Martin Manufacturing Company Income Statement For the year Ended December 31, 2006 $ Sales revenue Cost

of Goods sold Gross profit Operating expenses Selling expense General & administrative expenses Depreciation expense Total operating expense Operating profits Interest expense Net profit before taxes Taxes (rate=40%) Net profit after taxes Preferred stock dividends Earnings available for common stockholders Earnings per share (EPS) 650,000 416,000 152,000 1,218,000 153,000 93,000 60,000 24,000 36,000 3,000 33,000 0.33 5,075,000 3,704,000 1,371,000

Martin Manufacturing Company Balance Sheets Assets $ Current assets Cash Accounts receivable Inventories Total current assets Gross fixed assets (at cost) Accumulated depreciation Net fixed assets Total assets Liabilities and stockholder's equity $ Current Liabilities Accounts Payable Notes Payable Accruals Total current liabilities Long-term debt Total liabilities Stockholder's equity Preferred stock (2,500 shares, $ 1.20 dividend) Common stock (100,000 shares at $ 4 par) Paid-in capital in excess of par value Retained earnings Total stockholder's equity Total liabilities and stockholder's equity 230,000 311,000 75,000 616,000 1,165,250 1,781,250 $ 50,000 400,000 593,750 300,000 1,343,750 3,125,000 $ 400,500 370,000 100,902 871,402 700,000 1,571,402 $ 50,000 400,000 593,750 280,000 1,323,750 2,895,152 25,000 805,556 700,625 1,531,181 2,093,819 500,000 1,593,819 3,125,000 December, 31. 2006 $ 24,100 763,900 763,445 1,551,445 1,691,707 348,000 1,343,707 2,895,152 2005

Liquidity ratio: Current ratio Quick ratio Activity Ratio: Invertory turnover Average collection period Total asset turnover Average Payment period Debt ratio: Debt ratio Times interest earned ratio Profitability Ratio: Gross profit margin Net profit margin Return on total assets (ROA) Return on common equity (ROE) Operating Profit Margin Earnings per share (EPS) Market Ratio: Price/earnings (P/E) ratio Market/ book (M/B) ratio 34.48484848 2.845 27% 1% 1% 3% 0.030147783 0.33 57% 1.64516129 5.286708296 57.94 1.624 22.66 2.485683442 1.35

MARTIN MANUFACTURING COMPANY

HISTORCAL & INDUSTRIAL AVERAGE RATIOS

GOOD
YEAR $ $ ACTUAL ACTUAL 2004 2005 1.7 1 1.8 0.9

OK

POOR

EVALUATION
RATIO $ ACTUAL 2006 2.48563442 1.35 INDUSTRY AVERAGE CROSS SECTIONAL 2006 TIME SERIES 2004-2006 OVERALL

LIQUIDITY RATIO
Current ratio Quick Ratio 1.5 1.2

ACTIVITY RATIO
Inventory Turnover (times) Average Collection Period (days) Total Assets Turnover DEBT RATIO Debt ratio (&) Times Interest Earned Ratio PROFITIBILITY RATIO Gross Profit Margin (%) Net Profit Margin (%) Return On Total Assets (%) Return On Common Equity (%) MARKET RATIO Price/Earnings (P/E) Ratio Market/Book (M/B) Ratio 5.2 50.7 1.5 5 55.8 1.5 5.2867083 57.94 1.624 10.2 46 2

45.8 2.2

54.3 1.9

57 1.64516129

24.5 2.5

27.5 1.1 1.7 3.1

28 1 1.5 3.3

27% 1% 1% 3%

26 1.2 2.4 3.2

33.5 1

38.7 1.1

34.4848485 2.845

43.4 1.2

MARTIN MANUFACTURING COMPANY

HISTORCAL & INDUSTRIAL AVERAGE RATIOS

GOOD

OK

POOR

EVALUATION
$ RATIO YEAR $ $ ACTUAL 2006 2.48563442 1.35 INDUSTRY AVERAGE CROSS SECTIONAL 2006 GOOD OK TIME SERIES 2004-2006 GOOD GOOD OVERALL

ACTUAL ACTUAL 2004 2005 1.7 1 1.8 0.9

LIQUIDITY RATIO
Current ratio Quick Ratio 1.5 1.2 GOOD GOOD

ACTIVITY RATIO
Inventory Turnover (times) Average Collection Period (days) Total Assets Turnover DEBT RATIO Debt ratio (&) Times Interest Earned Ratio PROFITIBILITY RATIO Gross Profit Margin (%) Net Profit Margin (%) Return On Total Assets (%) Return On Common Equity (%) MARKET RATIO Price/Earnings (P/E) Ratio Market/Book (M/B) Ratio 5.2 50.7 1.5 5 55.8 1.5 5.2867083 57.94 1.624 10.2 46 2 POOR POOR OK OK POOR OK POOR POOR OK

45.8 2.2

54.3 1.9

57 1.64516129

24.5 2.5

POOR POOR

POOR POOR

POOR POOR

27.5 1.1 1.7 3.1

28 1 1.5 3.3

27% 1% 1% 3%

26 1.2 2.4 3.2

OK OK POOR OK

GOOD OK POOR OK

GOOD OK POOR OK

33.5 1

38.7 1.1

34.4848485 2.845

43.4 1.2

OK GOOD

GOOD GOOD

GOOD GOOD