Forecasting 2007 2008 2009 2010 2011

Income Statement (USD)

Revenue 3,254,256 2,687,599 4,763,910 6,848,413 8,357,908
Sales Growth Y/Y -17% 77% 44% 22%
Direct cost 521,446 516,088 1,075,253 4,375,568 6,018,873
as % of revenue 16% 19% 23% 64% 72%
Gross Profit ### ### 3,688,657 2,472,845 ###
Indirect cost 2,346,797 2,517,747 3,175,886 2,313,033 2,841,013
as % of revenue 72% 94% 67% 34% 34%
Income from operations 386,013 (346,236) 512,771 159,812 (501,978)
Other income/expense
Interest income 49 646 1,039 8,274 10,000
as % of loans to shareholder+dep 0% 0% 20% 3% 3%
Interest expense (42,082) (63,190) 52,262 (73,619) (65,668)
as % of line of credit+capital leas 8% 9% -6% 7% 5%
Bad debt write of (41,915) (266) (8,692) - -
other expense - (38,404) (347) (33,536) (12,917)
as % of sales 0% -1% 0% 0% 0%
Net Income 302,065 (447,450) 557,033 60,931 (570,563)

Retained earnings, beg of year (265,709) (2,050) (411,441) 7,878 102,345

Prior period adjustments 263,661 (409,393) 419,320 94,467 (570,563)
Distribution to stockholders - - - - -
Retained earnings, end of year (2,048) (411,443) 7,879 102,345 (468,218)
Distribution as % of Net Income

Balance Sheet

Assets
Current Assets
Cash 1,413 40,915 6,279 32,646 35,938
Account receivable 493,581 424,457 1,032,792 1,575,672 1,745,566
Receivable turover 7 6 5 4 5
Other receivable - - - 1,403 -
Unbilled accounts receivable - - - 189,852 988,471
Prepaid expenses - - - 8,065 5,835
Loans to shareholders 137,743 137,743 - 320,504 307,075
Total 632,737 603,115 1,039,071 2,128,142 ###
Fixed Assets
Property,plant and equipment 25,596 33,306 49,823 112,618 100,827
% change 30% 50% 126% -10%
Deposits 5,228 5,228 5,228 5,228 5,228
Accrued interest receivable - - - 8,003 8,178
Total 30,824 38,534 55,051 125,849 114,233

Total Assets 663,561 641,649 1,094,122 2,253,991 ###

Liabilities and shareholders' equity

Current Liabilities
Accounts payable 95,852 272,868 326,527 835,248 1,840,109
as % of sales 3% 10% 7% 12% 22%
Payroll liabilities - 69 6,370 - -
 Accrued expenses 59,387 54,737 88,728 134,831 170,013
Line of credit 502,567 724,944 855,773 1,076,227 1,263,200
% change 44% 18% 26% 17%
Capital lease payable-current 2,032 887 - 23,530 21,626
Paying lease payments
Deferred revenue - - - - 310,204
Total 659,838 ### 1,277,398 2,069,836 ###

Capital lease obligations 887 - - 31,876 10,250

Total Liabilities 660,725 ### 1,277,398 2,101,712 ###

Stockholders' Equity
Common stock 1,000 1,000 1,000 1,000 1,000
Paid in capital 48,934 48,934 48,934 48,934 48,934
Equity adjustment - - (188,092) - -
Shareholders distribution (45,050) (50,350) (52,997) - -
Retained earnings (2,048) (411,441) 7,879 102,345 (468,218)
Total Equity 4,884 (416) (191,155) 49,934 49,934

Total Liabilities and Equity 663,561 641,648 1,094,122 2,253,991 ###

Check - 1 - - -

Valuation Working

Depreciation

Interest Expense (1- tax rate) 33,245 49,920 (41,287) 58,159 51,878

Working Capital 476,085 234,526 611,167 1,125,417 726,621

Changes in Working Capital (241,559) 376,641 514,250 (398,796)

PPE 25,596 33,306 49,823 112,618 100,827

Change in PPE (CAPEX) (7,710) (16,517) (62,795) 11,791

Weight of Debt
 2012 2013 2014 2015 2016 2017 2018

10,528,700 8,397,489 8,766,979 9,152,726 9,555,445 9,975,885 10,414,824

26% -20% 4.4% 4.4% 4.4% 4.4% 4.4%
6,552,808 4,579,075 5,537,936 5,781,605 6,035,996 6,301,579 6,578,849
62% 55% 63% 63% 63% 63% 63%
3,975,892 ### 3,229,043 3,371,121 3,519,450 3,674,306 3,835,975
3,196,355 3,586,914 3,086,837 3,222,658 3,364,455 3,512,491 3,667,040
30% 43% 35% 35% 35% 35% 35%
779,537 231,500 142,206 148,463 154,995 161,815 168,935

13,099 13,863 13,326 13,341 13,497 13,507 13,417

4% 4% 4% 4% 4% 4% 4%
(67,225) (54,169) (1,362) (1,339) (1,316) (1,294) (1,271)
6% 5% 5% 5% 5% 5% 5%
- -
(293) (50) (148) (155) (161) (169) (176)
0% 0% 0% 0% 0% 0% 0%
725,118 191,144 154,021 160,310 167,014 173,859 180,905

(468,218) 218,900 367,788 500,749 639,139 783,316 933,402

725,118 191,144 -
(38,000) (42,256) (21,060) (21,920) (22,837) (23,773) (24,736)
218,900 367,788 500,749 639,139 783,316 933,402 1,089,571
5% 22% 14% 14% 14% 14% 14%

204,378 168,244 911,899 960,000 1,104,760 1,188,381 1,330,477

2,561,413 1,319,178 1,377,222 1,437,820 1,501,084 1,567,131 1,636,085
4 6 6 6 6 6 6
- 60,000 0 0 0 0 0
- - 0 0 0 0 0
6,601 8,595 7,274 7,076 7,387 7,583 7,330
325,233 335,197 322,002 322,377 326,202 326,445 324,256
3,097,625 ### 2,618,397 2,727,273 2,939,433 3,089,540 3,298,148

119,384 109,531 109,415 109,299 109,183 109,067 108,951

18% -8% 0% 0% 0% 0% 0%
5,228 5,228 5,228 5,228 5,228 5,228 5,228
- - - - - - -
124,612 114,759 114,643 114,527 114,411 114,295 114,179

3,222,237 ### 2,733,040 2,841,799 3,053,844 3,203,835 3,412,327

1,511,480 236,450 893,438 932,749 1,060,333 1,118,756 1,224,748

14% 3% 10% 10% 11% 11% 12%
222,297 208,474 215,386 211,930 213,658 212,794 213,226
 - - - - - - -
1,190,162 1,116,218 1,046,868 981,827 920,827 863,616 809,960
-6% -6% -6% -6% -6% -6% -6%
18,706 18,484 18,262 18,040 17,818 17,596 17,374
(222) (222) (222) (222) (222) (222)
- - 0 0 0 0 0
2,942,645 ### 2,173,953 2,144,546 2,212,635 2,212,762 2,265,308

10,758 8,625 8,403 8,181 7,959 7,737 7,515

2,953,403 ### 2,182,356 2,152,727 2,220,594 2,220,499 2,272,823

1,000 1,000 1,000 1,000 1,000 1,000 1,000

48,934 48,934 48,934 48,934 48,934 48,934 48,934
- - 0 0 0 0 0
- - 0 0 0 0 0
218,900 367,788 500,749 639,139 783,316 933,402 1,089,571
49,934 49,934 49,934 49,934 49,934 49,934 49,934

3,222,237 ### 2,733,040 2,841,799 3,053,844 3,203,835 3,412,327

- - - - - - -

(116) (116) (116) (116) (116)

53,108 42,794 1,076 1,058 1,040 1,022 1,004

1,159,470 1,278,046 597,675 622,594 560,682 569,609 529,698

432,849 118,576 (680,371) 24,919 (61,912) 8,927 (39,911)

119,384 109,531 109,415 109,299 109,183 109,067 108,951

(18,557) 9,853 116 116 116 116 116

0.96
Assumptions
Sales can also be link to GDP. Long term GDP growth rate is 2.3% according to World Bank (Given in case)
IBIS World’s consulting industry report predicted a ten-year growth rate of 4.4 Mark believed that CS could grow i

Average of last 4 years

Average of last 4 years

0

Assuming recent given year effective rate

COMPANY HAS STARTED HIDING DEBT THAT’S WHY LOWER AMOUNT
Taking effective interest rate of last 3 years, assuming no change in LIBOR rates

Assuming recent 2 years average as % of sales

Prior period ending is beginning

No adjustments
Distribution to stockholders as % of Net income

Average of last 2 year, although company is growing and need to retain more but paying to shareholders is als

Assuming latest receivable turnover

No other receivable assumed
No unbilled accounts receivable
Changing average of last 4 years
Changing average of last 4 years

Average change of last 3 year, cannot make detailed PPE schedule due to data limitation
Stable

Taking moving average

Moving average
Paying off the credit
SHORT TERM OBLIGATION
ASUMING 222 DROP

Down by the same amount as current capital lease payable, since current is a part of long term capital lease (c

Current corporate tax rate of USA is 21%, source: Google

ved that CS could grow its sales considerably faster, at double this rate, with the sales growth rate tapering of to 4.4 percent in time.

to shareholders is also important to make the stock price stable

g term capital lease (cannot make lease schedule due to limitation of data)
to 4.4 percent in time.
Income Statement (USD) 2007 2008 2009 2010 2011

Revenue 3,254,256 2,687,599 4,763,910 6,848,413 8,357,908

Direct cost 521,446 516,088 1,075,253 4,375,568 6,018,873
Gross Profit ### ### ### ### ###
Indirect cost 2,346,797 2,517,747 3,175,886 2,313,033 2,841,013
Income from operations 386,013 (346,236) 512,771 159,812 (501,978)
Other income/expense
Interest income 49 646 1,039 8,274 10,000
Interest expense (42,082) (63,190) 52,262 (73,619) (65,668)
Bad debt write of (41,915) (266) (8,692) - -
other expense - (38,404) (347) (33,536) (12,917)
Net Income 302,065 (447,450) 557,033 60,931 (570,563)

Retained earnings, beg of year (265,709) (2,050) (411,441) 7,878 102,345

Prior period adjustments 263,661 (409,393) 419,320 94,467 (570,563)
Distribution to stockholders - - - - -
Retained earnings, end of year (2,048) (411,443) 7,879 102,345 (468,218)

Common Sizing

Vertical Analysis
Revenue 100% 100% 100% 100% 100%
Direct cost 16% 19% 23% 64% 72%
Gross Profit 84% 81% 77% 36% 28%
Indirect cost 72% 94% 67% 34% 34%
Income from operations 12% -13% 11% 2% -6%
Other income/expense 0% 0% 0% 0% 0%
Interest income 0% 0% 0% 0% 0%
Interest expense -1% -2% 1% -1% -1%
Bad debt write of -1% 0% 0% 0% 0%
other expense 0% -1% 0% 0% 0%
Net Income 9% -17% 12% 1% -7%

Horizontol Analysis
Revenue 100% 83% 146% 210% 257%
Direct cost 100% 99% 206% 839% 1154%
Gross Profit 100% 79% 135% 90% 86%
Indirect cost 100% 107% 135% 99% 121%
Income from operations 100% -90% 133% 41% -130%
Other income/expense
Interest income 100% 1318% 2120% 16886% 20408%
Interest expense 100% 150% -124% 175% 156%
Bad debt write of 100% 1% 21% 0% 0%
other expense * 1% 87% 34%
Net Income 100% -148% 184% 20% -189%

* Taking 2008 as base year for other expense, as 2007 other expense is zero
 2012 2013 2014 2015 2016 2017 2018

10,528,700 8,397,489 8,766,979 9,152,726 9,555,445 9,975,885 ###

6,552,808 4,579,075 5,537,936 5,781,605 6,035,996 6,301,579 6,578,849
3,975,892 ### ### ### ### ### ###
3,196,355 3,586,914 3,086,837 3,222,658 3,364,455 3,512,491 3,667,040
779,537 231,500 142,206 148,463 154,995 161,815 168,935

13,099 13,863 13,326 13,341 13,497 13,507 13,417

(67,225) (54,169) (1,362) (1,339) (1,316) (1,294) (1,271)
- - - - - - -
(293) (50) (148) (155) (161) (169) (176)
725,118 191,144 154,021 160,310 167,014 173,859 180,905

(468,218) 218,900 367,788 500,749 639,139 783,316 933,402

725,118 191,144 - - - - -
(38,000) (42,256) (21,060) (21,920) (22,837) (23,773) (24,736)
218,900 367,788 500,749 639,139 783,316 933,402 1,089,571

100% 100% 100% 100% 100% 100% 100% EVERYTHING /SALE FOR
62% 55% 63% 63% 63% 63% 63%
38% 45% 37% 37% 37% 37% 37%
30% 43% 35% 35% 35% 35% 35%
7% 3% 2% 2% 2% 2% 2%
0% 0% 0% 0% 0% 0% 0%
0% 0% 0% 0% 0% 0% 0%
-1% -1% 0% 0% 0% 0% 0%
0% 0% 0% 0% 0% 0% 0%
0% 0% 0% 0% 0% 0% 0%
7% 2% 2% 2% 2% 2% 2%

324% 258% 269% 281% 294% 307% 320%

1257% 878% 1062% 1109% 1158% 1208% 1262%
145% 140% 118% 123% 129% 134% 140%
136% 153% 132% 137% 143% 150% 156%
202% 60% 37% 38% 40% 42% 44%

26733% 28292% 27195% 27226% 27544% 27564% 27383%

160% 129% 3% 3% 3% 3% 3%
0% 0% 0% 0% 0% 0% 0%
1% 0% 0% 0% 0% 0% 0%
240% 63% 51% 53% 55% 58% 60%
EVERYTHING /SALE FOR SAME ERIOD
 Balance Sheet (USD) 2007 2008 2009 2010 2011
Assets
Current Assets
Cash 1,413 40,915 6,279 32,646 35,938
Account receivable 493,581 424,457 1,032,792 1,575,672 1,745,566
Other receivable - - - 1,403 -
Unbilled accounts receivable - - - 189,852 988,471
Prepaid expenses - - - 8,065 5,835
Loans to shareholders 137,743 137,743 - 320,504 307,075
Total 632,737 603,115 1,039,071 2,128,142 3,082,885
Fixed Assets
Property,plant and equipment 25,596 33,306 49,823 112,618 100,827
Deposits 5,228 5,228 5,228 5,228 5,228
Accrued interest receivable - - - 8,003 8,178
Total 30,824 38,534 55,051 125,849 114,233

Total Assets 663,561 641,649 1,094,122 2,253,991 3,197,118

Liabilities and shareholders' equity

Current Liabilities
Accounts payable 95,852 272,868 326,527 835,248 1,840,109
Payroll liabilities - 69 6,370 - -
Accrued expenses 59,387 54,737 88,728 134,831 170,013
Line of credit 502,567 724,944 855,773 1,076,227 1,263,200
Capital lease payable-current 2,032 887 - 23,530 21,626
Deferred revenue - - - - 310,204
Total 659,838 1,053,505 1,277,398 2,069,836 3,605,152
Capital lease obligations 887 - - 31,876 10,250
Total Liabilities 660,725 1,053,505 1,277,398 2,101,712 3,615,402

Stockholders' Equity
Common stock 1,000 1,000 1,000 1,000 1,000
Paid in capital 48,934 48,934 48,934 48,934 48,934
Equity adjustment - - (188,092) - -
Shareholders distribution (45,050) (50,350) (52,997) - -
Retained earnings (2,048) (411,441) 7,879 102,345 (468,218)
Total Equity 4,884 (416) (191,155) 49,934 49,934

Total Liabilities and Equity 663,561 641,648 1,094,122 2,253,991 3,197,118

Check - 1 - - -

Common Sizing

Vertical Analysis

Assets
Current Assets
Cash 0% 6% 1% 1% 1%
Account receivable 74% 66% 94% 70% 55%
Other receivable 0% 0% 0% 0% 0%
Unbilled accounts receivable 0% 0% 0% 8% 31%
 Prepaid expenses 0% 0% 0% 0% 0%
Loans to shareholders 21% 21% 0% 14% 10%
Total 95% 94% 95% 94% 96%
Fixed Assets
Furniture and fixtures 1% 1% 1% 1% 1%
Computer equipment 4% 6% 6% 6% 5%
Computer software 8% 8% 4% 1% 1%
Accumulated depreciation -9% -10% -6% -3% -3%
Property,plant and equipment 4% 5% 5% 5% 3%
Deposits 1% 1% 0% 0% 0%
Accrued interest receivable 0% 0% 0% 0% 0%
Total 5% 6% 5% 6% 4%

Total Assets 100% 100% 100% 100% 100%

Liabilities and shareholders' equity

Current Liabilities
Accounts payable 14% 43% 30% 37% 58%
Payroll liabilities 0% 0% 1% 0% 0%
Accrued expenses 9% 9% 8% 6% 5%
Line of credit 76% 113% 78% 48% 40%
Capital lease payable-current 0% 0% 0% 1% 1%
Deferred revenue 0% 0% 0% 0% 10%
Total 99% 164% 117% 92% 113%
0% 0% 0% 0% 0%
Capital lease obligations 0% 0% 0% 1% 0%
Total Liabilities 100% 164% 117% 93% 113%

Stockholders' Equity
Common stock 0% 0% 0% 0% 0%
Paid in capital 7% 8% 4% 2% 2%
Equity adjustment 0% 0% -17% 0% 0%
Shareholders distribution -7% -8% -5% 0% 0%
Retained earnings 0% -64% 1% 5% -15%
Total Equity 1% 0% -17% 2% 2%

Total Liabilities and Equity 100% 100% 100% 100% 100%

Horizontal Analysis

Assets
Current Assets
Cash 100% 2896% 444% 2310% 2543%
Account receivable 100% 86% 209% 319% 354%
Other receivable #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Unbilled accounts receivable #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Prepaid expenses #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Loans to shareholders 100% 100% 0% 233% 223%
Total
Fixed Assets
Furniture and fixtures 100% 228% 228% 474% 474%
Computer equipment 100% 136% 216% 446% 507%
 Computer software 100% 100% 86% 65% 78%
Accumulated depreciation 100% 114% 114% 120% 183%
Property,plant and equipment 100% 130% 195% 440% 394%
Deposits 100% 100% 100% 100% 100%
Accrued interest receivable #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Total 100% 125% 179% 408% 371%

Total Assets 100% 97% 165% 340% 482%

Liabilities and shareholders' equity

Current Liabilities
Accounts payable 100% 285% 341% 871% 1920%
Payroll liabilities #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Accrued expenses 100% 92% 149% 227% 286%
Line of credit 100% 144% 170% 214% 251%
Capital lease payable-current 100% 44% 0% 1158% 1064%
Deferred revenue #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Total 100% 160% 194% 314% 546%

Capital lease obligations 100% 0% 0% 3594% 1156%

Total Liabilities 100% 159% 193% 318% 547%

Stockholders' Equity
Common stock 100% 100% 100% 100% 100%
Paid in capital 100% 100% 100% 100% 100%
Equity adjustment #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Shareholders distribution 100% 112% 118% 0% 0%
Retained earnings 100% 20090% -385% -4997% 22862%
Total Equity 100% -9% -3914% 1022% 1022%

Total Liabilities and Equity 100% 97% 165% 340% 482%

 2012 2013 2014 2015 2016 2017 2018

204,378 168,244 911,899 960,000 1,104,760 1,188,381 1,330,477

2,561,413 1,319,178 1,377,222 1,437,820 1,501,084 1,567,131 1,636,085
- 60,000 - - - - -
- - - - - - -
6,601 8,595 7,274 7,076 7,387 7,583 7,330
325,233 335,197 322,002 322,377 326,202 326,445 324,256
3,097,625 1,891,214 2,618,397 2,727,273 2,939,433 3,089,540 3,298,148

119,384 109,531 109,415 109,299 109,183 109,067 108,951

5,228 5,228 5,228 5,228 5,228 5,228 5,228
- - - - - - -
124,612 114,759 114,643 114,527 114,411 114,295 114,179
- - - - -
3,222,237 2,005,973 2,733,040 2,841,799 3,053,844 3,203,835 3,412,327

1,511,480 236,450 893,438 932,749 1,060,333 1,118,756 1,224,748

222,297 208,474 215,386 211,930 213,658 212,794 213,226
- - - - - - -
1,190,162 1,116,218 1,046,868 981,827 920,827 863,616 809,960
18,706 18,484 18,262 18,040 17,818 17,596 17,374
- - - - - - -
2,942,645 1,579,626 2,173,953
- 2,144,546
- 2,212,635
- 2,212,762
- 2,265,308
-
10,758 8,625 8,403 8,181 7,959 7,737 7,515
2,953,403 1,588,251 2,182,356 2,152,727 2,220,594 2,220,499 2,272,823

1,000 1,000 1,000 1,000 1,000 1,000 1,000

48,934 48,934 48,934 48,934 48,934 48,934 48,934
- - - - - - -
- - - - - - -
218,900 367,788 500,749 639,139 783,316 933,402 1,089,571
49,934 49,934 49,934 49,934 49,934 49,934 49,934
- - - - -
3,222,237 2,005,973 2,733,040 2,841,799 3,053,844 3,203,835 3,412,327

- - - - - - -

6% 8% 33% 34% 36% 37% 39%

79% 66% 50% 51% 49% 49% 48%
0% 3% 0% 0% 0% 0% 0%
0% 0% 0% 0% 0% 0% 0%
 0% 0% 0% 0% 0% 0% 0%
10% 17% 12% 11% 11% 10% 10%
96% 94% 96% 96% 96% 96% 97%

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%
4% 5% 4% 4% 4% 3% 3%
0% 0% 0% 0% 0% 0% 0%
0% 0% 0% 0% 0% 0% 0%
4% 6% 4% 4% 4% 4% 3%

100% 100% 100% 100% 100% 100% 100%

47% 12% 33% 33% 35% 35% 36%

7% 10% 8% 7% 7% 7% 6%
0% 0% 0% 0% 0% 0% 0%
37% 56% 38% 35% 30% 27% 24%
1% 1% 1% 1% 1% 1% 1%
0% 0% 0% 0% 0% 0% 0%
91% 79% 80% 75% 72% 69% 66%
0% 0% 0% 0% 0% 0% 0%
0% 0% 0% 0% 0% 0% 0%
92% 79% 80% 76% 73% 69% 67%

0% 0% 0% 0% 0% 0% 0%
2% 2% 2% 2% 2% 2% 1%
0% 0% 0% 0% 0% 0% 0%
0% 0% 0% 0% 0% 0% 0%
7% 18% 18% 22% 26% 29% 32%
2% 2% 2% 2% 2% 2% 1%

100% 100% 100% 100% 100% 100% 100%

14464% 11907% 64536% 67941% 78185% 84103% 94160%

519% 267% 279% 291% 304% 318% 331%
#DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
236% 243% 234% 234% 237% 237% 235%

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%
466% 428% 427% 427% 427% 426% 426%
100% 100% 100% 100% 100% 100% 100%
#DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
404% 372% 372% 372% 371% 371% 370%

486% 302% 412% 428% 460% 483% 514%

1577% 247% 932% 973% 1106% 1167% 1278%

#DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
0% 0% 0% 0% 0% 0% 0%
237% 222% 208% 195% 183% 172% 161%
921% 910% 899% 888% 877% 866% 855%
#DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
446% 239% 329% 325% 335% 335% 343%

1213% 972% 947% 922% 897% 872% 847%

447% 240% 330% 326% 336% 336% 344%

100% 100% 100% 100% 100% 100% 100%

100% 100% 100% 100% 100% 100% 100%
#DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
0% 0% 0% 0% 0% 0% 0%
-10688% -17958% -24451% -31208% -38248% -45576% -53202%
1022% 1022% 1022% 1022% 1022% 1022% 1022%

486% 302% 412% 428% 460% 483% 514%

 Common Sizing 2007 2008 2009 2010 2011 2012

Vertical Analysis

Income Statement

Revenue 100% 100% 100% 100% 100% 100%

Direct cost 16% 19% 23% 64% 72% 62%
Gross Profit 84% 81% 77% 36% 28% 38%
Indirect cost 72% 94% 67% 34% 34% 30%
Income from operations 12% -13% 11% 2% -6% 7%
Other income/expense 0% 0% 0% 0% 0% 0%
Interest income 0% 0% 0% 0% 0% 0%
Interest expense -1% -2% 1% -1% -1% -1%
Bad debt write of -1% 0% 0% 0% 0% 0%
other expense 0% -1% 0% 0% 0% 0%
Net Income 9% -17% 12% 1% -7% 7%

Balance Sheet

Assets
Current Assets
Cash 0% 6% 1% 1% 1% 6%
Account receivable 74% 66% 94% 70% 55% 79%
Other receivable 0% 0% 0% 0% 0% 0%
Unbilled accounts receivable 0% 0% 0% 8% 31% 0%
Prepaid expenses 0% 0% 0% 0% 0% 0%
Loans to shareholders 21% 21% 0% 14% 10% 10%
Total 95% 94% 95% 94% 96% 96%
Fixed Assets
Furniture and fixtures 1% 1% 1% 1% 1% 0%
Computer equipment 4% 6% 6% 6% 5% 0%
Computer software 8% 8% 4% 1% 1% 0%
Accumulated depreciation -9% -10% -6% -3% -3% 0%
Property,plant and equipment 4% 5% 5% 5% 3% 4%
Deposits 1% 1% 0% 0% 0% 0%
Accrued interest receivable 0% 0% 0% 0% 0% 0%
Total 5% 6% 5% 6% 4% 4%

Total Assets 100% 100% 100% 100% 100% 100%

Liabilities and shareholders' equity

Current Liabilities
Accounts payable 14% 43% 30% 37% 58% 47%
Payroll liabilities 0% 0% 1% 0% 0% 7%
Accrued expenses 9% 9% 8% 6% 5% 0%
Line of credit 76% 113% 78% 48% 40% 37%
Capital lease payable-current 0% 0% 0% 1% 1% 1%
Deferred revenue 0% 0% 0% 0% 10% 0%
Total 99% 164% 117% 92% 113% 91%

Capital lease obligations 0% 0% 0% 1% 0% 0%

Total Liabilities 100% 164% 117% 93% 113% 92%
 Stockholders' Equity
Common stock 0% 0% 0% 0% 0% 0%
Paid in capital 7% 8% 4% 2% 2% 2%
Equity adjustment 0% 0% -17% 0% 0% 0%
Shareholders distribution -7% -8% -5% 0% 0% 0%
Retained earnings 0% -64% 1% 5% -15% 7%
Total Equity 1% 0% -17% 2% 2% 2%

Total Liabilities and Equity 100% 100% 100% 100% 100% 100%
2013 2014 2015 2016 2017 2018

100% 100% 100% 100% 100% 100%

55% 63% 63% 63% 63% 63%
45% 37% 37% 37% 37% 37%
43% 35% 35% 35% 35% 35%
3% 2% 2% 2% 2% 2%
0% 0% 0% 0% 0% 0%
0% 0% 0% 0% 0% 0%
-1% 0% 0% 0% 0% 0%
0% 0% 0% 0% 0% 0%
0% 0% 0% 0% 0% 0%
2% 2% 2% 2% 2% 2%

8% 33% 34% 36% 37% 39%

66% 50% 51% 49% 49% 48%
3% 0% 0% 0% 0% 0%
0% 0% 0% 0% 0% 0%
0% 0% 0% 0% 0% 0%
17% 12% 11% 11% 10% 10%
94% 96% 96% 96% 96% 97%

0% 0% 0% 0% 0% 0%
0% 0% 0% 0% 0% 0%
0% 0% 0% 0% 0% 0%
0% 0% 0% 0% 0% 0%
5% 4% 4% 4% 3% 3%
0% 0% 0% 0% 0% 0%
0% 0% 0% 0% 0% 0%
6% 4% 4% 4% 4% 3%

100% 100% 100% 100% 100% 100%

12% 33% 33% 35% 35% 36%

10% 8% 7% 7% 7% 6%
0% 0% 0% 0% 0% 0%
56% 38% 35% 30% 27% 24%
1% 1% 1% 1% 1% 1%
0% 0% 0% 0% 0% 0%
79% 80% 75% 72% 69% 66%

0% 0% 0% 0% 0% 0%
79% 80% 76% 73% 69% 67%
 0% 0% 0% 0% 0% 0%
2% 2% 2% 2% 2% 1%
0% 0% 0% 0% 0% 0%
0% 0% 0% 0% 0% 0%
18% 18% 22% 26% 29% 32%
2% 2% 2% 2% 2% 1%

100% 100% 100% 100% 100% 100%

 Common Sizing 2007 2008 2009 2010 2011 2012

Horizontol Analysis

Income Statement

Revenue 100% 83% 146% 210% 257% 324%

Direct cost 100% 99% 206% 839% 1154% 1257%
Gross Profit 100% 79% 135% 90% 86% 145%
Indirect cost 100% 107% 135% 99% 121% 136%
Income from operations 100% -90% 133% 41% -130% 202%
Other income/expense 0% 0% 0% 0% 0% 0%
Interest income 100% 1318% 2120% 16886% 20408% 26733%
Interest expense 100% 150% -124% 175% 156% 160%
Bad debt write of 100% 1% 21% 0% 0% 0%
other expense 0% 0% 1% 87% 34% 1%
Net Income 100% -148% 184% 20% -189% 240%

Balance Sheet

Assets
Current Assets
Cash 100% 2896% 444% 2310% 2543% 14464%
Account receivable 100% 86% 209% 319% 354% 519%
Other receivable #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Unbilled accounts receivable #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Prepaid expenses #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Loans to shareholders 100% 100% 0% 233% 223% 236%
Total 0% 0% 0% 0% 0% 0%
Fixed Assets
Furniture and fixtures 100% 228% 228% 474% 474% 0%
Computer equipment 100% 136% 216% 446% 507% 0%
Computer software 100% 100% 86% 65% 78% 0%
Accumulated depreciation 100% 114% 114% 120% 183% 0%
Property,plant and equipment 100% 130% 195% 440% 394% 466%
Deposits 100% 100% 100% 100% 100% 100%
Accrued interest receivable #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Total 100% 125% 179% 408% 371% 404%

Total Assets 100% 97% 165% 340% 482% 486%

Liabilities and shareholders' equity

Current Liabilities
Accounts payable 100% 285% 341% 871% 1920% 1577%
Payroll liabilities #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Accrued expenses 100% 92% 149% 227% 286% 0%
Line of credit 100% 144% 170% 214% 251% 237%
Capital lease payable-current 100% 44% 0% 1158% 1064% 921%
Deferred revenue #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Total 100% 160% 194% 314% 546% 446%

Capital lease obligations 100% 0% 0% 3594% 1156% 1213%

Total Liabilities 100% 159% 193% 318% 547% 447%
 Stockholders' Equity
Common stock 100% 100% 100% 100% 100% 100%
Paid in capital 100% 100% 100% 100% 100% 100%
Equity adjustment #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Shareholders distribution 100% 112% 118% 0% 0% 0%
Retained earnings 100% 20090% -385% -4997% 22862% -10688%
Total Equity 100% -9% -3914% 1022% 1022% 1022%

Total Liabilities and Equity 100% 97% 165% 340% 482% 486%
 2013 2014 2015 2016 2017 2018

258% 269% 281% 294% 307% 320%

878% 1062% 1109% 1158% 1208% 1262%
140% 118% 123% 129% 134% 140%
153% 132% 137% 143% 150% 156%
60% 37% 38% 40% 42% 44%
0% 0% 0% 0% 0% 0%
28292% 27195% 27226% 27544% 27564% 27383%
129% 3% 3% 3% 3% 3%
0% 0% 0% 0% 0% 0%
0% 0% 0% 0% 0% 0%
63% 51% 53% 55% 58% 60%

11907% 64536% 67941% 78185% 84103% 94160%

267% 279% 291% 304% 318% 331%
#DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
243% 234% 234% 237% 237% 235%
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%
428% 427% 427% 427% 426% 426%
100% 100% 100% 100% 100% 100%
#DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
372% 372% 372% 371% 371% 370%

302% 412% 428% 460% 483% 514%

247% 932% 973% 1106% 1167% 1278%

#DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
0% 0% 0% 0% 0% 0%
222% 208% 195% 183% 172% 161%
910% 899% 888% 877% 866% 855%
#DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
239% 329% 325% 335% 335% 343%

972% 947% 922% 897% 872% 847%

240% 330% 326% 336% 336% 344%
 100% 100% 100% 100% 100% 100%
100% 100% 100% 100% 100% 100%
#DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
0% 0% 0% 0% 0% 0%
-17958% -24451% -31208% -38248% -45576% -53202%
1022% 1022% 1022% 1022% 1022% 1022%

302% 412% 428% 460% 483% 514%

 2007 2008 2009 2010 2011 2012 2013 2014

Liquidity Ratios

Current ratio 0.96 0.57 0.81 1.03 0.86 1.05 1.20 1.20

Quick ratio 0.75 0.44 0.81 0.78 0.49 0.94 0.94 1.05

Solvency Ratios

Long term debt to equi 60% -213% 0% 111% 64% 59% 54% 53%

Short term debt to equThere is no short term debt in company

Debt to Assets 0% 0% 0% 2% 1% 1% 1% 1%

Financial Leverage (As 136 -1542 -6 45 64 65 40 55

Interest coverage/Time 9 -5 -10 2 -8 12 4 104

Profitability Ratios

Gross Margin 84% 81% 77% 36% 28% 38% 45% 37%

Operating Margin 12% -13% 11% 2% -6% 7% 3% 2%

Net Margin 9% -17% 12% 1% -7% 7% 2% 2%

ROA 46% -70% 51% 3% -18% 23% 10% 6%

ROE 6185% 107560% -291% 122% -1143% 1452% 383% 308%

Turnover/Activity Ratios

Receivable turnover 7 6 5 4 5 4 6 6

Days Sales Outstandin 55 58 79 84 76 89 57 57

Inventory turnover Since company is not a manufacturing company, therefore there is no inventory

Payable turnover Payable turnover is Purchases/Accounts payable, cannot calculate this because data of pur
 2015 2016 2017 2018

1.27 1.33 1.40 1.46

1.12 1.18 1.25 1.31

53% 52% 51% 50%

1% 1% 1% 1%

57 61 64 68

111 118 125 133

37% 37% 37% 37%

2% 2% 2% 2%

2% 2% 2% 2%

6% 5% 5% 5%

321% 334% 348% 362%

6 6 6 6

57 57 57 57

o inventory

is because data of purchases is not available

Valuation 2014 2015 2016 2017 2018

Time Factor (Yr) 1 2 3 4 5

FCFF
Net income 154,021 160,310 167,014 173,859 180,905
Add:
Depreciation 116 116 116 116 116
Interest Expense (1-t) 1,076 1,058 1,040 1,022 1,004
Less:
Change in working capital (680,371) 24,919 (61,912) 8,927 (39,911)
Capital expenditure 116 116 116 116 116
FCFF 835,469 136,449 229,965 165,954 221,820
PV of FCFF 769,968 115,892 180,008 119,718 147,474

Discount Rate (WACC) 9%

Terminal Value 2,430,618
Terminal Growth Rate 2.30%
NPV 3,763,678
Debt (line of credit+lease obligations 1,143,327
Value of equity 2,620,351
NPV/Share (Fair value/per share) 2,620

Number of shares 1,000

Cost of equity
Risk-free Rate (10 Year USA Treasury 2.72%
Market Risk Premium 6%
Beta 1
Cost of equity 9%

Cost of debt
Rate 5%
Tax rate 21%
Cost of tax-adjusted debt 4%

Weighted Average Cost of Capital

Cost of Equity 9%
Cost of Debt (tax adjusted) 4%
Weight of Equity 0.04
Weight of Debt 0.96
WACC 9%
Assumptions

We are at 31st Dec, 2013

financial forecasting

1-TAXRATE

DISCOUNTED BACK WITH 9%

Terminal value is last cashflow i.e 2018, will grow by 2% going forward till perpetuity, divide by (WACC
Terminal growth rate is assuming as a GDP growth forecast rate which is 2.3% as World bank given in

Net present value of the company

Debt includes current 2013 values of line of credit, current and long term lease obligations
The amount available to common share holders after lessing debt or THIS IS THE AMOUNT WHICH POT
Q1

Given in Balance sheet

Current 10 Year USA Treasury Rate

6% market risk premium assumed
Beta = 1 (assumed, as the risk of CS is equal to market risk)

Q2
Efective current interest rate
US corporate tax rate according to google

It is calculated by line of credit (loan) divided by (line of credit+equity)

 petuity, divide by (WACC-terminal growth rate)
% as World bank given in case study

se obligations
THE AMOUNT WHICH POTENTIAL BUYER WILL HAVE TO PAY IN ORDER TO ACQUIRE CS ACCORDING TO TAKEN ASSUMPTIONS
SSUMPTIONS
CashFlow Statement (USD) 2006 2007 2008 2009

Cashflow from Operating activities

Net income 263,659 (409,391) 419,319 94,467
Depreciation 6,407 8,074 9,179 29,975
Accounts receivable billed and unbilled (319,973) 69,124 (608,335) (734,135)
Prepaid expenses - - - (8,065)
Accrued interest receivable - - - (8,003)
Accounts payable 35,381 177,016 66,315 508,721
Other receivable - - - -
Current assets - - 137,743 -
Current liabilities - (19,931) 6,300 -
Accrued expenses 48,013 (4,650) 33,991 39,733
Deferred revenued - - - -
Increase in payroll withholdings - - - -
Short term loans - (1,145) (887) -
Net cash used in operating activities 33,487 (180,903) 63,625 (77,307)

Cash flows from investing activities

Purchase of property and equipment - - - (25,939)
Loans to stockholders - - - (79,414)
Fixed assets (15,492) (7,712) (25,696) -
Net cash used in investing activities (15,492) (7,712) (25,696) (105,353)

Cash flows from financing activities

Net proceeds from line of credit (71,726) 241,490 118,173 220,454
Repayment of capital lease obligations - - - (11,427)
Loss on disposal of assets 37,931 - - -
Net changes in stockholders equity 2,950 (5,300) (190,740) -
Net cash provided by financing acitivies (30,845) 236,190 (72,567) 209,027

Net CashFlow For the period (12,850) 47,575 (34,638) 26,367

Opening Cash Balance 1,413 40,915
Ending Cash Balance (33,225) 67,282

Actual 40,915 6,279

6,277 32,646
 2010 2011 2012 2013

(570,563) 725,118 191,144 (1,079,116)

36,490 42,724 47,440 57,463
(968,513) 132,624 1,242,235 129,699
2,232 (766) (1,994) (3,674)
(175) - - (38,749)
1,004,861 (328,629) (1,275,030) 440,982
1,403 40,000 - 5,569
- - -
- - - 40,378
35,184 52,284 (13,823) 4,213
310,204 (310,204) - 335,197
- - - 19,219
- - - (254,054)
(148,877) 353,151 189,972 (342,873)

(24,700) (46,439) (21,237) (77,343)

13,429 (9,980) (9,964) -
- - (60,000) -
(11,271) (56,419) (91,201) (77,343)

186,973 (73,038) (73,944) 187,205

(23,533) (17,254) (18,705) 74,900
- - - (5,475)
- (38,000) (42,256) -
163,440 (128,292) (134,905) 256,630

3,292 168,440 (36,134) (163,586)

6,279 32,646 35,938 204,378
9,571 201,086 (196) 40,792

32,646 35,938 204,378 168,244

35,938 204,378 168,244
CashFlow Statement (USD) 2007 2008 2009 2010

Operating Activities
-Net Income 302,065 (447,450) 557,033 60,931
-Depreciation 8,074 9,179 29,975 36,490
-Changes in Working Capital - 463,936 (245,812) (293,796)
Cashflow from operations 310,139 25,665 341,196 (196,375)

Investing Activities
-Purchase of PPE - (16,889) (46,492) (99,285)
-Other Assets - - - (8,003)
Cashflow from investing - (16,889) (46,492) (107,288)

Financing Activities
-Changes in debt - (2,032) (887) 55,406
Cashflow from financing - (2,032) (887) 55,406

Net Cash Flow 310,139 6,744 293,817 (248,257)

Opening Cash Balance 1,413 40,915 6,279
Ending Cash Balance 8,157 334,732 (241,978)

Actual 40,915 6,279 32,646

Working capital (26,482) (490,418) (244,606) 49,190

Changes in working capital 463,936 (245,812) (293,796)

PPE 33,670 42,485 79,798 149,108

Change (16,889) (46,492) (99,285)

Other Assets 5,228 5,228 5,228 13,231

Change - - (8,003)

Lease obligations (current+long) 2,919 887 - 55,406

Change (2,032) (887) 55,406
 2011 2012 2013

(570,563) 725,118 191,144

42,724 47,440 57,463
585,769 (505,887) (192,520)
57,930 266,671 56,087

(30,933) (65,997) (47,610)

(175) 8,178 -
(31,108) (57,819) (47,610)

(23,530) (2,412) (2,355)

(23,530) (2,412) (2,355)

3,292 206,440 6,122

32,646 35,938 204,378
35,938 242,378 210,500

35,938 204,378 168,244

(536,579) (30,692) 161,828

585,769 (505,887) (192,520)

143,551 166,824 166,994

(30,933) (65,997) (47,610)

13,406 5,228 5,228

(175) 8,178 -

31,876 29,464 27,109

(23,530) (2,412) (2,355)