Income Statement Ratio Formulas by ldp16969

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Income Statement Ratio Formulas document sample

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									                                                               Questions or problems?
                                                               Paul Cretien
                                                               Cretien619@aol.com

Suggestions for Excel worksheets

At the bottom of the worksheets are eleven tabs -- Suggestions for Use, Cash Budget,
Balance Sheet, Income Statement, Ratio Analysis, Statement of Cash Flows,
Statement of Sources and Uses of Funds, Balance Sheet History, Income
Statement History, Leverage and Du Pont. Click on a tab to move to that worksheet.

Cash Budget

 1 Enter monthly sales forecasts and other data necessary to calculate cash
   inflows on rows 6 through 16. Formulas along row 18 sum the numbers that
   are cash flows. Some of the formulas in the January, 2009, column can
   be copied across the worksheet from January to December while some are
   specific to certain months.

 2 Enter data related to cash outflows on rows 20 through 38. Formulas along
   row 40 sum the numbers that are cash outflows.

 3 Formulas on row 42 calculate net cash flow for each month.

 4 Formulas on rows 43 through 55 calculate the end-of-month balance of the
   short-term loan (drawing on the line-of-credit) or short-term securities.

 5 On rows 50 through 55, IF formulas determine the new dollar balance of
   either the short-term loan or short-term securities at the end of each month.
   Assuming that the variance of the unadjusted cash balance from the
   minimum cash balance will always be either positive or negative, there are
   six possible results. There will be only one result with a positive balance while the
   other five will have zero balances. These IF formulas are summarized as follows:

    Row 50      If there is a positive variance, a previous loan, and the variance exceeds the
                loan, then repay the short-term loan and buy securities with the excess funds.
                This cell will show the end-of-month investment in securities.

    Row 51      If there is a positive variance, a previous loan, and the variance is less than
                the loan, then reduce the loan by the amount of the variance. This cell shows
                the end-of-month line-of-credit borrowing.

    Row 52      If there is a positive variance and previous securities, then increase the
                the investment in securities by the amount of the variance. This cell shows
                the end-of-month investment in securities.

    Row 53      If there is a negative variance and a previous loan, then increase the
                short-term loan by the amount of the variance. This cell shows the
                end-of-month line-of-credit borrowing.

    Row 54      If there is a negative variance and previous securities, and the variance is larger than
                the securities, then sell all of the securities and obtain sufficient short-term debt
                to cover the deficit. This cell shows the end-of-month line-of-credit borrowing.

    Row 55      If there is a negative variance and previous securities, and the variance is less than
                the investment in securities, then reduce securities in the amount of the variance.
                This cell shows the end-of-month investment in securities.
   The new month-end total securities will be the sum of values on rows 50, 52, or 55.
   The new month-end total for the short-term loan will be the sum of values on rows 51, 53, or 54.
   One of the six cells will have a positive balance, while the other five will be zero.

      Charts on rows 66 - 94 are automatically updated with monthly cash flows and
      short-term borrowing or short-term securities held at the end of each month.

 6 Year-end or annual total figures from the cash budget provide data needed
   on the forecast balance sheet and income statement.

      Figures from the balance sheet and income statement have been linked
      to formulas on the Ratio Analysis worksheet. When the two financial
      pro-forma statements have been completed, the Ratio Analysis results
      will be ready to view.

Balance Sheet

Enter data for assets, liabilities and equity accounts in column D. Each balance sheet
account will be shown as a percent of total assets in column C.

Income Statement

Enter data for sales, cost of goods sold, administrative expenses, interest expense,
and interest income in all non-formula cells in column D. Each income statement item
will be computed as a percent of sales in column C. Enter numbers for total dividends,
net to retained earnings, dividend per share, and earnings per share.

Ratio Analysis

Numbers from the balance sheet and income statement are automatically copied to the
ratio analysis formulas in column C. For example, cell C26 contains the formula for
copying total current assets from the balance sheet. As balance sheet and income
statement data are completed, the ratio analysis will show the financial ratios for the
forecast year.

If there are ratios that you would like to include that are not shown on the ratio analysis
worksheet, it is OK to add to the list and create new formulas to accomplish the changes.

Statement of Cash Flows

Enter data from the income statement and balance sheet. Items that reduce cash, such as
positive changes in assets, negative changes in liabilities, debt principal payments,
dividends paid and capital expenditures, should be shown as negative amounts.
Positive figures include profit and depreciation (as an adjustment for a non-cash expense).

Statement of Sources & Uses of Funds

Enter balance sheet changes from 2009 to 2010. Total sources of funds should equal total
uses of funds. The statement shows net short-term and net long-term sources and uses.
A source of funds is an increase in a liability or equity account, or a decrease in an
asset. A use of funds is an increase in an asset or a decrease in a liability or equity
account.

Tax

The tax figure specified in the case study will be the correct amount of tax. The tax
is used as a "plug" number for the budget forecast. This makes it possible for the financial
statements to be completed with a single calculation instead of by "trial & error" methods.
The GM Company
                                          2009              2009              2009              2009              2010
Cash Budget                                Sep               Oct               Nov               Dec               Jan
                                     ----------------- ---------------- -----------------------------------------------------
Sales                                     766,440           652,894           780,634           468,380           513,515
Cash sales                                  38,322           32,645            39,032            23,419            25,676
Bank credit card sales                    229,932           195,868           234,190           140,514           154,054
Charge sales                              498,186           424,381           507,412           304,447           333,785
Outstanding receivables                   785,471           710,374           744,324           578,816           486,836
Collected in one month                    146,688           149,456           127,314           152,224            91,334
Collected in two months                   216,988           205,363           209,238           178,240           228,335
Collected in three months                 149,917           129,159           122,240           124,547            93,364
Uncollected store credit                    17,990           15,499            14,669            14,946            12,731
Interest on securities                             0                 0                 0              952            1,186
Funds from long-term loan                                                                                         580,000
                                     ------------------------------------------------------------------------------------------
Total cash inflows                         781,847           712,491           732,014           619,895        1,173,950
                                      ========= ========= ========= ========= =========
Ending inventory                       1,290,763         1,165,294            991,736        1,073,170         1,145,870
Inventory purchases                       530,831           318,499           357,273           399,933           429,973
Accounts payable                          780,095           567,763           606,537           649,197           679,237
Payment for inventory                     443,968           530,831           318,499           357,273           399,933
Sales commissions                           45,986           39,174            46,838            28,103            30,811
Principal on long-term debt                  5,466             5,509             5,553             5,598             6,423
Salary expense                              40,633           40,633            40,633            40,633            43,750
Maintenance & other                         15,308           15,308            15,308            15,308            12,917
Lease payments                              19,647           19,647            19,647            19,647            27,083
Advertising expense                         13,500           13,500            13,500            13,500            20,063
Research & development                      10,667           10,667            10,667            10,667            13,508
Purchase of fixed assets                                                                                          725,000
Bank card terminal fee                          852               852               852               852               276
Bank card fee on sales                       6,898             5,876             7,026             4,215             4,622
Bad debt, bank credit cards                  5,535             4,769             4,513             4,599             3,917
Tax payments                                12,336                                               12,336
Interest on term loans                      15,960           15,917            15,873            15,829            20,409
Interest on short-term credit line              619                72                23                  0                 0
Dividend payments                           35,000                                               35,000
                                     ------------------------------------------------------------------------------------------
Total cash outflows                       672,375           702,754           498,932           563,559        1,308,711
                                     ========= ========= ========= ========= =========
Net cash flow                             109,472              9,737          233,083            56,336          (134,761)
Plus beginning cash balance                 50,000           50,000            50,000            50,000            50,000
Unadjusted cash balance                   159,472            59,737           283,083           106,336           (84,761)
Less the target cash balance                50,000           50,000            50,000            50,000            50,000
Variance from target balance              109,472              9,737          233,083            56,336          (134,761)
Short-term bank loan                        14,419             4,682                   0                 0                 0
Short-term securities                              0                 0        228,400           284,736           149,975

                 1                              0                  0         228,400                 0                    0
                 2                         14,419              4,682               0                 0                    0
                 3                              0                  0               0           284,736                    0
               4                 0        0              0             0         0
               5                 0        0              0             0         0
               6                 0        0              0             0   149,975

Cash balance, end of month   50,000   50,000       50,000       50,000      50,000

                                                                           Jan
                                               Short-term Borrowing              0
                                               Short-term Securities       149,975

                                                                            Jan
                                               Net cash flow               -134,761
     2010              2010              2010              2010              2010              2010              2010              2010
      Feb               Mar               Apr               May               Jun                Jul              Aug               Sep
----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------




------------------------------------------------------------------------------------------------------------------------------------------------
               0                 0                 0                 0                 0                 0                 0                 0
 ========= ========= ========= ========= ========= ========= ========= =========




------------------------------------------------------------------------------------------------------------------------------------------------
              0                 0                 0                 0                 0                 0                 0                 0
========= ========= ========= ========= ========= ========= ========= =========
              0                 0                 0                 0                 0                 0                 0                 0
      50,000           199,975           199,975           199,975           199,975           199,975           199,975           199,975
      50,000           199,975           199,975           199,975           199,975           199,975           199,975           199,975
      50,000            50,000            50,000            50,000            50,000            50,000            50,000            50,000
              0        149,975           149,975           149,975           149,975           149,975           149,975           149,975
              0                 0                 0                 0                 0                 0                 0                 0
              0                 0                 0                 0                 0                 0                 0                 0

              0                 0                 0                 0                 0                 0                0                 0
              0                 0                 0                 0                 0                 0                0                 0
              0                 0                 0                 0                 0                 0                0                 0
      0             0             0          0          0           0           0           0
      0             0             0          0          0           0           0           0
      0             0             0          0          0           0           0           0

199,975       199,975       199,975    199,975    199,975     199,975   199,975       199,975

Feb           Mar           Apr        May        Jun         Jul       Aug           Sep
      0             0             0          0          0           0           0           0
      0             0             0          0          0           0           0           0

Feb           Mar           Apr        May        Jun         Jul       Aug           Sep
      0               0           0           0         0           0           0           0




                                       Net Cash Flow

          0
                Jan       Feb   Mar   Apr    May Jun    Jul   Aug Sep     Oct       Nov Dec
  -20,000

  -40,000

  -60,000

  -80,000

 -100,000

 -120,000

 -140,000

 -160,000
      2010               2010               2010                 2010                2011              2011
       Oct                Nov                Dec                Totals                Jan               Feb
 ----------------   ----------------- -------------------   -----------------   ----------------- -----------------




------------------ ------------------ ------------------
                 0                  0                  0
 ========= ========= =========




------------------ ------------------ ------------------
                0                  0                  0
========= ========= =========
                0                  0                  0
       199,975            199,975            199,975
       199,975            199,975            199,975
        50,000             50,000             50,000
       149,975            149,975            149,975
                0                  0                  0
                0                  0                  0

               0                  0                  0
               0                  0                  0
               0                  0                  0
            0             0           0
            0             0           0
            0             0           0

      199,975      199,975      199,975

      Oct          Nov          Dec
            0             0           0
            0             0           0

      Oct          Nov          Dec
            0             0           0




                                 Short-term Debt and Short-term Securities

                160,000
Dec
                140,000

                120,000

                100,000

                 80,000

                 60,000

                 40,000

                 20,000

                      0
                              Jan Feb Mar    Apr May Jun      Jul   Aug Sep Oct       Nov Dec

                                            Short-term Debt   Short-term Securities
Dec
The GM Company

               Balance Sheet
                                                         Percent of             Dec. 31            Percent of             Dec. 31          Sources & Uses of Funds
Assets                                                       Total                2010                 Total                2009               Source                 Use
-------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Cash                                                          100.00%               199,975                1.32%                50,000                      0           149,975
Short-term securities                                            0.00%                       0             7.53%              284,736              284,736                       0
Accounts receivable                                              0.00%                       0            15.31%              578,816              578,816                       0
Inventory                                                        0.00%                       0            28.39%           1,073,170            1,073,170                        0
                                                      -------------------- -------------------- -------------------- --------------------
Total current assets                                          100.00%               199,975               52.57%           1,986,722

Gross fixed assets                                                                                                        4,576,678                4,576,678                    0
Accumulated depreciation                                                                                                  2,783,904                        0            2,783,904
Net fixed assets                                                0.00%                                    47.43%           1,792,774
                                                     -------------------- -------------------- -------------------- --------------------
Total assets                                                 100.00%               199,975             100.00%            3,779,497
                                                     ========== ========== ========== ==========

                                                         Percent of             Dec. 31            Percent of             Dec. 31
Liabilities and Equity Capital                               Total                2010                 Total                2009
-------------------------------------------------------------------------- -------------------- -------------------- --------------------
Notes payable, short-term loan                                   0.00%                       0             0.00%                       0                       0                 0
Current portion of long-term debt                                0.00%                                    17.18%                70,756                         0            70,756
Accounts payable                                                 0.00%                       0            17.18%              649,197                          0           649,197
Accrued expenses                                                 0.00%                                     2.07%                78,221                         0            78,221
                                                                           --------------------                      --------------------
Total current liabilities                                        0.00%                       0            21.12%              798,173

Long-term debt                                                  0.00%                                     50.50%            1,908,634                          0        1,908,634

Equity capital
  Common stock, total par value                                0.00%                                       2.65%               100,000                         0           100,000
  Capital surplus                                              0.00%                                       3.97%               150,000                         0           150,000
  Retained earnings                                          100.00%               822,689                21.77%               822,689                         0                 0
                                                                          --------------------                        --------------------
Total equity capital                                         100.00%               822,689                 28.38%           1,072,689
                                                     -------------------- --------------------   -------------------- --------------------
Total liabilities and equity capital                         100.00%               822,689               100.00%            3,779,497
                                                     ========== ==========                       ========== ==========
                                                                                                                                             -------------------- --------------------
                                                                                                                                                   6,513,400            5,890,687
                                                                                                                                             ========== ==========
The GM Company

                                                    Percent of                                Percent of
           Income Statement                            Sales                 2010                Sales                 2009
                                                -
------------------------------------------------- ------------------- -------------------- -------------------- --------------------
Net sales                                             #DIV/0!                                      100.00%             8,516,003
Cost of goods sold                                    #DIV/0!                                        68.02%            5,792,170
                                                                      --------------------                      --------------------
Gross profit                                          #DIV/0!                           0            31.98%            2,723,833

Administrative Expenses

Salary expense                                       #DIV/0!                                          5.73%         487,600
Advertising expense                                  #DIV/0!                                          1.90%         162,000
Sales commissions                                    #DIV/0!                                          6.00%         510,960
Lease expense                                        #DIV/0!                                          2.77%         235,760
Depreciation expense                                 #DIV/0!                                          4.03%         343,251
Maintenance & other expense                          #DIV/0!                                          1.98%         168,400
Research and development                             #DIV/0!                                          1.50%         128,000
Bad debt, charge accounts                            #DIV/0!                                          1.91%         162,538
Bad debt, bank credit cards                          #DIV/0!                                          0.59%           50,012
Bank card terminal fees                              #DIV/0!                                          0.12%           10,219
Bank card fee on sales                               #DIV/0!                                          0.90%           76,644
                                                                     --------------------                  --------------------
Total administrative expense                         #DIV/0!                           0            27.42%        2,335,384

EBIT                                                 #DIV/0!                           0              4.56%             388,449

Interest expense                                     #DIV/0!                                          2.37%          201,784
Interest income                                      #DIV/0!                                          0.04%             3,115
                                                                     --------------------                   --------------------
Profit before-tax                                    #DIV/0!                           0              2.23%          189,780
Income tax tax rate 26 %                             #DIV/0!                           0              0.58%            49,343
                                                                     --------------------                   --------------------
Net income                                           #DIV/0!                           0              1.65%          140,437
                                                                     ==========                             ==========

Dividends                                                                                                               140,000
Net to retained earnings                                                             0                                     437
Dividend per share                                                                $0.00                                   $1.40
Earnings per share                                                                $0.00                                   $1.40
The GM Company
                                                                                                          The GM Company
                                                      Comparison
                Ratio Analysis                          Average*                 2010               2009           2008           2007           2006           2005
                                                                                                               -------------- -------------- -------------- --------------
--------------------------------------------------- --------------------- --------------------- ---------------------
Current ratio                                                     1.90          #DIV/0!                 2.49           2.42           2.32           2.18           2.05
Quick ratio                                                       0.92          #DIV/0!                 1.14           1.10           1.06           0.93           0.91
Sales / accounts receivable                                      12.45          #DIV/0!               14.71           15.27         15.86          16.45          16.74
COGS percent of sales                                         65.00%            #DIV/0!            68.02%          68.70%        67.92%         66.28%         64.31%
COGS / inventory                                                  5.28          #DIV/0!                 5.40           5.28           5.09           4.96           4.73
COGS / accounts payable                                           8.00          #DIV/0!                 8.92           8.65           8.26           7.94           7.51
Sales / net working capital                                       8.86                   0.00           7.17           7.12           7.17           7.91           7.96
EBIT / interest expense                                           6.92          #DIV/0!                 1.93           2.09           2.28           2.46           3.24
Fixed assets / net worth                                          1.46                   0.00           1.67           1.49           1.32           1.32           1.27
Total debt / net worth                                            2.23                   0.00           2.52           2.21           1.95           1.76           1.71
Rate of return on total assets                                  3.72%                 0.00%          3.72%           4.14%         4.32%          4.71%          6.65%
Rate of return on equity capital                              12.00%                  0.00%        13.09%          13.30%        12.75%         12.98%         18.03%
Sales / net fixed assets                                          5.08          #DIV/0!                 4.75           4.83           5.03           4.62           4.65
Sales / total assets                                              2.30                   0.00           2.25           2.24           2.25           2.22           2.18
Depreciation expense / sales                                    1.30%           #DIV/0!              4.03%           3.93%         3.77%          3.81%          3.66%
Salaries / sales                                                5.30%           #DIV/0!              5.73%           5.97%         6.44%          7.20%          7.63%
Net profit as percent of sales                                  1.62%           #DIV/0!              1.65%           1.85%         1.92%          2.12%          3.06%



Current ratio                                                                 #DIV/0!
   Current assets                                           199,975
   Current liabilities                                            0

Quick (acid test) ratio                                                           #DIV/0!
   Current assets                                           199,975
   Inventory                                                      0
   Current liabilities                                            0

Sales / accounts receivable                                                   #DIV/0!
   Sales                                                              0
   Accounts receivable                                                0

Cost of goods sold as % of sales                                              #DIV/0!
  COGS                                                                0
  Sales                                                               0

Cost of goods sold / inventory                                                #DIV/0!
  COGS                                                                0
  Inventory                                                           0

COGS / accounts payable                                                       #DIV/0!
  Cost of goods sold                                                  0
  Accounts payable                                                    0

Sales / net working capital                                                             0.00
   Sales                                                          0
   Net working capital                                      199,975

EBIT / interest expense                                                       #DIV/0!
   EBIT                                                               0
   Interest expense                                                   0

Fixed assets / net worth                                                                0.00
   Fixed assets                                                   0
   Net worth                                                822,689

Total debt / net worth                                                                  0.00
   Total debt                                                     0
   Net worth                                                822,689

Rate of return on total assets                                                       0.00%
   Net income after-tax                                           0
   Total assets                                             822,689

Rate of return on equity capital                                                     0.00%
   Net income after-tax                                           0
   Equity capital                                           822,689

Sales / net fixed assets                                                      #DIV/0!
   Sales                                                              0
   Net fixed assets                                                   0

Sales / total assets                                                                    0.00
   Sales                                                          0
   Total assets                                             822,689

Depreciation expense % of sales                                               #DIV/0!
  Depreciation expense                                                0
  Sales                                                               0

Salary expense % of sales                                                     #DIV/0!
   Salary expense                                                     0
   Sales                                                              0

Net profit as percent of sales                                                #DIV/0!
   Net profit after-tax                                               0
   Sales                                                              0
The GM Company

Statement of Cash Flows                                          2010                2009
                                                            -----------------   -----------------
Operating activities
    Net after-tax profit                                                 0          140,437
    Adjustments to reconcile profit with
    non-cash items
         Depreciation expense                                            0          343,251

    Changes in assets and liabilities
       Accounts receivable                                       578,816             (73,972)
       Inventory                                              1,073,170              (70,664)
       Accounts payable                                         (649,197)             37,322
       Accrued expenses                                          (78,221)            (15,300)
                                                            -----------------   -----------------
    Net cash provided (used) by operating activities             924,568             361,075

Investing activities
    Capital expenditures on new fixed asset                     (725,000)           (540,000)
                                                            -----------------   -----------------
    Net cash provided (used) by investing activities            (725,000)           (540,000)

Financing activities
    Issue of common stock                                                 0                   0
    Change in short-term debt, line-of-credit                             0                   0
    Proceeds from new term loan                                  580,000             378,000
    Principal payments on long-term debt                                  0          (64,323)
    Dividends paid                                                        0         (140,000)
                                                            -----------------   -----------------
    Net cash provided (used) by financing activities             580,000             173,677

Net increase (decrease) in cash and short-term securities      779,568              (5,248)
                                                            =========           =========

Cash and short-term securities, beginning of year               334,736             339,984
                                 end of year
Cash and short-term securities, end of year                     199,975             334,736
                   Change in cash and securities               (134,761)             (5,248)

Note: Rounding causes small differences in sums
The GM Company

Statement of Sources and Uses of Funds

                                                  2010                                    2009

                                            Sources               Uses              Sources               Uses
                                         -----------------   -----------------   -----------------   -----------------
Short-term sources and uses

    Cash                                               0          149,975                      0                   0
    Short-term securities                     284,736                      0             5,248                     0
    Accounts receivable                       578,816                      0                   0           73,972
    Inventory                              1,073,170                       0                   0           70,664
    Notes payable, short-term                          0                   0                   0                   0
    Current portion, long-term debt                    0           70,756              11,213                      0
    Accounts payable                                   0          649,197              37,322                      0
    Accrued expenses                                   0           78,221                      0           15,300
                                         -----------------   -----------------   -----------------   -----------------
                                           1,936,722              948,149              53,783             159,935
                                         =========           =========           =========           =========
    Net short-term sources less uses          988,574                                (106,152)

Long-term sources and uses

    Gross building and equipment           4,576,678                       0                   0          540,000
    Accumulated depreciation                           0       2,783,904              343,251                      0
    Long-term debt, lolng-term portion                 0       1,908,634              302,464                      0
    Retained earnings                                  0                   0                437                    0
    Par value of common stock                          0          150,000                      0                   0
    Capital surplus                                    0          150,000                      0                   0
                                         -----------------   -----------------   -----------------   -----------------
                                           4,576,678           4,992,538              646,152             540,000
                                         =========           =========           =========           =========
    Net long-term sources less uses          (415,860)                                106,152
The GM Company

Balance Sheet
                                                           Dec. 31              Dec. 31              Dec. 31              Dec. 31              Dec. 31              Dec. 31
Assets                                                       2010                 2009                 2008                 2007                 2006                 2005
-------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Cash                                                           199,975                50,000               50,000              50,000               50,000               50,000
Short-term securities                                                   0           284,736              289,984             294,770              204,153              242,640
Accounts receivable                                                     0           578,816              504,844             443,724              390,429              356,818
Inventory                                                               0        1,073,170            1,002,507              939,409              858,380              812,896
                                                      -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total current assets                                           199,975           1,986,722            1,847,335           1,727,903            1,502,963            1,462,354

Gross fixed assets                                                    0        4,576,678            4,036,678           3,536,678            3,261,678            2,911,678
Accumulated depreciation                                              0        2,783,904            2,440,653           2,137,902            1,872,651            1,628,025
Net fixed assets                                                      0        1,792,774            1,596,025           1,398,776            1,389,027            1,283,653
                                                    -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total assets                                                 199,975           3,779,497            3,443,360           3,126,678            2,891,989            2,746,007
                                                    ========== ========== ========== ========== ========== ==========

                                                           Dec. 31              Dec. 31              Dec. 31              Dec. 31              Dec. 31              Dec. 31
Liabilities and Equity Capital                               2010                 2009                 2008                 2007                 2006                 2005
-------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Notes payable, short-term loan                                          0                    0                    0                   0                    0                    0
Current portion of long-term debt                                       0             70,756               59,543              48,967               42,694               37,826
Accounts payable                                                        0           649,197              611,875             578,548              535,751              511,728
Accrued expenses                                                        0             78,221               93,521            118,631              112,291              162,791
                                                      -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total current liabilities                                               0           798,173              764,938             746,146              690,736              712,344

Long-term debt                                                         0        1,908,634            1,606,170            1,320,877            1,151,665            1,020,345

Equity capital
Common stock, total par value                                         0           100,000              100,000             100,000              100,000              100,000
Capital surplus                                                       0           150,000              150,000             150,000              150,000              150,000
Retained earnings                                            822,689              822,689              822,252             809,656              799,589              763,317
                                                    -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total equity capital                                         822,689           1,072,689            1,072,252           1,059,656            1,049,589            1,013,317
                                                    -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total liabilities and equity capital                         822,689           3,779,497            3,443,360           3,126,678            2,891,989            2,746,007
                                                    ========== ========== ========== ========== ========== ==========
The GM Company


Income Statement                                      2010                 2009                 2008                 2007
                                               -------------------- -------------------- -------------------- --------------------
-------------------------------------------------
Net sales                                                       0         8,516,003            7,706,790            7,038,165
Cost of goods sold                                              0         5,792,170            5,294,883            4,780,646
                                               -------------------- -------------------- -------------------- --------------------
Gross profit                                                    0         2,723,833            2,411,907            2,257,518

Administrative Expenses

Salary expense                                                  0           487,600              460,447              453,086
Advertising expense                                             0           162,000              151,300              147,500
Sales commissions                                               0           510,960              462,407              422,290
Lease expense                                                   0           235,760              140,500              140,800
Depreciation expense                                            0           343,251              302,751              265,251
Maintenance & other expense                                     0           168,400              174,890              176,340
Research and development                                        0           128,000                87,025               85,900
Bad debt, charge accounts                                       0           162,538              147,371              134,559
Bad debt, bank credit cards                                     0             50,012               45,345               41,403
Bank card terminal fees                                         0             10,219                9,248                8,446
Bank card fee on sales                                          0             76,644               69,361               63,343
                                               -------------------- -------------------- -------------------- --------------------
Total administrative expense                                    0         2,335,384            2,050,645            1,938,918

EBIT                                                            0           388,449              361,262              318,600

Interest expense                                                0           201,784              172,829              139,868
Interest income                                                 0              3,115                4,263                3,792
                                               -------------------- -------------------- -------------------- --------------------
Profit before-tax                                               0           189,780              192,696              182,524
Income tax tax rate 26 %                                        0             49,343               50,101               47,456
                                               -------------------- -------------------- -------------------- --------------------
Net income                                                      0           140,437              142,595              135,068
                                               ========== ========== ========== ==========

Dividends                                                     0             140,000              130,000              125,000
Net to retained earnings                                      0                 437               12,595               10,068
Dividend per share                                        $0.00               $1.40                $1.30                $1.25
Earnings per share                                        $0.00               $1.40                $1.43                $1.35
       2006                 2005
-------------------- --------------------
      6,421,683            5,973,659
      4,256,356            3,841,407
-------------------- --------------------
      2,165,327            2,132,251



        462,340              455,980
        145,750              142,300
        385,301              358,420
        136,000              135,750
        244,626              218,376
        174,500              176,500
          83,425               80,225
        123,272              115,692
          37,930               35,597
           7,706                7,168
          57,795               53,763
-------------------- --------------------
      1,858,644            1,779,771

        306,683              352,481

        124,627              108,643
           2,096                3,004
-------------------- --------------------
        184,152              246,842
          47,880               64,179
-------------------- --------------------
        136,272              182,663
========== ==========

        100,000              100,000
         36,272               82,663
          $1.00                $1.00
          $1.36                $1.83
The GM Company

Degrees of Operating and Financial Leverage


                                                                                            2010
DOL = (Sales - Variable Operating Costs) / (Sales - Total Operating Costs)           --------------------

                                      Sales                                                           0
                                      Variable costs
                                                         Cost of goods sold                           0
                                                         Sales commissions                            0
                                                         Bad debt expense                             0

                                                         Total variable costs                         0


                                      Operating costs
                                                         Cost of goods sold                           0
                                                         Admin. Expenses                              0

                                                         Total operating costs                        0


                                                         Sales - Variable Costs                       0

                                                         Sales - Total Costs                          0

Degree of Operating Leverage                        0                            0        #DIV/0!
                                            2,000,323                      388,449



                                                                                                      0
                                                                                                      0

Degree of Financial Leverage                        0                            0        #DIV/0!
                                              388,449                      186,665

Degree of Combined Leverage                #DIV/0!                         #DIV/0!        #DIV/0!
                                                  5.15                        2.08
       2009
--------------------

     8,516,003

     5,792,170
       510,960
       212,550

     6,515,680



     5,792,170
     2,335,384

     8,127,554


     2,000,323

        388,449


             5.15



        388,449
        201,784


             2.08


           10.72
The GM Company

DuPont Ratio Analysis


                                                                            2010
                                                                     --------------------

ROA - Net Profit Margin x Total Asset Turnover

                                                 Net profit                           0
                                                 Sales                                0
                                                 Net profit margin        #DIV/0!
                                                 Total assets               199,975
                                                 Asset turnover                0.000
ROA = net profit/total assets                    ROA                          0.00%
   = profit margin x asset turnover
       2009
--------------------



       140,437
     8,516,003
         1.65%
     3,779,497
          2.253
         3.72%

								
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