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					                                                            INPUT


   Input--2007 fiscal year, in $ millions    IBM
     ASSETS Cash                                 9,626
               Mkt. Sec.                           221
               A/R previous year                28,966
               A/Rcurrent year                  29,177
               Inventory previous year           2,976
               Inventory current year            2,916
               Current Assets                   46,311
               Total Assets previous year      121,823

              Total Assets current year        120,927
  LIABILITIES Current Liabilities               44,683
              Total Liabilities                 92,663
      EQUITY Total Equity previous year         28,728
              Total Equity current year         28,264
              Preferred Stock                        0
              Retained Earnings                 64,456
              MV of equity                     156,860
     INCOME Sales                                  98,786
 STATEMENT Cost of Sales                           57,057

     (current) Operating Expenses                  28,213
               Operating Income                    13,516

           Earnings before Tax                     14,489
           Provision for Tax (Tax Expense)          4,071
           Interest Expense                           611
           NI                                      10,418
           Cash from Operations
CASH FLOW STATEMENT                                16,089
                                  Financial Analysis


                                      Balance Sheet
  Firms       ITT   ITT   UTX   UTX       TXT          TXT   HON   HON   RTN   RTN
   year
               $    CS     $    CS          $          CS     $    CS     $    CS
Cash+Mkt
   Sec
 Current
 Assets
  Total
 Assets
 Current
  Liab.
Long-term
  Debt

Total Liab.
Equity
Rating

                                   Income Statement
Firms         ITT   ITT   UTX   UTX      TXT      TXT        HON   HON   RTN   RTN
years
               $    CS     $    CS          $          CS     $    CS     $    CS
Revenues
Cost of
Revenues
Gross
Profit
Ops. Inc.
Net
Income
Rating
                                                    Financial Analysis



                 Liquidity:                       ITT       UTX          TXT   HON   RTN
           Current Ratio (CA/CL)
 Cash Ratio (Cash+Marketable Securities/CL)
 Cash Flow from Operations Ratio (CFO/CL)
                  Ratings

                   Leverage                       ITT       UTX          TXT   HON   RTN
        Total Liabilities / Total Equity
   Total Liabilities (BV) / Equity at Market

Times Interest Earned (EBIT / Interest Expense)
                    Ratings

                  Activity                        ITT       UTX          TXT   HON   RTN
Inventory Turnover (COGS / Avg. Inventory)
Avg. # of Days Inventory (365 / Inv. Turnover)
  Receivables Turnover (Sales / Avg. AR)

Total Assets Turnover (Sales/Avg. Total Assets)
 Length of Operating Cycle [365((1/Inventory
    Turnover) + (1/Receivables Turnover))]
                   Ratings

                  Profit                          ITT       UTX          TXT   HON   RTN
     Gross Margin (Gross Profit / Sales)
        Return on Sales (NI / Sales)
       ROA (NI / Avg. Total Assets)
    ROE (NI / Avg. Stockholders’ Equity)
                 Ratings
                                             Financial Analysis



  ROE = Profit x Activity x Solvency       ITT       UTX          TXT   HON   RTN
           = Net Income/Sales
        x Sales/Avg. Total Assets
=Return on Assets= Net Income/Avg. Total
                 Assets
x Avg. Total Assets/Avg. Common Equity
   = ROE = NI / Avg. Common Equity
                 Ratings
Financial Analysis