rate during stable growth period = 5.00% Beta to use in stable growth period = 0.80 Risk premium for equity in stable growth period = 8.83% Debt Ratio to use in stable growth period = 3.56% Pre-tax cost of debt in stable growth period = 11.08% Tax Rate to use in stable growth period = 30.00% To compute the reinvestment rate in stable growth, you have two options Do you want to compute reinvestment needs in stable growth based on fundamentals? Yes If yes, enter the return on capital that the firm will have in stable growth 14.69% If no, enter capital expenditure as % of depreciation in stable growth 120% (in percent)Go to R&D Converter Go to Operating lease converter Go to Earnings Normalizer back and choose to normalize earnings. rating estimator worksheet that is attachedNormalizing Earnings Approach used to normalize earnings = 3 If historical average, Average Earnings before interest and taxes = 3500 If historical average ROC, Historical average pre-tax return on capital = 22% If sector margin Pre-tax Operating Margin for Sector = 14.72% ! Look at industry average Normalized Earnings before interest and taxes = $478.00 Worksheet for normalization (Last 5 years of data) -5 -4 -3 -2 -1 Total Revenues 2032 2376 2779 3155 3248 13590 EBIT 186 454 529 448 383 2000 Operating Margin 9.15% 19.11% 19.04% 14.20% 11.79% 14.72%R & D Converter This spreadsheet converts R&D expenses from operating to capital expenses. It makes the appropriate adjustments to operating income, net income, the book value of assets and the book value of equity. Inputs Over how many years do you want to amortize R&D expenses 10 ! If in doubt, use the lookup table below The maximum allowed is ten years Enter R& D expenses for past years: the number of years that you will need to enter will be determined by the amortization period Do not input numbers in the first column (Year). It will get automatically updated based on the input above. Year R& D Expenses -1 1895.00 ! Year -1 is the most recent financial year -2 1924.00 ! Year -2 is the year before the most recent financial year -3 1633.00 -4 1300.00 -5 1704.00 -6 1661.00 -7 1846.00 -8 1417.00 -9 827.00 -10 754.00 Output Year R&D Expense Unamortized portion Amortization this year -1 1895.00 1.00 1895.00 $189.50 -2 1924.00 0.90 1731.60 $192.40 -3 1633.00 0.80 1306.40 $163.30 -4 1300.00 0.70 910.00 $130.00 -5 1704.00 0.60 1022.40 $170.40 -6 1661.00 0.50 830.50 $166.10 -7 1846.00 0.40 738.40 $184.60 -8 1417.00 0.30 425.10 $141.70 -9 827.00 0.20 165.40 $82.70 -10 754.00 0.10 75.40 $75.40 Value of Research Asset = $9,100.20 $1,496.10 Amortization of asset for current year = $1,496.10 Adjustment to Operating Income = $398.90 ! A positive number indicates an increase in operating income (add to reported Tax Effect of R&D Expensing $120 Look Up Table for Amortization Periods Industry Name Amortization Period Advertising 2 Aerospace/Defense 10 Non-technological Service 2 years Air Transport 10 Retail, Tech Service 3 years Aluminum 5 Light Manufacturing 5 years Apparel 3 Heavy Manufacturing 10 years Auto & Truck 10 Research, with Patenting 10 years Auto Parts (OEM) 5 Long Gestation Period 10 years Auto Parts (Replacement) 5Bank 2 Bank (Canadian) 2 Bank (Foreign) 2 Bank (Midwest) 2 Beverage (Alcoholic) 3 Beverage (Soft Drink) 3 Building Materials 5 Cable TV 10 Canadian Energy 10 Cement & Aggregates 10 Chemical (Basic) 10 Chemical (Diversified) 10 Chemical (Specialty) 10 Coal/Alternate Energy 5 Computer & Peripherals 5 Computer Software & Svcs 3 Copper 5 Diversified Co. 5 Drug 10 Drugstore 3 Educational Services 3 Electric Util. (Central) 10 Electric Utility (East) 10 Electric Utility (West) 10 Electrical Equipment 10 Electronics 5 Entertainment 3 Environmental 5 Financial Services 2 Food Processing 3 Food Wholesalers 3 Foreign Electron/Entertn 5 Foreign Telecom. 10 Furn./Home Furnishings 3 Gold/Silver Mining 5 Grocery 2 Healthcare Info Systems 3 Home Appliance 5 Homebuilding 5 Hotel/Gaming 3 Household Products 3 Industrial Services 3 Insurance (Diversified) 3 Insurance (Life) 3 Insurance (Prop/Casualty) 3 Internet 3 Investment Co. (Domestic) 3 Investment Co. (Foreign) 3 Investment Co. (Income) 3 Machinery 10 Manuf. Housing/Rec Veh 5 Maritime 10Medical Services 3 Medical Supplies 5 Metal Fabricating 10 Metals & Mining (Div.) 5 Natural Gas (Distrib.) 10 Natural Gas (Diversified) 10 Newspaper 3 Office Equip & Supplies 5 Oilfield Services/Equip. 5 Packaging & Container 5 Paper & Forest Products 10 Petroleum (Integrated) 5 Petroleum (Producing) 5 Precision Instrument 5 Publishing 3 R.E.I.T. 3 Railroad 5 Recreation 5 Restaurant 2 Retail (Special Lines) 2 Retail Building Supply 2 Retail Store 2 Securities Brokerage 2 Semiconductor 5 Semiconductor Cap Equip 5 Shoe 3 Steel (General) 5 Steel (Integrated) 5 Telecom. Equipment 10 Telecom. Services 5 Textile 5 Thrift 2 Tire & Rubber 5 Tobacco 5 Toiletries/Cosmetics 3 Trucking/Transp. Leasing 5 Utility (Foreign) 10 Water Utility 10appropriate adjustments to operating income, net If in doubt, use the lookup table below The maximum allowed is ten years determined by the amortization period increase in operating income (add to reported EBIT)Operating Lease Converter Inputs Operating lease expense in current year = $100.00 Operating Lease Commitments (From footnote to financials) Year Commitment ! Year 1 is next year, …. 1 205.00 $ 2 167.00 $ 3 120.00 $ 4 86.00 $ 5 61.00 $ 6 and beyond -$ Output Pre-tax Cost of Debt = 11.08% ! If you do not have a cost of debt, use the ratings estimator From the current financial statements, enter the following Reported Operating Income (EBIT) = $382.60 ! This is the EBIT reported in the current income statement Reported Debt = $284.20 ! This is the interest-bearing debt reported on the balance sheet Number of years embedded in yr 6 estimate = 0 ! I use the average lease expense over the first five years to estimate the number of years of expenses in yr 6 Converting Operating Leases into debt Year Commitment Present Value 1 205.00 $ $184.55 2 167.00 $ $135.35 3 120.00 $ $87.55 4 86.00 $ $56.49 5 61.00 $ $36.07 6 and beyond -$ $0.00 ! Commitment beyond year 6 converted into an annuity for ten years Debt Value of leases = 500.01 $ Restated Financials Depreciation on Operating Lease Asset = $100.00 ! I use straight line depreciation Adjustment to Operating Earnings = $55.40 ! PV of operating leases * Pre-tax cost of debt Adjustment to Total Debt outstanding = 500.01 $ current income statement reported on the balance sheet over the first five years of expenses in yr 6 annuity for ten years I use straight line depreciation PV of operating leases * Pre-tax cost of debtTwo-Stage FCFF Discount Model Normalized EBIT (before adjustments) $478.00 Adjusted EBIT = $478.00 Adjusted Interest Expense = $91.90 Adjusted Capital Spending $752.90 Adjusted Depreciation & Amort'n = $438.10 Tax Rate on Income = 30.00% Current Revenues = $3,248.00 Current Non-cash Working Capital = $179.90 Chg. Working Capital = $5.10 Adjusted Book Value of Debt = $798.80 Adjusted Book Value of Equity = $1,478.90 Length of High Growth Period = 10 Forever Growth Rate = 14.04% 5.00% Debt Ratio used in Cost of Capital Calculation= 3.56% 3.56% Beta used for stock = 0.66 0.80 Riskfree rate = 5.00% 5.00% Risk Premium = 13.69% 8.83% Cost of Debt = 11.08% 11.08% Tax Rate = 30.00% 30.00% Return on Capital = 14.69% 14.69% Reinvestment Rate = 95.61% 34.04%Input Summary Page 13Two-Stage FCFF Discount Model Output from the program Cost of Equity = 14.04% Equity/(Debt+Equity ) = 96.44% After-tax Cost of debt = 7.76% Debt/(Debt +Equity) = 3.56% Cost of Capital = 13.81% Intermediate Output Expected Growth Rate 14.04% Working Capital as percent of revenues = 3.56% (in percent) The FCFF for the high growth phase are shown below (upto 10 years) Current 1 2 3 4 5 6 7 8 Expected Growth Rate 14.04% 14.04% 14.04% 14.04% 14.04% 14.04% 14.04% 14.04% 14.04% Cumulated Growth 114.04% 130.06% 148.33% 169.16% 192.92% 220.01% 250.91% 286.15% 326.34% Reinvestment Rate 95.61% 95.61% 95.61% 95.61% 95.61% 95.61% 95.61% 95.61% 95.61% EBIT * (1 -tax rate) $334.60 $381.59 $435.19 $496.31 $566.01 $645.51 $736.16 $839.56 $957.47 $1,091.94 -(CapEx-Depreciation)$314.80 $348.58 $397.53 $453.37 $517.04 $589.66 $672.47 $766.92 $874.63 $997.47 -Chg. Working Capital $5.10 $16.25 $18.53 $21.13 $24.10 $27.48 $31.34 $35.74 $40.76 $46.49 Free Cashflow to Firm $14.70 $16.77 $19.12 $21.81 $24.87 $28.37 $32.35 $36.89 $42.07 $47.98 Cost of Capital 13.81% 13.81% 13.81% 13.81% 13.81% 13.81% 13.81% 13.81% 13.81% Cumulated Cost of Capital 113.81% 129.53% 147.42% 167.78% 190.96% 217.33% 247.35% 281.51% 320.39% Present Value $14.73 $14.76 $14.79 $14.82 $14.85 $14.88 $14.92 $14.95 $14.98 Growth Rate in Stable Phase = 5.00% Reinvestment Rate in Stable Phase = 34.04% FCFF in Stable Phase = $862.52 Cost of Equity in Stable Phase = 12.06% Equity/(Equity + Debt) = 96.44% AT Cost of Debt in Stable Phase = 7.76% Page 14Two-Stage FCFF Discount Model Debt/(Equity + Debt) = 3.56% Cost of Capital in Stable Phase = 11.91% Value at the end of growth phase = $12,481.17 Present Value of FCFF in high growth phase = $148.70 Present Value of Terminal Value of Firm = $3,422.82 Value of operating assets of the firm = $3,571.51 Value of Cash, Marketable Securities & Non-operating assets = $1,758.60 Value of Firm = $5,330.11 Market Value of outstanding debt = $284.20 Market Value of Equity = $5,045.91 Value of Equity in Options = $0.00 Value of Equity in Common Stock = $5,045.91 Market Value of Equity/share = $583.54 Valuation Page 15Two-Stage FCFF Discount Model Page 16Two-Stage FCFF Discount Model Terminal Year $1,307.57 $423.52 $21.53 $862.52 Page 17Valuing Options or Warrants Enter the current stock price = $890.00 Enter the strike price on the option = $2.00 Enter the expiration of the option = 4 Enter the standard deviation in stock prices = 32.00% (volatility) Enter the annualized dividend yield on stock = 0.00% Enter the treasury bond rate = 5.00% Enter the number of warrants (options) outstanding = 5.00 Enter the number of shares outstanding = 8.65 Do not input any numbers below this line VALUING WARRANTS WHEN THERE IS DILUTION Stock Price= 890 # Warrants issued= 5 Strike Price= 2 # Shares outstanding= 9 Adjusted S = 889.0531633 T.Bond rate= 5.00% Adjusted K = 2 Variance= 0.1024 Expiration (in years) = 4 Annualized dividend yield= 0.00% Div. Adj. interest rate= 5.00% d1 = 10.1590779 N (d1) = 1 d2 = 9.519077898 N (d2) = 1 Value per option = $887.42 Value of all options outstanding = $4,437.08Bottom-up Beta Calculator Unlevered beta for sector = 0.68 ! Look up industry averages Output Firm's Current market value D/E ratio = 3.69% ! Reverted back to conventional debt to equity ratio Firm's Current tax rate = 30.00% Bottom-up beta for firm = 0.70debt to equity ratioInputs for synthetic rating estimation Enter the type of firm = 1 (Enter 1 if large manufacturing firm, 2 if smaller or riskier firm, 3 if financial service firm) Enter current Earnings before interest and taxes (EBIT) = $382.60 (Add back only long term interest expense for Enter current interest expenses = $91.90 (Use only long term interest expense for financial Enter current long term government bond rate = 5.00% Output Interest coverage ratio = 4.16 Estimated Bond Rating = AEstiimate Default Spread = 1.25% Estimated Cost of Debt = 6.25% For large manufacturing firms For financial service firms If interest coverage ratio is If long term interest coverage ratio is > ≤ to Rating is Spread is greater than ≤ to -100000 0.199999 D 10.00% -100000 0.049999 0.2 0.649999 C 7.50% 0.05 0.099999 0.65 0.799999 CC 6.00% 0.1 0.199999 0.8 1.249999 CCC 5.00% 0.2 0.299999 1.25 1.499999 B-4.25% 0.3 0.399999 1.5 1.749999 B 3.25% 0.4 0.499999 1.75 1.999999 B+ 2.50% 0.5 0.599999 2 2.499999 BB 2.00% 0.6 0.799999 2.5 2.999999 BBB 1.50% 0.8 0.999999 3 4.249999 A-1.25% 1 1.49999 4.25 5.499999 A 1.00% 1.5 1.99999 5.5 6.499999 A+ 0.80% 2 2.49999 6.5 8.499999 AA 0.50% 2.5 2.99999 8.50 100000 AAA 0.20% 3 100000 For smaller and riskier firms If interest coverage ratio is greater than ≤ to Rating is Spread is -100000 0.499999 D 10.00% 0.5 0.799999 C 7.50% 0.8 1.249999 CC 6.00% 1.25 1.499999 CCC 5.00% 1.5 1.999999 B-4.25% 2 2.499999 B 3.25% 2.5 2.999999 B+ 2.50% 3 3.499999 BB 2.00% 3.5 4.499999 BBB 1.50% 4.5 5.999999 A-1.25% 6 7.499999 A 1.00% 7.5 9.499999 A+ 0.80% 9.5 12.499999 AA 0.50% 12.5 100000 AAA 0.20%or riskier firm, 3 if financial service firm) Add back only long term interest expense for financial firms) Use only long term interest expense for financial firms) interest coverage ratio is Rating is Spread is Operating Income Decline D 10.00% -50.00% C 7.50% -40.00% CC 6.00% -40.00% CCC 5.00% -40.00% B-4.25% -25.00% B 3.25% -20.00% B+ 2.50% -20.00% BB 2.00% -20.00% BBB 1.50% -20.00% A-1.25% -17.50% A 1.00% -15.00% A+ 0.80% -10.00% AA 0.50% -5.00% AAA 0.20% 0.00%Industry Name Number of FirmsCap Ex/DepreciationROC Reinvestment RateUnlevered BetaMV Debt to Capital Ratio Advertising 25 84.97% ##### -7.66% 1.10 10.51% Aerospace/Defense 48 102.26% ##### 0.48% 0.78 29.88% Air Transport 44 184.45% ##### 48.85% 0.96 33.41% Aluminum 9 120.93% ##### 24.39% 0.83 24.65% Apparel 61 102.94% ##### 11.35% 0.87 17.21% Auto & Truck 20 103.35% ##### 22.84% 0.61 51.42% Auto Parts (OEM) 36 159.03% ##### 59.80% 0.75 26.58% Auto Parts (Replacement) 36 150.40% ##### 45.18% 0.71 21.56% Bank 162 NA NA NA 0.75 21.08% Bank (Canadian) 8 NA NA NA 0.81 25.38% Bank (Foreign) 2 NA NA NA 0.92 19.80% Bank (Midwest) 34 NA NA NA 0.82 15.58% Beverage (Alcoholic) 22 159.20% 9.82% 37.84% 0.70 15.73% Beverage (Soft Drink) 13 133.61% ##### 15.11% 0.93 7.70% Building Materials 57 158.84% ##### 38.98% 0.80 21.73% Cable TV 22 99.59% ##### -0.60% 0.71 39.28% Canadian Energy 15 198.37% ##### 73.39% 0.67 38.36% Cement & Aggregates 15 167.74% ##### 33.26% 0.84 8.89% Chemical (Basic) 18 159.05% ##### 20.47% 0.82 20.23% Chemical (Diversified) 35 129.68% ##### 26.12% 0.79 22.44% Chemical (Specialty) 89 141.87% ##### 34.67% 0.79 20.66% Coal/Alternate Energy 6 236.99% 8.53% 62.37% 0.54 44.02% Computer & Peripherals 166 135.95% ##### 46.71% 1.29 5.05% Computer Software & Svcs 355 96.47% ##### 11.46% 1.38 2.56% Copper 7 185.12% ##### 41.43% 0.57 52.45% Diversified Co. 101 119.92% ##### 20.49% 0.85 17.82% Drug 229 126.73% ##### 21.74% 1.18 2.83% Drugstore 12 196.41% ##### 70.88% 0.95 6.12% Educational Services 21 154.03% ##### 39.79% 1.11 4.00% Electric Util. (Central) 36 94.94% 9.63% -0.22% 0.45 41.87% Electric Utility (East) 38 92.44% ##### -3.36% 0.48 37.06% Electric Utility (West) 19 103.83% ##### 3.31% 0.44 42.22% Electrical Equipment 104 130.44% ##### 25.15% 1.08 4.85% Electronics 152 145.67% ##### 51.06% 1.06 13.24% Entertainment 70 80.67% 5.91% -6.72% 0.90 18.95% Environmental 61 113.29% ##### 15.36% 0.84 17.49% Financial Services 101 91.40% 5.87% 89.34% 0.93 33.23% Food Processing 93 112.82% ##### 10.77% 0.71 14.52% Food Wholesalers 18 172.17% ##### 48.97% 0.69 21.98% Foreign Electron/Entertn 13 125.30% 8.59% 44.59% 0.72 27.24% Foreign Telecom. 19 85.90% ##### -1.17% 0.99 15.10% Furn./Home Furnishings 36 118.11% ##### 29.89% 0.92 13.75% Gold/Silver Mining 34 180.81% 7.20% 92.19% 0.56 14.50% Grocery 29 169.19% ##### 45.17% 0.71 16.01% Healthcare Info Systems 32 105.20% ##### 20.90% 1.18 1.39% Home Appliance 15 118.22% ##### 17.55% 0.77 24.76% Homebuilding 66 230.29% 7.53% 78.36% 0.71 37.47% Hotel/Gaming 56 377.52% ##### 133.02% 0.79 35.48% Household Products 33 147.67% ##### 25.03% 0.90 9.02% Industrial Services 157 90.71% ##### 16.14% 0.97 16.83% Insurance (Diversified) 57 422.52% 1.78% 160.39% 0.86 11.13%Insurance (Life) 32 NA NA NA 0.92 8.02% Insurance (Prop/Casualty) 66 NA NA NA 0.86 6.35% Internet 28 223.08% 4.63% 310.56% 1.81 0.42% Investment Co. (Domestic) 18 NA NA NA 0.82 1.81% Investment Co. (Foreign) 24 NA NA NA NA 2.53% Investment Co. (Income) 13 NA NA NA NA 0.00% Machinery 140 141.31% ##### 38.10% 0.79 24.96% Manuf. Housing/Rec Veh 21 211.54% ##### 74.37% 0.83 13.19% Maritime 22 209.36% ##### 63.46% 0.48 51.32% Medical Services 191 114.44% 9.22% 23.32% 0.98 24.50% Medical Supplies 210 177.98% ##### 44.91% 1.05 5.33% Metal Fabricating 42 145.92% ##### 25.50% 0.88 16.56% Metals & Mining (Div.) 29 252.18% 6.27% 144.76% 0.66 32.26% Natural Gas (Distrib.) 54 216.24% ##### 61.35% 0.46 38.24% Natural Gas (Diversified) 41 224.87% ##### 72.48% 0.72 32.25% Newspaper 20 87.58% ##### -4.27% 0.81 18.81% Office Equip & Supplies 31 100.03% ##### 37.27% 0.91 20.29% Oilfield Services/Equip. 93 237.89% ##### 67.65% 1.06 14.60% Packaging & Container 33 124.15% ##### 21.20% 0.67 35.18% Paper & Forest Products 63 112.99% ##### 19.92% 0.71 37.33% Petroleum (Integrated) 41 164.11% ##### 38.50% 0.82 12.72% Petroleum (Producing) 104 236.40% ##### 98.56% 0.70 33.84% Precision Instrument 101 159.61% ##### 49.60% 1.04 9.46% Publishing 57 78.29% ##### -1.12% 0.89 13.86% R.E.I.T. 87 938.39% ##### 144.67% 0.72 11.71% Railroad 15 221.70% ##### 60.54% 0.82 33.11% Recreation 90 212.91% ##### 56.34% 0.90 12.57% Restaurant 90 200.93% ##### 50.37% 0.89 15.97% Retail (Special Lines) 172 159.08% ##### 55.24% 1.07 10.25% Retail Building Supply 14 371.10% ##### 88.62% 1.06 3.03% Retail Store 49 159.44% ##### 40.86% 1.03 16.84% Securities Brokerage 35 132.45% ##### 59.52% 0.63 62.16% Semiconductor 69 158.96% ##### 42.93% 1.51 3.03% Semiconductor Cap Equip 8 172.18% ##### 57.16% 1.57 3.25% Shoe 26 202.17% ##### 43.96% 0.86 20.39% Steel (General) 31 195.13% ##### 58.38% 0.68 33.12% Steel (Integrated) 20 144.10% ##### 17.78% 0.68 37.95% Telecom. Equipment 100 217.50% ##### 79.29% 1.37 4.47% Telecom. Services 131 147.92% ##### 39.04% 1.13 13.62% Textile 27 155.36% ##### 43.28% 0.66 40.96% Thrift 120 357.89% NA NA 0.47 59.11% Tire & Rubber 10 161.87% ##### 43.23% 0.87 16.09% Tobacco 16 98.85% ##### 3.71% 0.72 16.46% Toiletries/Cosmetics 25 187.89% ##### 39.28% 1.00 5.97% Trucking/Transp. Leasing 51 205.93% ##### 109.39% 0.60 50.04% Utility (Foreign) 2 183.70% 9.74% 74.41% 0.83 31.50% Water Utility 17 242.57% 9.74% 49.64% 0.42 41.37%Non-Cash Working Capital/Sales Pre-tax Operating Margin Std Deviation in Equity -2.57% 14.76% 40.76% 18.95% 23.68% 41.59% 3.51% 14.01% 47.25% 18.82% 14.83% 32.19% 26.48% 11.04% 48.52% 41.80% 15.88% 33.71% 11.77% 11.11% 36.08% 21.49% 11.31% 36.33% NA NA 25.95% NA NA 24.87% NA NA 33.26% NA NA 23.10% 17.61% 18.05% 29.77% 5.54% 21.04% 37.17% 12.87% 9.57% 37.64% -1.14% 33.63% 45.99% 3.07% 26.09% 27.50% 16.20% 22.82% 34.07% 17.57% 25.99% 33.93% 19.92% 18.05% 30.62% 20.79% 16.79% 38.83% 9.97% 31.90% 41.48% 19.79% 13.62% 62.99% 18.00% 23.22% 62.08% 10.86% 25.39% 31.17% 18.71% 12.49% 37.59% 21.27% 27.29% 64.84% 13.37% 6.94% 44.50% 12.07% 16.79% 56.30% 7.42% 26.23% 16.77% 8.89% 29.57% 19.20% 8.44% 28.41% 17.89% 20.25% 15.02% 48.48% 24.26% 11.30% 53.56% 17.43% 20.33% 37.64% 15.35% 16.06% 57.37% 156.89% 27.47% 39.76% 9.30% 11.39% 33.84% 3.38% 4.51% 31.97% 23.37% 11.31% 27.63% 15.75% 33.19% 39.42% 20.93% 12.18% 34.77% 8.07% 26.50% 56.14% 4.11% 6.10% 34.80% 22.06% 22.04% 70.20% 22.74% 11.01% 38.18% 32.38% 8.97% 43.98% 0.53% 20.82% 49.01% 15.39% 18.76% 35.37% 14.85% 10.78% 45.01% NA 20.16% 30.73%NA NA 28.87% NA NA 28.60% 21.09% 4.06% 72.04% NA NA 24.07% NA NA 31.76% NA NA 12.23% 24.39% 13.13% 38.42% 20.48% 8.44% 38.66% 10.85% 16.02% 36.05% 8.36% 10.39% 58.39% 18.67% 13.86% 56.18% 22.05% 14.30% 37.75% 19.33% 12.73% 56.00% 6.30% 20.58% 20.38% 3.88% 15.42% 37.09% 3.90% 21.71% 24.83% 27.07% 12.99% 37.14% 20.72% 22.66% 51.59% 12.92% 15.78% 34.36% 15.45% 12.57% 31.90% 6.43% 16.59% 27.87% 3.35% 40.34% 49.98% 26.56% 14.73% 49.15% 16.37% 18.32% 50.96% NA NA 21.88% 1.67% 26.27% 35.91% 18.71% 17.17% 50.57% 0.28% 16.46% 41.39% 14.01% 8.24% 58.34% 12.30% 8.72% 43.30% 17.56% 8.05% 45.50% NA 59.16% 42.19% 17.09% 26.53% 63.35% 22.97% 23.38% 58.26% 26.56% 9.75% 42.88% 18.16% 11.20% 36.76% 18.31% 12.77% 37.58% 24.25% 14.78% 63.32% 6.75% 33.05% 51.66% 26.65% 12.23% 34.26% NA NA 28.78% 17.14% 12.43% 26.72% 15.77% 17.49% 36.91% 23.87% 18.24% 44.87% 14.21% 16.84% 35.74% 8.11% 46.07% 25.69% 3.58% 42.12% 22.56%