acme aircraft supply, inc - ebb consulting · interest expense profit before tax taxes extra items...

Acme Aircraft Supply, Inc20 August 2004

Financial Health Scan&

Financial Diagnostics Report

Company Confidential

Executive Overview

The information contained in the following pages, has been prepared by EBB Consulting, Inc. using vendor supplied software applications and EBB Consulting expertise solely from financial information provided by EBB Client. In accepting this report you acknowledge than no warranty, representation, promise, or undertaking has been made by EBB Consulting, Inc. or its software vendors or any person or company on its behalf, in relation to any financial consequences of, or any other consequence or benefits obtained from the use of this report.

To the extent permitted by law, EBB Consulting, Inc. or any related company will not be liable for any loss, damage or injury (including without limitation any loss or profit, indirect consequential or incidental loss, damage or injury) arising from the supply or use of the report.

Financial Health Check

% Change Positive Negative

Gross Margin %

Profitability %

Interest Cover

Accounts Receivable Days

Working Capital %

Inventory Days

Accounts Payable Days

Debt to Equity

ROCE %

Activity

-7.27%

-22.40%

-33.96%

-22.72%

-0.26%

3.14%

-51.11%

5.28%

-48.90%

-22.39%

2000

30.24

12.40

.35

48.34

3.90

15.77

44.08

77.56

34.20

8.25

1999

32.61

15.98

.53

62.55

3.91

15.29

90.17

73.67

66.93

10.63

Total Cash Flow N/A863N/A

Cash After Ops N/A3,379N/A

Operating Exp % 15.69%19.2416.63

PROFITABILITY

WORKING CAPITAL

CASH FLOW/FUNDING

ROCE

Business Impact

Revenue 23.79%28,41422,953

Gross Profit 14.76%8,5917,486

EBIT -3.95%3,5243,669

EBIT Margin % -22.40%12.4015.98

Net Income % -13.88%6.087.06

Total Working Capital 27.64%4,4803,510

OTHER RATIOS

Capital Investment ---------------------------------

Accounts Receivable -36.75%2,6624,209

Inventory 34.91%4,2123,122

Accounts Payable -37.35%2,3943,821

Total Liab/Equity -36.16%1.131.77

Marginal Cash Flow -16.45%14.4717.32

Borrowed Funds -6.71%1,8922,028

X

X

X

X

XX

X

X

X

X

X

X

X

XX

X

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AcmeAircraftSupply081804.opt

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Financial Diagnostic Report

Profit and Loss Review

Profit & Loss

Revenue

COGS

Gross Profit

Overheads

Other

EBIT

Interest Expense

Profit Before Tax

Taxes

Extra Items

Net Profit

Dividends

Adjustments

Chng Ret Earnings

22,953

15,467

7,486

3,817

----------------

3,669

345

3,324

1,703

----------------

1,621

----------------

----------------

1,621

28,414

19,823

8,591

5,467

(400)

3,524

427

3,097

1,370

----------------

1,727

395

----------------

1,332

1999 2000 Variance ($)

5,461

4,356

1,105

1,650

(400)

(145)

82

(227)

(333)

----------------

106

395

----------------

(289)

The business has generated a Net Profit of $1,727 for the 2000 period, up on 1999 periodwhich showed a Profit of $1,621.

Profit & Loss Drivers 1999 2000

Rev. Growth %

COGS %

Overheads %

Profit & Loss Results

Gross Margin %

Profitability %

Net Profit/Sales

Interest Cover

-

67.39

16.63

32.61

15.98

7.06

10.63

23.79

69.76

19.24

30.24

12.40

6.08

8.25

24%

28%

15%

43%

-100%

-4%

24%

-7%

-20%

7%

100%

-18%

Variance (%)

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One Unit Analysis

Revenue

COGS

Gross Profit

Overheads

Other

EBIT

Interest

Profit Before Tax

Taxes

Extra Items

Net Profit

Dividends

Adjustments

Chng Ret Earnings

100.00

69.76

30.24

19.24

(1.41)

12.40

1.50

10.90

4.82

-

6.08

1.39

-

4.69

2000100.00

67.39

32.61

16.63

-

15.98

1.50

14.48

7.42

-

7.06

-

-

7.06

1999 Variance

2.37

-

2.61

(1.41)

(2.37)

-

(3.58)

(2.60)

-

(3.58)

1.39

-

(.98)

(2.37)

One unit analysis recalculates the Profit and Loss for both years as a % of revenue. Thevariance column shows the change from the prior to the current year.

1999 2000

Gross Profit

EBIT

Net Profit

Chng RetEarnings

32.61

15.98

7.06

7.06

30.24

12.40

6.08

4.69

0

5

10

15

20

25

30

35

0

5

10

15

20

25

30

35

1999

2000

Gross Profit EBIT Net Income

Ret Earnings

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Price Ch. %

Rev Gth %Revenue

Gross Profit

COGS % COGS

Overheads % Overheads

EBIT

Profitability %

Less Other

-

23.7928,414

8,591

69.76 19,823

19.24 5,467

3,524

12.40

Profitability %

Profitability is 12.40 in 2000 down from 15.98 in 1999.

DRIVERS FINANCIALS RESULTS

The Profitability flow chart shows the drivers that have an impact on Profitability. Toimprove Profitability the business must either increase price, reduce COGS or reduceOverheads.

Profitability is calculated as EBIT

Revenue

For each $1 of Revenue the business is making 12.40 cents of profit before any Interest,Tax or Dividends are paid.

Note: Changes in Revenue Growth will have little or no impact on Profitability % due tothe resultant increase in COGS and Overheads.

Note: Optimist assumes that Overheads are variable, this is consistent with modernActivity Based Costing concepts.

To increase Profitability, increase Gross Profit and reduceOverheads.

How to improve this ratio:

%

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Interest Cover is 8.25 which is above the generally accepted minimum Interest Cover of2. To improve Interest Cover, the business can either increase prices, increaseRevenue, reduce COGS, reduce Overheads or lower the effective Interest Rate it ispaying.

Price Ch. %

Rev Gth %Revenue

Gross Profit

COGS % COGS

Overheads % Overheads

EBIT

Less Other

Interest Cover

InterestEffect Int. %

-

23.7928,414

69.76 19,823

8,591

19.24 5,467

3,524

8.25

42721.79

Interest Cover


Interest Cover is 8.25 in 2000 down from 10.63 in 1999.

The Interest Cover flow chart shows how Interest Cover is calculated.

EBIT

InterestInterest Cover is calculated as

To increase Times Interest Earned, increase Gross Profit,reduce Overheads and/or reduce Interest.


Printed 8/20/2004 11:48:05 AM


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BALANCE SHEETCash at Bank

Acc Receivable

Inventory

Other CA

Current Assets

Fixed Assets - Net

Investments

Other NCA

Non Curr Assets

Total AssetsShort Term Debt

Accounts Payable

Other CL

Current Liabs

Long Term Debt

Other NCL

Non Curr Liabs

Total Liabs

Share Capital

Other Equity

Retained Earnings

Equity

Liabs & Equity

135

4,209

3,122

2,340

9,806

815

----------------

18

833

10,639528

3,821

652

5,001

1,500

300

1,800

6,801

387

596

2,855

3,838

10,639

862

2,662

4,212

2,388

10,124

1,367

----------------

24

1,391

11,515642

2,394

1,431

4,467

1,250

400

1,650

6,117

582

629

4,187

5,398

11,515

727

(1,547)

1,090

48

318

552

----------------

6

558

876114

(1,427)

779

(534)

(250)

100

(150)

(684)

195

33

1,332

1,560

876

Balance Sheet Review

Balance Sheet Drivers 1999 2000Days Receivable

Days Inventory

Days Payable

Balance Sheet ResultsWorking Cap %

Current Ratio

Total Liab/Equity

Equity/T Assets

Activity

66.93

73.67

90.17

15.29

1.96

1.77

36.07

3.91

34.20

77.56

44.08

15.77

2.27

1.13

46.88

3.90

1999 2000 Variance ($)

539%

-37%

35%

2%

3%

68%

33%

67%

8%22%

-37%

119%

-11%

-17%

33%

-8%

-10%

50%

6%

47%

41%

8%

Variance (%)

Working Capital Days 50.43 67.68

Printed 8/20/2004 11:48:05 AM


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How is the Business Funded?

FUNDING1999

NET ASSETS2000

FUNDING NET ASSETS

Equity3,838

5,866

7,290

Borrowed Funds

1,892

Equity5,398

Borrowed Funds + Equity = Net Assets

Debt to Equity .53 .35

Borrowed Funds

2,028

Relationship of Debt to Equity

Net Assets has increased by $1,424.The increase has been funded by equity of $1,560 andBorrowed Funds of ($136).

Calculation of Net Assets1999 2000

Current Assets

Non Curr Assets

Total Assets

9,806

833

10,639

10,124

1,391

11,515

Less:

Accounts Payable 3,821 2,394

Other CL 652 1,431

Other NCL 300 400

Net Assets 5,866 7,290

Printed 8/20/2004 11:48:05 AM


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Days Payable 44.08

Total Liabs / Equity

Curr Liabs 4,467

Total Liabs 6,117

NC Liabs 1,650

T Liabs/Equity 1.13

Equity 5,398


Total Liabs to Equity is 1.13 in 2000 down from 1.77 in 1999.

The Total Liabs to Equity flow chart shows how the business is funded. It shows theextent that the business is reliant on external vs internal sources for funding theoperations.

Total Liabs to Equity is calculated as

Equity

Total Liabilities

For each $1 of equity the owners have provided $1.13 have been provided by othersources:- creditors, financial institutions and others.

To reduce this ratio, reduce liabilities e.g. AccountsPayable or Borrowings or increase Equity through acapital injection.


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Equity to Total Assets

Equity 5,398

Equity/Tot Assets 46.88

Days Rec 34.20Curr Assets 10,124

Days Inv 77.56Total Assets 11,515

NCA 1,391

Equity to Total Assets is 46.88 in 2000 up from 36.07 in 1999.


Equity to Total Assets shows the proportion of Total Assets funded by the owners.

Equity to Total Assets is calculated as

Total Assets

Equity%

The business has Total Assets of $11,515 up from last year's $10,639, 46.88 of theseassets are funded internally and 53.12 funded externally, primarily from creditors,financial institutions and others.

To increase this ratio, reduce assets by collectingAccounts Receivable more quickly, reducing Inventoryand/or disposing of any excess assets. An increase inequity will also improve this ratio. This can be achieved byan injection of Share Capital or an increase in profit.


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Revenue

-

23.79

Price Ch. %

Rev Gth %

Working Capital %

Revenue 28,414

Working Cap % 15.77

Acc Rec 2,662

Inventory 4,212

Acc Pay 2,394

Days Rec. 34.20

Days Inventory 77.56

Days Payable 44.08

Working Capital % is 15.77% in 2000 up from 15.29% in 1999.


Working Capital % is a critical measure for a growing business. This measure indicatesthe proportion of each $1 of Revenue that needs to be invested in Working Capital togenerate that sale.

Working Capital % is calculated as Acc Rec + Inventory - Acc Pay%

The business has a Working Capital % of 15.77. For each $1 of Revenue 16 cents havebeen invested into Working Capital.

To reduce Working Capital: collect Accounts Receivablemore quickly, reduce Inventory and/or increase AccountsPayable terms. An increase in Revenue will only improvethis ratio if it is at better terms of trade or does not requireadditional Inventory.


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Marginal Cash Analysis

Revenue

COGS

Overheads

Gross Profit

Acc Receivable

Inventory

Acc Payable

Working Capital

Marginal Cash Flow

100.00

69.76

19.24

30.24

9.37

14.82

8.43

15.76

14.48

Net Variable Cash Flow (4.76)

100.00

67.39

16.63

32.61

18.34

13.60

16.65

15.29

17.32

.69

1999 2000

Marginal Cash Analysis shows what the cash requirements would be, if the businesswere to generate $1 of additional revenue. The Marginal Analysis assumes that there willbe no change in the relationships e.g. Gross Profit % or Overheads %.

From $1 of Revenue

The business has generated 30.24 cents of Gross Profit and invested 15.76 cents inWorking Capital.

This has caused a net variable outflow of -4.76 cents per $1 of Revenue.The NetVariable Cash Flow is negative because the Overheads of 19.24 are greater than themarginal Cash Flow of 14.48 per $1 Revenue. The funding for the growth in Revenuewill have to be attained in the form of debt or equity unless Revenue can increasewithout a subsequent increase in Overheads.

Marginal Cash Analysis

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30.24100.00

12.40

4.69

1.64

6.33

15.77

-9.44

Sustainable Growth Cycle Report

Shortfall

The Sustainable Growth concept takes the marginal cash analysis further. The sustainablegrowth cycle shows the surplus or shortfall in funding additional growth in Revenue. Theconcept of Sustainable Growth is based on the assumption that all relationships will remain inplace.

For each $1 of Revenue 30.24 cents of Gross Profit is generated with an EBIT of 12.40 centsand Retained Earnings of 4.69 cents. Assuming the business's Debt to Equity ratio of .35 ismaintained, the bank will provide an additional 1.64 cents of debt. Total available funding istherefore 6.33 cents. In order to generate the next $1 of Revenue, the business requires 15.77cents of Working Capital. There is a funding Shortfall of -9.44.

If the bank is not prepared to provide additional debt, the shortfall will be 11.08.

Note: It is assumed that the available funding is only utilised for Working Capital. If thebusiness requires any additional Fixed Assets to increase Revenue, the funding to theseassets will also have to be found.

Printed 8/20/2004 11:48:05 AM


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Current Ratio

Days Rec. 34.20


Days Payable 44.08

Curr Assets 10,124

Curr Liabs 4,467

Current Ratio 2.27

Current Ratio is 2.27 in 2000 up from 1.96 in 1999.


Current ratio measures the relationship between Current Assets and Current Liabilitiesand shows the ability of the business to fund its current obligations.

Current ratio is calculated as

Current Liabilities

Current Assets

The business has a Current Ratio of 2.27. For every $1 of Current Liabilities, thebusiness has $2.27 of Current Assets.

To increase this ratio, increase Current Assets andreduce Current Liabilities. Holding excess Current Assetsis not efficient for business. Ratios such as WorkingCapital %, Activity and ROCE % are all maximised whenCurrent Assets are minimised. Therefore, the key toimproving this ratio is to minimise Current Liabilities.


Printed 8/20/2004 11:48:05 AM


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Activity

-

23.79

Price Ch. %

Rev Gth %Revenue 28,414

Activity 3.90

Days Rec 34.20 Curr Assets 10,124

Net Curr - STD 6,299Days Inventory 77.56

CLiabs - STD 3,825

Days Payable 44.08

Net Assets 7,290

NCA 1,391

NCA - Net LTD 991

NCL - LTD 400

Activity is 3.90 in 2000 down from 3.91 in 1999.


Activity is also known as Asset Turnover. It shows how many times the business iseffectively turning over its Net Assets.

Activity is calculated asNet Assets

Revenue

Net assets are the operating assets of the business including Borrowed Funds.

The business has an Activity of 3.90 for every $1 of Net Assets and the business iscurrently generating $3.90 of Revenue. Activity indicates the ability of a business togrow.

How to improve this ratio: To reduce Working Capital: collect Accounts Receivablemore quickly, reduce Inventory and/or increase AccountsPayable terms. An increase in Revenue will only improvethis ratio if it is at better terms of trade or does not requireadditional Inventory or reduces Non Current Assets bydisposing of any unused assets.

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ROCE %

-

23.79

Price Ch. %

Rev Gth %

Revenue 28,414

Gross Profit 8,591

COGS 19,823COGS % 69.76

Overheads % 19.24 Overheads 5,467 EBIT 3,524

ROCE % 48.34

Days Rec. 34.20


Days Payable 44.08

Curr Assets 10,124

Net Curr - STD 6,299

CLiabs - STD 3,825

Net Assets 7,290

NCA 1,391

NCA - LTD 991

NCL - LTD 400

less Other

ROCE % is also calculated as Profitability x Activity

1999 2000

Profitability % = EBIT/Revenue %

Activity = Revenue / Net Assets

ROCE % = EBIT/Net Assets %

15.98

3.91

62.55

12.40

3.90

48.34

ROCE % is 48.34 in 2000 down from 62.55 in 1999.


Printed 8/20/2004 11:48:05 AM


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Analysis of ROCE %

ROCE % is also known as RONA (Return On Net Assets). It measures the rate of returnthe business is earning on the net assets it has invested in. ROCE % combines the Profitand Loss, and Balance Sheet into one measure and is calculated as:

Net Assets

EBIT%

How to improve this ratio: To increase Return on Capital Employed, the businessmust improve its Profit and Lost Statement, and orBalance Sheet management. This can be done bymaximising profitability and activity.

How to improve Profitability: To increase Profitability, increase Gross Profit and reduceOverheads.

How to improve Activity: To reduce Working Capital: collect Accounts Receivablemore quickly, reduce Inventory and/or increase AccountsPayable terms. An increase in Revenue will only improvethis ratio if it is at better terms of trade or does not requireadditional Inventory or reduces Non Current Assets bydisposing of any unused assets.

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Profit to Cash

Revenue

Change in Receivables

Cash From Sales

Cost of Goods Sold

Change in Inventories

Change in Payables

Cash Production Costs

GROSS CASH PROFITS

28,414

1,547

29,961

(19,823)

(1,090)

(1,427)

(22,340)

7,621

Operating Expense

Miscellaneous Transactions

Cash Operating Expense

CASH AFTER OPERATIONS

(5,467)

1,225

(4,242)

3,379

GROSS CASH PROFITS show the actual cashgenerated from Revenue less the actual cashspent on cost of Revenue. GROSS CASHPROFITS are therefore the actual cashreceipts less cash payments for Cost of Goods.

CASH AFTER OPERATIONS is a criticalmeasure for the business. Cash afterOperations measures the cash generated fromthe day to day operations of the business. Thecash payment for Overheads is subtractedfrom the Gross Cash Profits. Miscellaneoustransactions take Accruals and otherAdjustments into account.

Gross Cash Profits

Cash After Operations

GROSS CASH PROFITS 7,621

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Income Taxes Paid

NET CASH AFTER OPERATIONS

Interest Paid

Dividends Paid

Financing Cost

NET CASH INCOME

(1,370)

2,009

(427)

(395)

(822)

1,187

(552)

----------------

----------------

(552)

635

228

863

727

Change in Fixed Assets

Change in Investments

Change in Intangibles

Investment In Non Current Assets

NCI AFTER ASSETS

Change In Shareholder Funds

NCI AFTER SHAREHOLDER FUNDS

CHANGE IN CASH AT BANK

NET CASH INCOME measures the cashgenerated after the payment of Tax, Interestand Dividends.

Net Cash Income

Cash Flow

NCI AFTER ASSETS measures the cashavailable after the acquisitions and disposals ofFixed Assets, Investments and Intangibles

NET CASH INCOME 1,187

CASH AFTER OPERATIONS 3,379

(250)Change in Long Term Debt

114Change in Short Term Debt

135Opening Cash at Bank

862Closing Cash at Bank

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Revenue

Acc Receivable

COGS

Inventory

Accounts Payable

Overheads

24%

-37%

28%

35%

-37%

43%

5,461 5,461

-1,547 1,001 2,548

4,356 3,680 -676

1,090 879 -211

-1,427 1,076 -2,503

1,650 908 -742

Variance Growth Wastage/Gain

-1,515 69 -1,584

Cash Wastage Report

The Cash Wastage report highlights how efficiently the business has managed growth inRevenue.

Revenue has grown by 24 % or 5,461.

Accounts Receivable have decreased by -37 % or $1,547. A reduction in AccountsReceivable with an increase in Revenue has shown a positive impact on cash flow with again.

The business has reduced its Gross Margin. The effect of this is a wastage of $676.

Inventory has increased by 35 % or $1,090. If Inventory growth was limited to 28 % theincrease would have been $879. The additional increase in Inventory of 211 is wastage.

The business has reduced Accounts Payable by 37 % or $1,427. The increase in COGS% of 28 % would have expectations of an increase in Accounts Payable. The effect of thereduction in Accounts Payable has had a negative impact on cash flow of $2,503.

The business has increased Overheads more than the increase in Revenue. The effect ofthis is a wastage of $742.

----------------

----------------

Price Effect

----------------

Printed 8/20/2004 11:48:05 AM


Financial Summary

Profit & Loss

RevenueCOGSGross Profit

OverheadsOtherEBIT

Interest ExpenseProfit Before Tax

TaxesExtra ItemsNet Profit

DividendsAdjustmentsChng Ret Earnings

Balance Sheet

Cash at BankAcc ReceivableInventoryOther CACurrent Assets

Fixed Assets - NetInvestmentsOther NCANon Curr Assets

Total AssetsShort Term DebtAccounts PayableOther CLCurrent Liabs

Long Term DebtOther NCLNon Curr LiabsTotal Liabs

Share CapitalOther EquityRetained EarningsEquity

Liabs & Equity

22,95315,467

7,486

3,817----------------

3,669

3453,324

1,703----------------

1,621

--------------------------------

1,621

28,41419,823

8,591

5,467(400)3,524

4273,097

1,370----------------

1,727

395----------------

1,332

1354,2093,1222,3409,806

815----------------

18833

10,639528

3,821652

5,001

1,500300

1,8006,801

387596

2,8553,838

10,639

8622,6624,2122,388

10,124

1,367----------------

241,391

11,515642

2,3941,4314,467

1,250400

1,6506,117

582629

4,1875,398

11,515

1999 2000 Variance ($)

5,4614,3561,105

1,650(400)(145)

82(227)

(333)----------------

106

395----------------

(289)

727(1,547)

1,09048

318

552----------------

6558

876114

(1,427)779

(534)

(250)100

(150)(684)

19533

1,3321,560

876

Optimist 3000

Financial Summary - Dollars (Variance)


Page 19 of 23


Printed 8/20/2004 11:57:41 AM

Profit & Loss


OverheadsOtherEBIT




Balance Sheet






Liabs & Equity

22,95315,467

7,486

3,817----------------

3,669

3453,324

1,703----------------

1,621

--------------------------------

1,621

28,41419,823

8,591

5,467(400)3,524

4273,097

1,370----------------

1,727

395----------------

1,332

1354,2093,1222,3409,806

815----------------

18833

10,639528

3,821652

5,001

1,500300

1,8006,801

387596

2,8553,838

10,639

8622,6624,2122,388

10,124

1,367----------------

241,391

11,515642

2,3941,4314,467

1,250400

1,6506,117

582629

4,1875,398

11,515

1999 2000 Variance (%)

24%28%15%

43%-100%

-4%

24%-7%

-20%

7%

100%

-18%

539%-37%35%2%3%

68%

33%67%

8%22%

-37%119%-11%

-17%33%-8%

-10%

50%6%

47%41%

8%

Optimist 3000

Financial Summary - Percentages (Variance)


Page 20 of 23


Printed 8/20/2004 11:57:41 AM

Profit & Loss


OverheadsOtherEBIT




Balance Sheet






Liabs & Equity

22,95315,467

7,486

3,817----------------

3,669

3453,324

1,703----------------

1,621

--------------------------------

1,621

28,41419,823

8,591

5,467(400)3,524

4273,097

1,370----------------

1,727

395----------------

1,332

1354,2093,1222,3409,806

815----------------

18833

10,639528

3,821652

5,001

1,500300

1,8006,801

387596

2,8553,838

10,639

8622,6624,2122,388

10,124

1,367----------------

241,391

11,515642

2,3941,4314,467

1,250400

1,6506,117

582629

4,1875,398

11,515

1999 2000

Optimist 3000

Financial Summary


Page 21 of 23


Printed 8/20/2004 11:57:41 AM

Sensitivity Report

Profitability % -0.08

Net Profit/Sales

Interest Cover

Working Cap %

Current Ratio

Total Liab/Equity

Equity/T Assets

Activity

Cash Flow

Cash After Ops

Debt to Equity

ROCE %

Valuation

Value Added

8.14 7.01 8.06

Rev. Growth % COGS % Price Chng % Op Exps % Days Rec Days Inv Days Pay

-0.16 9.87 8.56 9.71 0.16

0.12 13.93 12.12 12.97 1.21 0.48 0.61

-0.63 -0.44 -0.95 -0.44 -0.44

-0.44 4.85 3.53 3.97 0.44

0.88 -6.18 -5.29 -5.29 -0.88

-0.26 3.71 2.86 3.11 0.41 0.17 0.02

0.26 0.26 0.51 0.51 0.26 0.26

-2.67 22.83 16.22 19.58 5.21 2.20 2.43

-0.33 9.23 7.64 8.40 1.24 0.53 0.59

-14.27 -11.41 -11.41 -2.85

0.23 8.50 7.67 8.07 0.58 0.25 0.27

1 % -1 % 1 % -1 % -1 % -1 % 1 %Sensitivity

Rev Gth % - Revenue Growth %COGS % - Cost of Goods Sold %Price Chng % - Price Change %Op Exps % - Operating Expense %Days Rec - Days ReceivableDays Inv - Days InventoryDays Pay - Days Payable

Res

ults

Drivers

Example : -1 % Change in COGS % would result in 8.14 change in Profitability % and therefore COGS % is the mostsensitive driver of Profitability %.

How to interpret the table:

Abbreviation:

Optimist 3000

Sensitivity Report


Page 23 of 23


Printed 8/20/2004 11:57:41 AM

Company Confidential

Copyright 2004 EBB Consulting, Inc.www.ebbconsulting.com

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EBB Consulting, Inc.