Excel Corporation

Income Statements
For Years Ended December 31, Year 8 and Year 9

($ thousands) Year 8 Year 9

Sales 1,636,298 1,782,254

Cost of goods sold and operating expenses 1,473,293 1,598,679
Interest expense 21,825 20,843
Tax expense 52,237 58,584

Year 8 Year 9

Sales 1,636,298 1,782,254

Cost of goods sold and operating expenses 1,473,293 1,598,679

EBIT 163,005 183,575

Interest expense 21,825 20,843

EBT 141,180 162,732

Tax expense 52,237 58,584

NI 88,943 104,148

Effective Tax rate = (Tax)/EBT 37% 36%

NOPAT = EBIT(1-Tax rate) 102693 117487

 Excel Corporation
Balance Sheets
At December 31, Year 8 and Year 9

($ thousands) Year 8 Year 9

Assets
Cash 115,397 71,546
Marketable Securities 38,008 43,854
Accounts Receivable, net 177,538 182,859
Inventories 204,362 256,838
Total current assets 535,305 555,097

Investments in unconsolidated subsidiaries 33,728 62,390

Marketable securities 5,931 56,997
PPE, net 1,539,221 1,633,458
Goodwill 6,550 6,550
Total long-term assets 1,585,430 1,759,395
Total Assets 2,120,735 2,314,492
Total Average Assets 2,217,614
Liabilities
Notes payable 7,850 13,734
Accounts payable 138,662 155,482
Taxes payable 24,370 13,256
Current maturities of long-term debt 30,440 33,822
Total current liabilities 201,322 216,294

Long-term debt 507,329 473,507

Pension and OPEB liabilities 743,779 852,237

Total long-term liabilities 1,251,108 1,325,744

Equity
Common stock 413,783 413,783
Additional paid-in capital 19,208 19,208
Retained earnings 436,752 540,901
Treasury stock - 201,438 - 201,438
Total stockholders' equity 668,305 772,454
Total liabilities and equity 2,120,735 2,314,492
 OA Year 8 OA Year 9

Cash 115,397 71,546

Investment in consolidated 33,728 62,390
Accounts receivale 177,538 182,859
Inventories 204,362 256,838
PPE 1,539,221 1,633,458
Goodwill 6,550 6,550

TOTAL 2,076,796 2,213,641

Average 2145218.5

NOA = OA -OL 1,169,985 1,192,666

NOA

YEAR 8 1,169,985
YEAR 9 1,192,666

AVG NOA 1181325.5

Method 1 to calculate RNOA

current year NOAPT is used

RNOA = NOPAT/(AVG NOA)

NOPAT current year 9 117487

Avg RNOA 1181325.5

RNOA 9.95%

RNOA Interpretation: Returns on the basis of

operations. Against each 100 rupee in NOA(Net
opearting assets), the company is able to generate 0.995
rupees of return after taxation. Higher it is the better
RNOA Interpretation: Returns on the basis of
operations. Against each 100 rupee in NOA(Net
opearting assets), the company is able to generate 0.995
rupees of return after taxation. Higher it is the better

Method 1 to calculate ROCE

(Net Income - Preferred
Dividends)/Avg SE

Net income 104148

Preferred Income 0
Avg SE 720379.5

ROCE 14.46%

ROCE Interpretation: That’s the return you receive

from both operating and non operating activities.
Agaisnt each 100 rupees that you have invested in the
company, the company earn 14.46 as net income after
deducting preferred dividends.
 FA Year 8 FA Year 9

MKT Securities 38,008 43,854 Accounts Payable

MKT Securities 5,931 56,997 Taces Payable
Pensions and OPEP Liabilit

- 43,939 100,851 -
72395

NFO=FA-FL 501,680 420,212 SE

NFO SE

YEAR 8 501,680 YEAR 8

YEAR 9 420,212 YEAR 9

AVG NFO 460946

Method 2 to calculate RNOA

RNOA=(NOPAT Margin * AVG

NOA Turnover)

NOPAT Margins NOPAT/sales 6.5921%

AVG NOA Turnover Sales/AVG NOA 1.5086900265846

RNOA 9.95%

NOPAT Magins Interpretation: The company produces 6.59% of NOPAT

out of total sales. For each 1 ruppee of sales, the company geenrates 0.659
ruppees as NOPAT.
AVG NOA TURNOVER Interpretation: The company is able to generate
1.59 times more sakes on every ruppees invested in operations.

Method 2 to calculate ROCE

(Adj NI Profit margin)*(Asset
Turnover)*(Equity Multiplier)

Current Sales 1,782,254

Adjusted NI profit margin NI/Sales 5.84%
Total Asset Turnover Sales/Avg Assets 0.80368
Equity Multiplier Avg Assets/Avg SE 3.08

ROCE 14.46%

NI Magins Interpretation: Against every 100 ruppees the company

geenrates as sales, the firm is able to generate the 5.84% as net income. Rest
94.46% are expenses as expenses, interests, taxes, gains or losses etc.

Assets Turnover Interpretation: The company is able to generate 0.804

times more sales on every ruppees invested in Total Assets.

Equity Multiplier Interpretation: The company is generating 0.13 more

total assets out of 1 ruppee invested in common equity
 OL Year 8 OL Year 9

138,662 155,482
24,370 13,256
743,779 852,237

906,811 1,020,975
963893

668,305 772,454

668,305
772,454

720379.5

Method 3 to calculate RNOA

RNOA = (NOPAT/Sales)*(Sales/AVG OA)*(1-OLLEV)

NOPAT/Sales ==> NOPAT margin

Sales/AVG OA ==> OA Turnover
1+(AVG OL/AVG NOA) ==> OL Leverage Factor

RNOA

OA TURNOVER Interpretation: The company is able to generate 0.83 times more sakes on every rupee
invested in operatiing liabilities.
 OA TURNOVER Interpretation: The company is able to generate 0.83 times more sakes on every rupee
invested in operatiing liabilities.

OL Leverage ratio Interpretation: Positive figure indicates that they are managing their operating liabilities
well

Method 3 to calculate ROCE

Operating return + Leverage effect

Operating return + (Leverage*Spread)
Non operating return = Leverage effect

Leverage = Avg NFO/Avg SE 63.99%

Spread = RONA - NFR
NFR = Net Financial Return
NFR = (NFE)/Avg NFO

NFO = FL - FA

FL ==> Interest Bearing Liabilities

FA ==> Interest Bearing Aseets

NFE ==> (Interest paid on financial liabilities) -

Interest earned on FA

Interest paid 20,843

NFE = Interest paid (1 - Tax) 13,340

NFR = (NFE)/Avg NFO 2.89%

Spread = RONA - NFR 7.05%
Non Operating return = Leverage * Spread 4.51%
ROCE = Operating + Non operating return 14.46%

Operating return should be at least 84% of total ROCE

68.79% This should have been 84%

Equity Multiplier Interpretation: The company is generating 0.13 more total assets out of 1 ruppee invested
in common equity
 FL Year 8 FL Year 9 SE Year 8 SE Year 9

Notes Payable 7,850 13,734 Common stock 413,783 413,783

Current maturities of l 30,440 33,822 Additional paid-in capital 19,208 19,208
Long-term debt 507,329 473,507 Retained earnings 436,752 540,901
Treasury stock - 201,438 - 201,438

- 545,619 521,063 - 668,305 772,454

533341 720379.5

6.5921%
0.830803016103022
1.81594192286546

9.95%

mes more sakes on every rupee

mes more sakes on every rupee

aging their operating liabilities

Average NFO 460946

Average SE 720379.5
assets out of 1 ruppee invested
 CA LTA Equals

Inventory FA
A/R leasheld imp
MKT Securities Patents
Cash patent goodwill
Prepaid Expenses eqiupment
Short inv long term inv
Allowance for doubtful
debts Goodwill
Doubtful accounts Trade marks
Cash at bank copyrights
Short N/R Plant and equip
Accrued Revenues
Cash Equivalents
Deferred Taxes
Deferred Assets

Operating assets non operating assets

Non Financing assets financial assets

Cash N/R
Casj and cash equivalents MKT securities
A/R LT inv
Inventory Inv in discontinued operation
Prepaid expenses Stock inv
Deferred Tax Asset Short NR
accured rev lonf term investments
Plant and equipment
subsidiaries
copy rights
patents
goodwills

` FA

OA-OL =

(Net operating Assets)

NOA =
 CL LTL OE
Paid up capital Retained earnings
A/P LT Loans Common stocks beg re
Unearned revenue N/P LT preferred stocks ni
N/P Pensions premiums div
Income tax payable Bonds payable tresury stocks reserves
Accrued Exp dividend payable beg oe
DTL hybrid securities

interest payable
tax payable
debentures
warranties
post retirement benefits

non operating assets Operating liabilites

financial assets Non Fianncial libilties

N/R Accounts payable

MKT securities Accrued expenses
LT inv Pensions
Inv in discontinued operation warranties
Stock inv post rettirement benefits
Short NR Tax payable
lonf term investments

= OL FL

FL-FA PLUS SE
(Net Financial
obligations) (Stock holders equity)
NFO PLUS SE
Retained earnings

Non operating liabilites OE (excl. Pref stock dividends)

Financial liabilities Financial liabilities

Notes payable Paid up Capital RE

Current portion of LTL
Capital lease
Debentures
Hybrid securities
Bond Payable
Long Term loan
Dividend payable
Preferred stock dividends

srock holders equity

SE