002-The Sidwell Set- 21 days to organic growth

Day 2

The Sidwell Set is a 21 day plan that helps any business to grow organically using the LMR Octagon’s 9 principals.

Chat Gpt says growing a business organically means the following:
Growing a business organically refers to expanding through internal strategies rather than external methods like mergers or large advertising spends. It focuses on:

1. **Building a Loyal Customer Base**: Creating strong relationships with customers to encourage repeat business and referrals.
2. **Content Marketing**: Using valuable content to attract and retain customers through blogs, social media, or email.
3. **SEO**: Enhancing website visibility on search engines to draw more organic traffic.
4. **Social Media Engagement**: Growing an audience by interacting authentically on social platforms.
5. **Product/Service Improvement**: Continuously improving offerings to meet customer needs, leading to natural growth.
6. **Networking and Partnerships**: Developing relationships with other businesses and influencers for mutual support and exposure.

This approach tends to be slower but builds a solid, sustainable foundation.

The Sidwell Set by Lamar Sidwell Turns that on its head and gives you a step by step detailed plan to carry out your business growth.

1. Day TWO

[cash FLOW]

2. Why[cash FLOW]
Without cashflow you are out of business...
Casflow is the oxygen of your business...
You cannot make an airplane fly with no fuel...!

3. [cash FLOW] Goals
Know the key formulas for assesing money as well as where you can
get the money you need...
Identify types of funding avialable...
Learn how to float yourself before giving equity...

4. [cash FLOW] Challenges
Keeping the cash flowing without too much risk as we as
knowing the metrics and formulas of cashflow...
Knowing market fundementals which are key...
Identifying market cycles to reduce risk...

5. [cash FLOW] Steps
Memorize market fundementals, Market cycles and key formulas...
Use the 5 option strategies to reduce risk...
Fill in your worksheets and learn the formulas
to understand money...

6. What Does the Gross Margin Tell You?
The gross margin (also referred to as gross profit) represents
each dollar of revenue that the company retains after subtract -
ing COGS.
However, gross margin may also be referred to as gross profit
margin. For example, if a company's recent quarterly gross
profit margin is 35%, that means it retains $0.35 from each
dollar of revenue generated.
What Is Gross Margin?
Gross margin is net sales less the cost of goods sold (COGS). In
other words, it's the amount of money a company retains after
incurring the direct costs associated with producing the goods
it sells and the services it provides. The higher the gross
margin, the more capital a company retains, which it can then
use to pay other costs or satisfy debt obligations. The net
sales figure is gross revenue, less the returns, allowances, and
discounts.
Formula Sheet
1. Gross Margin % = 
2. Net Operating Margin% =
3. Operating Leverage =
4. Financial Leverage =
5. Total Leverage =
6. Debt to Equity =
7. Quick Ratio =
8. Current Ratio =
Sales - COGS
Sales
EBIT
Sales
Contribution
Fixed Costs
Total Liabilities
Total Equity
Current Assets
Current Liabilities
Liquid Assets 
*Liquid Assets = Current Assets - Inventory  Current Liabilities
Operating Leverage x Financial Leverage
Total Capital Employed (Debt+Equity)
Shareholder’s Equity

7. What is Net Operating MArgin?
The operating margin measures how much profit a company makes on
a dollar of sales after paying for variable costs of production,
such as wages and raw materials, but before paying interest or
tax. It is calculated by dividing a company’s operating income
by its net sales. Higher ratios are generally better, illustrat -
ing the company is efficient in its operations and is good at
turning sales into profits.
Understanding the Operating Margin
A company’s operating margin, sometimes referred to as return on
sales (ROS), is a good indicator of how well it is being managed
and how efficient it is at generating profits from sales. It
shows the proportion of revenues that are available to cover
non-operating costs, such as paying interest, which is why
investors and lenders pay close attention to it.
Highly variable operating margins are a prime indicator of
business risk. By the same token, looking at a company’s past
operating margins is a good way to gauge whether a company's
performance has been getting better. The operating margin can
improve through better management controls, more efficient use
of resources, improved pricing, and more effective marketing.
Formula Sheet
1. Gross Margin % = 
2. Net Operating Margin% =
3. Operating Leverage =
4. Financial Leverage =
5. Total Leverage =
6. Debt to Equity =
7. Quick Ratio =
8. Current Ratio =
Sales - COGS
Sales
EBIT
Sales
Contribution
Fixed Costs
Total Liabilities
Total Equity
Current Assets
Current Liabilities
Liquid Assets 
*Liquid Assets = Current Assets - Inventory  Current Liabilities
Operating Leverage x Financial Leverage
Total Capital Employed (Debt+Equity)
Shareholder’s Equity

8. What Is Operating Leverage?
Operating leverage is a cost-accounting formula that measures
the degree to which a firm or project can increase operating
income by increasing revenue. A business that generates sales
with a high gross margin and low variable costs has high
operating leverage.
Understanding Operating Leverage
The higher the degree of operating leverage, the greater the
potential danger from forecasting risk, in which a relatively
small error in forecasting sales can be magnified into large
errors in cash flow projections.
The operating leverage formula is used to calculate a company’s
break-even point and help set appropriate selling prices to
cover all costs and generate a profit. The formula can reveal
how well a company is using its fixed-cost items, such as its
warehouse and machinery and equipment, to generate profits. The
more profit a company can squeeze out of the same amount of
fixed assets, the higher its operating leverage.
Formula Sheet
1. Gross Margin % = 
2. Net Operating Margin% =
3. Operating Leverage =
4. Financial Leverage =
5. Total Leverage =
6. Debt to Equity =
7. Quick Ratio =
8. Current Ratio =
Sales - COGS
Sales
EBIT
Sales
Contribution
Fixed Costs
Total Liabilities
Total Equity
Current Assets
Current Liabilities
Liquid Assets 
*Liquid Assets = Current Assets - Inventory  Current Liabilities
Operating Leverage x Financial Leverage
Total Capital Employed (Debt+Equity)
Shareholder’s Equity

9. What Is a Leverage Ratio?
A leverage ratio is any one of several financial measurements
that look at how much capital comes in the form of debt (loans)
or assesses the ability of a company to meet its financial obli -
gations. The leverage ratio category is important because compa -
nies rely on a mixture of equity and debt to finance their op -
erations, and knowing the amount of debt held by a company is
useful in evaluating whether it can pay off its debts as they
come due.
What Does a Leverage Ratio Tell You?
Too much debt can be dangerous for a company and its investors.
However, if a company's operations can generate a higher rate of
return than the interest rate on its loans, then the debt may
help to fuel growth. Uncontrolled debt levels can lead to credit
downgrades or worse. On the other hand, too few debts can also
raise questions. A reluctance or inability to borrow may be a
sign that operating margins are tight.
Typically, a D/E ratio greater than 2.0 indicates a risky sce -
nario for an investor
Formula Sheet
1. Gross Margin % = 
2. Net Operating Margin% =
3. Operating Leverage =
4. Financial Leverage =
5. Total Leverage =
6. Debt to Equity =
7. Quick Ratio =
8. Current Ratio =
Sales - COGS
Sales
EBIT
Sales
Contribution
Fixed Costs
Total Liabilities
Total Equity
Current Assets
Current Liabilities
Liquid Assets 
*Liquid Assets = Current Assets - Inventory  Current Liabilities
Operating Leverage x Financial Leverage
Total Capital Employed (Debt+Equity)
Shareholder’s Equity

10. What Does the Total Leverage Tell You?
This ratio summarizes the effects of combining financial and op -
erating leverage, and what effect this combination, or varia -
tions of this combination, has on the corporation's earnings.
While not all corporations use both operating and financial lev -
erage, this formula can be used if they do.
A firm with a relatively high level of combined leverage is seen
as riskier than a firm with less combined leverage because high
leverage means more fixed costs to the firm.
Formula Sheet
1. Gross Margin % = 
2. Net Operating Margin% =
3. Operating Leverage =
4. Financial Leverage =
5. Total Leverage =
6. Debt to Equity =
7. Quick Ratio =
8. Current Ratio =
Sales - COGS
Sales
EBIT
Sales
Contribution
Fixed Costs
Total Liabilities
Total Equity
Current Assets
Current Liabilities
Liquid Assets 
*Liquid Assets = Current Assets - Inventory  Current Liabilities
Operating Leverage x Financial Leverage
Total Capital Employed (Debt+Equity)
Shareholder’s Equity

11. What Is the Debt-to-Equity (D/E) Ratio?
The debt-to-equity (D/E) ratio is used to evaluate a company's
financial leverage and is calculated by dividing a company’s
total liabilities by its shareholder equity. The D/E ratio is an
important metric used in corporate finance. It is a measure of
the degree to which a company is financing its operations
through debt versus wholly owned funds. More specifically, it
reflects the ability of shareholder equity to cover all
outstanding debts in the event of a business downturn. The
debt-to-equity ratio is a particular type of gearing ratio.
What Does the Debt-to-Equity (D/E) Ratio Tell You?
Given that the D/E ratio measures a company’s debt relative to
the value of its net assets, it is most often used to gauge the
extent to which a company is taking on debt as a means of lever -
aging its assets. A high D/E ratio is often associated with high
risk; it means that a company has been aggressive in financing
its growth with debt.
6. Debt to Equity =
Total Liabilities
Total Equity
Formula Sheet
1. Gross Margin % = 
2. Net Operating Margin% =
3. Operating Leverage =
4. Financial Leverage =
5. Total Leverage =
6. Debt to Equity =
7. Quick Ratio =
8. Current Ratio =
Sales - COGS
Sales
EBIT
Sales
Contribution
Fixed Costs
Total Liabilities
Total Equity
Current Assets
Current Liabilities
Liquid Assets 
*Liquid Assets = Current Assets - Inventory  Current Liabilities
Operating Leverage x Financial Leverage
Total Capital Employed (Debt+Equity)
Shareholder’s Equity

12. What Is the Quick Ratio?
The quick ratio is an indicator of a company’s short-term
liquidity position and measures a company’s ability to meet its
short-term obligations with its most liquid assets.
Since it indicates the company’s ability to instantly use its
near-cash assets (assets that can be converted quickly to cash)
to pay down its current liabilities, it is also called the acid
test ratio. An "acid test" is a slang term for a quick test
designed to produce instant results.
Understanding the Quick Ratio
The quick ratio measures the dollar amount of liquid assets
available against the dollar amount of current liabilities of a
company. Liquid assets are those current assets that can be
quickly converted into cash with minimal impact on the price
received in the open market, while current liabilities are a
company's debts or obligations that are due to be paid to
creditors within one year. A result of 1 is considered to be the
normal quick ratio. It indicates that the company is fully
equipped with exactly enough assets to be instantly liquidated
to pay off its current liabilities. A company that has a quick
ratio of less than 1 may not be able to fully pay off its
current liabilities in the short term, while a company having a
quick ratio higher than 1 can instantly get rid of its current
liabilities.
7. Quick Ratio =
Liquid Assets 
Current Liabilities
Formula Sheet
1. Gross Margin % = 
2. Net Operating Margin% =
3. Operating Leverage =
4. Financial Leverage =
5. Total Leverage =
6. Debt to Equity =
7. Quick Ratio =
8. Current Ratio =
Sales - COGS
Sales
EBIT
Sales
Contribution
Fixed Costs
Total Liabilities
Total Equity
Current Assets
Current Liabilities
Liquid Assets 
*Liquid Assets = Current Assets - Inventory  Current Liabilities
Operating Leverage x Financial Leverage
Total Capital Employed (Debt+Equity)
Shareholder’s Equity

13. What Is the Current Ratio?
The current ratio is a liquidity ratio that measures a company’s
ability to pay short-term obligations or those due within one
year. It tells investors and analysts how a company can maximize
the current assets on its balance sheet to satisfy its current
debt and other payables.
A current ratio that is in line with the industry average or
slightly higher is generally considered acceptable. A current
ratio that is lower than the industry average may indicate a
higher risk of distress or default. Similarly, if a company has
a very high current ratio compared with its peer group, it
indicates that management may not be using its assets
efficiently.
The current ratio is called current because, unlike some other
liquidity ratios, it incorporates all current assets and current
liabilities. The current ratio is sometimes called the working
capital ratio.
Understanding the Current Ratio
The current ratio measures a company’s ability to pay current,
or short-term, liabilities (debts and payables) with its
current, or short-term, assets, such as cash, inventory, and
receivables. In many cases, a company with a current ratio of
less than 1.00 does not have the capital on hand to meet its
short-term obligations if they were all due at once, while a
current ratio greater than 1.00 indicates the company has the
financial resources to remain solvent in the short term.
8. Current Ratio =
Current Assets
Current Liabilities
Formula Sheet
1. Gross Margin % = 
2. Net Operating Margin% =
3. Operating Leverage =
4. Financial Leverage =
5. Total Leverage =
6. Debt to Equity =
7. Quick Ratio =
8. Current Ratio =
Sales - COGS
Sales
EBIT
Sales
Contribution
Fixed Costs
Total Liabilities
Total Equity
Current Assets
Current Liabilities
Liquid Assets 
*Liquid Assets = Current Assets - Inventory  Current Liabilities
Operating Leverage x Financial Leverage
Total Capital Employed (Debt+Equity)
Shareholder’s Equity

14. What Is Return on Equity (ROE)?
Return on equity (ROE) is a measure of financial performance
calculated by dividing net income by shareholders' equity.
Because shareholders' equity is equal to a company’s assets
minus its debt, ROE is considered the return on net assets. ROE
is considered a gauge of a corporation's profitability and how
efficient it is in generating profits.
What Does Return on Equity Tell You?
Whether an ROE is deemed good or bad will depend on what is
normal among a stock’s peers. For example, utilities have many
assets and debt on the balance sheet compared to a relatively
small amount of net income. A normal ROE in the utility sector
could be 10% or less. A technology or retail firm with smaller
balance sheet accounts relative to net income may have normal
ROE levels of 18% or more.
A good rule of thumb is to target an ROE that is equal to or
just above the average for the company's sector—those in the
same business. For example, assume a company, TechCo, has
maintained a steady ROE of 18% over the past few years compared
to the average of its peers, which was 15%. An investor could
conclude that TechCo’s management is above average at using the
company’s assets to create profits.
Formula Sheet
9. Return on Equity  = 
10. Inventory Turnover Ratio =
11. Accounts Recievable 
       Turnover Ratio =
12. Accounts Payable Ratio =
13. Cash Conversion Cycle =
14. Payout Ratio =
15. Price/Earnings =
16. Price/Book Value =
17. Net Asset Value Per Share =      
      (NAVPS)
Net Income
Average Shareholder’s Equity
Sales
Inventory
COGS
Ave.Inventory
Net Recievable Sales
Average Account Recievables
Dividends Per Share
Earnings Per Share
Stock Price
Total Assets-Intangible Assets & Liabilities 
Market Value Per Share
*DIO= 365/Inventory Turnover Ratio
*DSO= 365/Recievable Turnover Ratio
*DPO= 365/Accounts Payable  Ratio
*Purchase= COGS+Ending Inventory-Starting Inventory 
Earnings Per Share
Net Assets
No. Shares Outstanding 
(DIO)+(DSO)-(DPO)
Total Purchse
Accounts Payable 
9. Return on Equity  = 
Net Income
Average Shareholder’s Equity

15. What Is Inventory Turnover?
Inventory turnover is a financial ratio showing how many times a
company has sold and replaced inventory during a given period. A
company can then divide the days in the period by the inventory
turnover formula to calculate the days it takes to sell the
inventory on hand.
Calculating inventory turnover can help businesses make better
decisions on pricing, manufacturing, marketing, and purchasing
new inventory.
What Inventory Turnover Can Tell You
Inventory turnover measures how fast a company sells inventory.
A low turnover implies weak sales and possibly excess inventory,
also known as overstocking. It may indicate a problem with the
goods being offered for sale or be a result of too little
marketing.
A high ratio, on the other hand, implies either strong sales or
insufficient inventory. The former is desirable while the latter
could lead to lost business.
Formula Sheet
9. Return on Equity  = 
10. Inventory Turnover Ratio =
11. Accounts Recievable 
       Turnover Ratio =
12. Accounts Payable Ratio =
13. Cash Conversion Cycle =
14. Payout Ratio =
15. Price/Earnings =
16. Price/Book Value =
17. Net Asset Value Per Share =      
      (NAVPS)
Net Income
Average Shareholder’s Equity
Sales
Inventory
COGS
Ave.Inventory
Net Recievable Sales
Average Account Recievables
Dividends Per Share
Earnings Per Share
Stock Price
Total Assets-Intangible Assets & Liabilities 
Market Value Per Share
*DIO= 365/Inventory Turnover Ratio
*DSO= 365/Recievable Turnover Ratio
*DPO= 365/Accounts Payable  Ratio
*Purchase= COGS+Ending Inventory-Starting Inventory 
Earnings Per Share
Net Assets
No. Shares Outstanding 
(DIO)+(DSO)-(DPO)
Total Purchse
Accounts Payable 
10. Inventory Turnover Ratio =
COGS
Ave.Inventory

16. What Is the Receivables Turnover Ratio?
The receivables turnover ratio is an accounting measure used to
quantify a company's effectiveness in collecting its accounts
receivable, or the money owed by customers or clients. This
ratio measures how well a company uses and manages the credit it
extends to customers and how quickly that short-term debt is
collected or is paid. A firm that is efficient at collecting on
its payments due will have a higher accounts receivable turnover
ratio.
What the Receivables Turnover Ratio Can Tell You
Companies that maintain accounts receivables are indirectly
extending interest-free loans to their clients since accounts
receivable is money owed without interest. If a company
generates a sale to a client, it could extend terms of 30 or 60
days, meaning the client has 30 to 60 days to pay for the
product.
The receivables turnover ratio measures the efficiency with
which a company collects on its receivables or the credit it
extends to customers. The ratio also measures how many times a
company's receivables are converted to cash in a period. The
receivables turnover ratio is calculated on an annual,
quarterly, or monthly basis.
Formula Sheet
9. Return on Equity  = 
10. Inventory Turnover Ratio =
11. Accounts Recievable 
       Turnover Ratio =
12. Accounts Payable Ratio =
13. Cash Conversion Cycle =
14. Payout Ratio =
15. Price/Earnings =
16. Price/Book Value =
17. Net Asset Value Per Share =      
      (NAVPS)
Net Income
Average Shareholder’s Equity
Sales
Inventory
COGS
Ave.Inventory
Net Recievable Sales
Average Account Recievables
Dividends Per Share
Earnings Per Share
Stock Price
Total Assets-Intangible Assets & Liabilities 
Market Value Per Share
*DIO= 365/Inventory Turnover Ratio
*DSO= 365/Recievable Turnover Ratio
*DPO= 365/Accounts Payable  Ratio
*Purchase= COGS+Ending Inventory-Starting Inventory 
Earnings Per Share
Net Assets
No. Shares Outstanding 
(DIO)+(DSO)-(DPO)
Total Purchse
Accounts Payable 
11. Accounts Recievable 
       Turnover Ratio =
Net Recievable Sales
Average Account Recievables

17. What Is the Accounts Payable Turnover Ratio?
The accounts payable turnover ratio is a short-term liquidity
measure used to quantify the rate at which a company pays off
its suppliers. Accounts payable turnover shows how many times a
company pays off its accounts payable during a period.
Accounts payable are short-term debt that a company owes to its
suppliers and creditors. The accounts payable turnover ratio
shows how efficient a company is at paying its suppliers and
short-term debts.
What the Accounts Payable Turnover Ratio Can Tell You
The accounts payable turnover ratio shows investors how many
times per period a company pays its accounts payable. In other
words, the ratio measures the speed at which a company pays its
suppliers. Accounts payable is listed on the balance sheet under
current liabilities. Investors can use the accounts payable
turnover ratio to determine if a company has enough cash or
revenue to meet its short-term obligations. Creditors can use
the ratio to measure whether to extend a line of credit to the
company.
A decreasing turnover ratio indicates that a company is taking
longer to pay off its suppliers than in previous periods. When
the turnover ratio is increasing, the company is paying off
suppliers at a faster rate than in previous periods
Formula Sheet
9. Return on Equity  = 
10. Inventory Turnover Ratio =
11. Accounts Recievable 
       Turnover Ratio =
12. Accounts Payable Ratio =
13. Cash Conversion Cycle =
14. Payout Ratio =
15. Price/Earnings =
16. Price/Book Value =
17. Net Asset Value Per Share =      
      (NAVPS)
Net Income
Average Shareholder’s Equity
Sales
Inventory
COGS
Ave.Inventory
Net Recievable Sales
Average Account Recievables
Dividends Per Share
Earnings Per Share
Stock Price
Total Assets-Intangible Assets & Liabilities 
Market Value Per Share
*DIO= 365/Inventory Turnover Ratio
*DSO= 365/Recievable Turnover Ratio
*DPO= 365/Accounts Payable  Ratio
*Purchase= COGS+Ending Inventory-Starting Inventory 
Earnings Per Share
Net Assets
No. Shares Outstanding 
(DIO)+(DSO)-(DPO)
Total Purchse
Accounts Payable 
12. Accounts Payable Ratio =
Total Purchse
Accounts Payable 

18. What Is the Cash Conversion Cycle (CCC)?
The cash conversion cycle (CCC) is one of several measures of
management effectiveness. It measures how fast a company can
convert cash on hand into even more cash on hand. The CCC does
this by following the cash, or the capital investment, as it is
first converted into inventory and accounts payable (AP),
through sales and accounts receivable (AR), and then back into
cash. Generally, the lower the number for the CCC, the better it
is for the company. Although it should be combined with other
metrics (such as return on equity (ROE) and return on assets
(ROA)), the CCC can be useful when comparing close competitors
because the company with the lowest CCC is often the one with
superior management. Here's how the CCC can help investors
evaluate potential investments.
Understanding the Cash Conversion Cycle (CCC)
The CCC is a combination of several activity ratios involving
accounts receivable, accounts payable, and inventory turnover.
AR and inventory are short-term assets while AP is a liability.
All of these ratios are found on the balance sheet. In essence,
the ratios indicate how efficiently management is using short -
term assets and liabilities to generate cash. This allows an in -
vestor to gauge the company's overall health.
DIO = Average inventory/COGS per day
DSO = Average AR / Revenue per day
DPO = Average AP/COGS per day
Formula Sheet
9. Return on Equity  = 
10. Inventory Turnover Ratio =
11. Accounts Recievable 
       Turnover Ratio =
12. Accounts Payable Ratio =
13. Cash Conversion Cycle =
14. Payout Ratio =
15. Price/Earnings =
16. Price/Book Value =
17. Net Asset Value Per Share =      
      (NAVPS)
Net Income
Average Shareholder’s Equity
Sales
Inventory
COGS
Ave.Inventory
Net Recievable Sales
Average Account Recievables
Dividends Per Share
Earnings Per Share
Stock Price
Total Assets-Intangible Assets & Liabilities 
Market Value Per Share
*DIO= 365/Inventory Turnover Ratio
*DSO= 365/Recievable Turnover Ratio
*DPO= 365/Accounts Payable  Ratio
*Purchase= COGS+Ending Inventory-Starting Inventory 
Earnings Per Share
Net Assets
No. Shares Outstanding 
(DIO)+(DSO)-(DPO)
Total Purchse
Accounts Payable 
13. Cash Conversion Cycle =(DIO)+(DSO)-(DPO)

19. What Is Payout Ratio?
The payout ratio is a financial metric showing the proportion of
earnings a company pays its shareholders in the form of
dividends, expressed as a percentage of the company's total
earnings. On some occasions, the payout ratio refers to the
dividends paid out as a percentage of a company's cash flow. The
payout ratio is also known as the dividend payout ratio.
Understanding the Payout Ratio
The payout ratio is a key financial metric used to determine the
sustainability of a company’s dividend payment program. It is
the amount of dividends paid to shareholders relative to the
total net income of a company.
For example, let's assume Company ABC has earnings per share of
$1 and pays dividends per share of $0.60. In this scenario, the
payout ratio would be 60% (0.6 / 1). Let's further assume that
Company XYZ has earnings per share of $2 and dividends per share
of $1.50. In this scenario, the payout ratio is 75% (1.5 / 2).
Comparatively speaking, Company ABC pays out a smaller
percentage of its earnings to shareholders as dividends, giving
it a more sustainable payout ratio than Company XYZ.
Formula Sheet
9. Return on Equity  = 
10. Inventory Turnover Ratio =
11. Accounts Recievable 
       Turnover Ratio =
12. Accounts Payable Ratio =
13. Cash Conversion Cycle =
14. Payout Ratio =
15. Price/Earnings =
16. Price/Book Value =
17. Net Asset Value Per Share =      
      (NAVPS)
Net Income
Average Shareholder’s Equity
Sales
Inventory
COGS
Ave.Inventory
Net Recievable Sales
Average Account Recievables
Dividends Per Share
Earnings Per Share
Stock Price
Total Assets-Intangible Assets & Liabilities 
Market Value Per Share
*DIO= 365/Inventory Turnover Ratio
*DSO= 365/Recievable Turnover Ratio
*DPO= 365/Accounts Payable  Ratio
*Purchase= COGS+Ending Inventory-Starting Inventory 
Earnings Per Share
Net Assets
No. Shares Outstanding 
(DIO)+(DSO)-(DPO)
Total Purchse
Accounts Payable 
14. Payout Ratio =
Dividends Per Share
Earnings Per Share

20. What Is the Price-to-Earnings (P/E) Ratio?
The price-to-earnings ratio (P/E ratio) is the ratio for valuing
a company that measures its current share price relative to its
earnings per share (EPS). The price-to-earnings ratio is also
sometimes known as the price multiple or the earnings multiple.
P/E ratios are used by investors and analysts to determine the
relative value of a company's shares in an apples-to-apples com -
parison. It can also be used to compare a company against its
own historical record or to compare aggregate markets against
one another or over time.
P/E may be estimated on a trailing (backward-looking) or forward
(projected) basis.
Understanding the P/E Ratio
The price-to-earnings ratio (P/E) is one of the most widely used
tools by which investors and analysts determine a stock's
relative valuation. The P/E ratio helps one determine whether a
stock is overvalued or undervalued. A company's P/E can also be
benchmarked against other stocks in the same industry or against
the broader market, such as the S&P 500 Index.
Formula Sheet
9. Return on Equity  = 
10. Inventory Turnover Ratio =
11. Accounts Recievable 
       Turnover Ratio =
12. Accounts Payable Ratio =
13. Cash Conversion Cycle =
14. Payout Ratio =
15. Price/Earnings =
16. Price/Book Value =
17. Net Asset Value Per Share =      
      (NAVPS)
Net Income
Average Shareholder’s Equity
Sales
Inventory
COGS
Ave.Inventory
Net Recievable Sales
Average Account Recievables
Dividends Per Share
Earnings Per Share
Stock Price
Total Assets-Intangible Assets & Liabilities 
Market Value Per Share
*DIO= 365/Inventory Turnover Ratio
*DSO= 365/Recievable Turnover Ratio
*DPO= 365/Accounts Payable  Ratio
*Purchase= COGS+Ending Inventory-Starting Inventory 
Earnings Per Share
Net Assets
No. Shares Outstanding 
(DIO)+(DSO)-(DPO)
Total Purchse
Accounts Payable 
15. Price/Earnings =
Market Value Per Share
Earnings Per Share

21. What Is the Price-To-Book (P/B) Ratio?
What price should investors pay for a company's equity shares?
If the goal is to unearth high-growth companies selling at low -
growth prices, the price-to-book ratio (P/B) offers investors an
effective approach to finding undervalued companies.
The P/B ratio can also help investors identify and avoid over -
valued companies. However, this ratio has its limitations and
there are circumstances where it may not be the most effective
metric for valuation.
How the Price-to-Book (P/B) Ratio Works
Price-to-book value (P/B) is the ratio of the market value of a
company's shares (share price) over its book value of equity.
The book value of equity, in turn, is the value of a company's
assets expressed on the balance sheet. The book value is defined
as the difference between the book value of assets and the book
value of liabilities.
A P/B ratio with lower values, particularly those below one,
could be a signal to investors that a stock may be undervalued.
In other words, the stock price is trading at a lower price
relative to the value of the company's assets.
A P/B ratio that's greater than one suggests that the stock
price is trading at a premium to the company's book value. For
example, if a company has a price-to-book value of three, it
means that its stock is trading at three times its book value.
As a result, the stock price could be overvalued relative to its
assets.
Formula Sheet
9. Return on Equity  = 
10. Inventory Turnover Ratio =
11. Accounts Recievable 
       Turnover Ratio =
12. Accounts Payable Ratio =
13. Cash Conversion Cycle =
14. Payout Ratio =
15. Price/Earnings =
16. Price/Book Value =
17. Net Asset Value Per Share =      
      (NAVPS)
Net Income
Average Shareholder’s Equity
Sales
Inventory
COGS
Ave.Inventory
Net Recievable Sales
Average Account Recievables
Dividends Per Share
Earnings Per Share
Stock Price
Total Assets-Intangible Assets & Liabilities 
Market Value Per Share
*DIO= 365/Inventory Turnover Ratio
*DSO= 365/Recievable Turnover Ratio
*DPO= 365/Accounts Payable  Ratio
*Purchase= COGS+Ending Inventory-Starting Inventory 
Earnings Per Share
Net Assets
No. Shares Outstanding 
(DIO)+(DSO)-(DPO)
Total Purchse
Accounts Payable 
16. Price/Book Value =
Stock Price
Total Assets-Intangible Assets & Liabilities 

22. What Is Net Asset Value Per Share – NAVPS?
Net asset value per share (NAVPS) is an expression for net asset
value that represents the value per share of a mutual fund, an
exchange-traded fund (ETF), or a closed-end fund. It is
calculated by dividing the total net asset value of the fund or
company by the number of shares outstanding and is also known as
book value per share.
What Does NAVPS Tell You?
The net asset value per share (NAVPS) is often used in relation
to open-end or mutual funds since shares of such funds
registered with the U.S. Securities and Exchange Commission
(SEC) are redeemed at their net asset value.
Referring to the formula for net asset value per share (NAVPS)
above, assets include the total market value of the fund's
investments, cash and cash equivalents, receivables, and accrued
income. Liabilities equal total short-term and long-term
liabilities, plus all accrued expenses, such as staff salaries,
utilities, and other operational expenses. The total number of
expenses may be large as management expenses, distribution and
marketing expenses, transfer agent fees, custodian, and audit
fees may all be included.
Formula Sheet
9. Return on Equity  = 
10. Inventory Turnover Ratio =
11. Accounts Recievable 
       Turnover Ratio =
12. Accounts Payable Ratio =
13. Cash Conversion Cycle =
14. Payout Ratio =
15. Price/Earnings =
16. Price/Book Value =
17. Net Asset Value Per Share =      
      (NAVPS)
Net Income
Average Shareholder’s Equity
Sales
Inventory
COGS
Ave.Inventory
Net Recievable Sales
Average Account Recievables
Dividends Per Share
Earnings Per Share
Stock Price
Total Assets-Intangible Assets & Liabilities 
Market Value Per Share
*DIO= 365/Inventory Turnover Ratio
*DSO= 365/Recievable Turnover Ratio
*DPO= 365/Accounts Payable  Ratio
*Purchase= COGS+Ending Inventory-Starting Inventory 
Earnings Per Share
Net Assets
No. Shares Outstanding 
(DIO)+(DSO)-(DPO)
Total Purchse
Accounts Payable 
17. Net Asset Value Per Share =      
      (NAVPS)
Net Assets
No. Shares Outstanding 

23. Formula Sheet
18. Net Current Asset Value  = 
       (NCAV)
19. Dividend Yield =
20. Price/Earning Growth (PEG) =
21. Enterprise Multiple =
22. EV/Sales =
23. EV/DACF=
24. EV/FCF =
25. EV/IC =
Current Assets-(Total Liabilities+prefered Stock)
(Current Assets Q1)-(Total Liabilities Q1)+(prefered Stock Q1)
(Shares Average Q1)
(Current Assets Q1)-(Total Liabilities Q1)+(prefered Stock Q1)
(Shares Average Q1)
Annual Dividends Per Share
Price Per Share
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Cashfow from Operations+Financing cost(after tax)
+exploration expenses (before tax) +/-Working Capital adjustment 
Enterprise Value
EBITDA
Free Cash Flow (trailing 4 quarters)
Annual Sales
Invested Capital 
P/E
Annual EPS Growth 
*Debt Adjusted Cash Flow
(oil exploration companies)
*Free Cash FLow
*Invested Capital
What Is Net Current Asset Value Per Share?
Net current asset value per share (NCAVPS) is a measure created
by Benjamin Graham as one means of gauging the attractiveness of
a stock. A key metric for value investors, NCAVPS is calculated
by taking a company's current assets and subtracting total
liabilities.
Graham considered preferred stock to be a liability, so these
are also subtracted. This is then divided by the number of
shares outstanding. NCAV is similar to working capital, but
instead of subtracting current liabilities from current assets,
total liabilities and preferred stock are subtracted.
Understanding Net Current Asset Value Per Share (NCAVPS)
Examining industrial companies, Graham noted that investors
typically ignore asset values and focus instead on earnings. But
Graham believed that by comparing the net current asset value
per share (NCAVPS) with the share price, investors could find
bargains. Essentially, net current asset value is a company's
liquidation value. A company's liquidation value is the total
worth of all its physical assets, such as fixtures, equipment,
inventory, and real estate. It excludes intangible assets, such
as intellectual property, brand recognition, and goodwill. If a
company were to go out of business and sell all its physical
assets, the value of these assets would be the company's
liquidation value. So a stock that is trading below NCAVPS is
allowing an investor to buy a company at less than the value of
its current assets. And as long as the company has reasonable
prospects, investors are likely to receive substantially more
than they pay for.

24. Formula Sheet
18. Net Current Asset Value  = 
       (NCAV)
19. Dividend Yield =
20. Price/Earning Growth (PEG) =
21. Enterprise Multiple =
22. EV/Sales =
23. EV/DACF=
24. EV/FCF =
25. EV/IC =
Current Assets-(Total Liabilities+prefered Stock)
(Current Assets Q1)-(Total Liabilities Q1)+(prefered Stock Q1)
(Shares Average Q1)
Annual Dividends Per Share
Price Per Share
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Cashfow from Operations+Financing cost(after tax)
+exploration expenses (before tax) +/-Working Capital adjustment 
Enterprise Value
EBITDA
Free Cash Flow (trailing 4 quarters)
Annual Sales
Invested Capital 
P/E
Annual EPS Growth 
*Debt Adjusted Cash Flow
(oil exploration companies)
*Free Cash FLow
*Invested Capital
What Is the Dividend Yield?
The dividend yield, expressed as a percentage, is a financial
ratio (dividend/price) that shows how much a company pays out in
dividends each year relative to its stock price.
The reciprocal of the dividend yield is the price/dividend
ratio.
Understanding the Dividend Yield
The dividend yield is an estimate of the dividend-only return of
a stock investment. Assuming the dividend is not raised or
lowered, the yield will rise when the price of the stock falls.
And conversely, it will fall when the price of the stock rises.
Because dividend yields change relative to the stock price, it
can often look unusually high for stocks that are falling in
value quickly. New companies that are relatively small, but
still growing quickly, may pay a lower average dividend than
mature companies in the same sectors. In general, mature
companies that aren't growing very quickly pay the highest
dividend yields. Consumer non-cyclical stocks that market staple
items or utilities are examples of entire sectors that pay the
highest average yield.
Annual Dividends Per Share
Price Per Share

25. Formula Sheet
18. Net Current Asset Value  = 
       (NCAV)
19. Dividend Yield =
20. Price/Earning Growth (PEG) =
21. Enterprise Multiple =
22. EV/Sales =
23. EV/DACF=
24. EV/FCF =
25. EV/IC =
Current Assets-(Total Liabilities+prefered Stock)
(Current Assets Q1)-(Total Liabilities Q1)+(prefered Stock Q1)
(Shares Average Q1)
Annual Dividends Per Share
Price Per Share
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Cashfow from Operations+Financing cost(after tax)
+exploration expenses (before tax) +/-Working Capital adjustment 
Enterprise Value
EBITDA
Free Cash Flow (trailing 4 quarters)
Annual Sales
Invested Capital 
P/E
Annual EPS Growth 
*Debt Adjusted Cash Flow
(oil exploration companies)
*Free Cash FLow
*Invested Capital

26. Formula Sheet
18. Net Current Asset Value  = 
       (NCAV)
19. Dividend Yield =
20. Price/Earning Growth (PEG) =
21. Enterprise Multiple =
22. EV/Sales =
23. EV/DACF=
24. EV/FCF =
25. EV/IC =
Current Assets-(Total Liabilities+prefered Stock)
(Current Assets Q1)-(Total Liabilities Q1)+(prefered Stock Q1)
(Shares Average Q1)
Annual Dividends Per Share
Price Per Share
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Cashfow from Operations+Financing cost(after tax)
+exploration expenses (before tax) +/-Working Capital adjustment 
Enterprise Value
EBITDA
Free Cash Flow (trailing 4 quarters)
Annual Sales
Invested Capital 
P/E
Annual EPS Growth 
*Debt Adjusted Cash Flow
(oil exploration companies)
*Free Cash FLow
*Invested Capital

27. Formula Sheet
18. Net Current Asset Value  = 
       (NCAV)
19. Dividend Yield =
20. Price/Earning Growth (PEG) =
21. Enterprise Multiple =
22. EV/Sales =
23. EV/DACF=
24. EV/FCF =
25. EV/IC =
Current Assets-(Total Liabilities+prefered Stock)
(Current Assets Q1)-(Total Liabilities Q1)+(prefered Stock Q1)
(Shares Average Q1)
Annual Dividends Per Share
Price Per Share
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Cashfow from Operations+Financing cost(after tax)
+exploration expenses (before tax) +/-Working Capital adjustment 
Enterprise Value
EBITDA
Free Cash Flow (trailing 4 quarters)
Annual Sales
Invested Capital 
P/E
Annual EPS Growth 
*Debt Adjusted Cash Flow
(oil exploration companies)
*Free Cash FLow
*Invested Capital

28. Formula Sheet
18. Net Current Asset Value  = 
       (NCAV)
19. Dividend Yield =
20. Price/Earning Growth (PEG) =
21. Enterprise Multiple =
22. EV/Sales =
23. EV/DACF=
24. EV/FCF =
25. EV/IC =
Current Assets-(Total Liabilities+prefered Stock)
(Current Assets Q1)-(Total Liabilities Q1)+(prefered Stock Q1)
(Shares Average Q1)
Annual Dividends Per Share
Price Per Share
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Cashfow from Operations+Financing cost(after tax)
+exploration expenses (before tax) +/-Working Capital adjustment 
Enterprise Value
EBITDA
Free Cash Flow (trailing 4 quarters)
Annual Sales
Invested Capital 
P/E
Annual EPS Growth 
*Debt Adjusted Cash Flow
(oil exploration companies)
*Free Cash FLow
*Invested Capital

29. Formula Sheet
18. Net Current Asset Value  = 
       (NCAV)
19. Dividend Yield =
20. Price/Earning Growth (PEG) =
21. Enterprise Multiple =
22. EV/Sales =
23. EV/DACF=
24. EV/FCF =
25. EV/IC =
Current Assets-(Total Liabilities+prefered Stock)
(Current Assets Q1)-(Total Liabilities Q1)+(prefered Stock Q1)
(Shares Average Q1)
Annual Dividends Per Share
Price Per Share
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Cashfow from Operations+Financing cost(after tax)
+exploration expenses (before tax) +/-Working Capital adjustment 
Enterprise Value
EBITDA
Free Cash Flow (trailing 4 quarters)
Annual Sales
Invested Capital 
P/E
Annual EPS Growth 
*Debt Adjusted Cash Flow
(oil exploration companies)
*Free Cash FLow
*Invested Capital

30. Formula Sheet
18. Net Current Asset Value  = 
       (NCAV)
19. Dividend Yield =
20. Price/Earning Growth (PEG) =
21. Enterprise Multiple =
22. EV/Sales =
23. EV/DACF=
24. EV/FCF =
25. EV/IC =
Current Assets-(Total Liabilities+prefered Stock)
(Current Assets Q1)-(Total Liabilities Q1)+(prefered Stock Q1)
(Shares Average Q1)
Annual Dividends Per Share
Price Per Share
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Market Cap+Debt+Prefered Stock-Cash & Cash Eq.
Cashfow from Operations+Financing cost(after tax)
+exploration expenses (before tax) +/-Working Capital adjustment 
Enterprise Value
EBITDA
Free Cash Flow (trailing 4 quarters)
Annual Sales
Invested Capital 
P/E
Annual EPS Growth 
*Debt Adjusted Cash Flow
(oil exploration companies)
*Free Cash FLow
*Invested Capital

31. Formula Sheet
Book Value 
Outstanding Shares 
Share Price - Subscription Price 
The No. of Rights required to purchase one share + 1 
26. Defensive Interval =
27. DCF  = 
       (Dicounted Cash Flow)
28. Sharpe Ratio =
29. CAPM =
29. BV Book Value 
30. BV/Share
31. Cumulative Rights
CF
1
365 x
+
+=
-
+
1
(1+r)
(cash + marketable securities + accounts receivable)
projected expenditures
rp
ra
Tangable Assets - Liabilities 
rp
rf
rfBa
Ba
rf
p
CF2
2
(1+r)
(rm-rf)
CFn
n
(1+r)
p
= Expected Portfolio Return 
Projected expenditures=projected outfow needed to operate the company 
*Capital Asset Pricing Model
= Risk Free Rate  
rm
rf
= Expected Market Return 
= Risk Free Rate  
= Beta of Security  
= Portfolio Standard Deviation

32. Formula Sheet
Book Value 
Outstanding Shares 
Share Price - Subscription Price 
The No. of Rights required to purchase one share + 1 
26. Defensive Interval =
27. DCF  = 
       (Dicounted Cash Flow)
28. Sharpe Ratio =
29. CAPM =
29. BV Book Value 
30. BV/Share
31. Cumulative Rights
CF
1
365 x
+
+=
-
+
1
(1+r)
(cash + marketable securities + accounts receivable)
projected expenditures
rp
ra
Tangable Assets - Liabilities 
rp
rf
rfBa
Ba
rf
p
CF2
2
(1+r)
(rm-rf)
CFn
n
(1+r)
p
= Expected Portfolio Return 
Projected expenditures=projected outfow needed to operate the company 
*Capital Asset Pricing Model
= Risk Free Rate  
rm
rf
= Expected Market Return 
= Risk Free Rate  
= Beta of Security  
= Portfolio Standard Deviation

33. Formula Sheet
Book Value 
Outstanding Shares 
Share Price - Subscription Price 
The No. of Rights required to purchase one share + 1 
26. Defensive Interval =
27. DCF  = 
       (Dicounted Cash Flow)
28. Sharpe Ratio =
29. CAPM =
29. BV Book Value 
30. BV/Share
31. Cumulative Rights
CF
1
365 x
+
+=
-
+
1
(1+r)
(cash + marketable securities + accounts receivable)
projected expenditures
rp
ra
Tangable Assets - Liabilities 
rp
rf
rfBa
Ba
rf
p
CF2
2
(1+r)
(rm-rf)
CFn
n
(1+r)
p
= Expected Portfolio Return 
Projected expenditures=projected outfow needed to operate the company 
*Capital Asset Pricing Model
= Risk Free Rate  
rm
rf
= Expected Market Return 
= Risk Free Rate  
= Beta of Security  
= Portfolio Standard Deviation

34. Formula Sheet
Book Value 
Outstanding Shares 
Share Price - Subscription Price 
The No. of Rights required to purchase one share + 1 
26. Defensive Interval =
27. DCF  = 
       (Dicounted Cash Flow)
28. Sharpe Ratio =
29. CAPM =
29. BV Book Value 
30. BV/Share
31. Cumulative Rights
CF
1
365 x
+
+=
-
+
1
(1+r)
(cash + marketable securities + accounts receivable)
projected expenditures
rp
ra
Tangable Assets - Liabilities 
rp
rf
rfBa
Ba
rf
p
CF2
2
(1+r)
(rm-rf)
CFn
n
(1+r)
p
= Expected Portfolio Return 
Projected expenditures=projected outfow needed to operate the company 
*Capital Asset Pricing Model
= Risk Free Rate  
rm
rf
= Expected Market Return 
= Risk Free Rate  
= Beta of Security  
= Portfolio Standard Deviation

35. Formula Sheet
Book Value 
Outstanding Shares 
Share Price - Subscription Price 
The No. of Rights required to purchase one share + 1 
26. Defensive Interval =
27. DCF  = 
       (Dicounted Cash Flow)
28. Sharpe Ratio =
29. CAPM =
29. BV Book Value 
30. BV/Share
31. Cumulative Rights
CF
1
365 x
+
+=
-
+
1
(1+r)
(cash + marketable securities + accounts receivable)
projected expenditures
rp
ra
Tangable Assets - Liabilities 
rp
rf
rfBa
Ba
rf
p
CF2
2
(1+r)
(rm-rf)
CFn
n
(1+r)
p
= Expected Portfolio Return 
Projected expenditures=projected outfow needed to operate the company 
*Capital Asset Pricing Model
= Risk Free Rate  
rm
rf
= Expected Market Return 
= Risk Free Rate  
= Beta of Security  
= Portfolio Standard Deviation

36. Formula Sheet
Book Value 
Outstanding Shares 
Share Price - Subscription Price 
The No. of Rights required to purchase one share + 1 
26. Defensive Interval =
27. DCF  = 
       (Dicounted Cash Flow)
28. Sharpe Ratio =
29. CAPM =
29. BV Book Value 
30. BV/Share
31. Cumulative Rights
CF
1
365 x
+
+=
-
+
1
(1+r)
(cash + marketable securities + accounts receivable)
projected expenditures
rp
ra
Tangable Assets - Liabilities 
rp
rf
rfBa
Ba
rf
p
CF2
2
(1+r)
(rm-rf)
CFn
n
(1+r)
p
= Expected Portfolio Return 
Projected expenditures=projected outfow needed to operate the company 
*Capital Asset Pricing Model
= Risk Free Rate  
rm
rf
= Expected Market Return 
= Risk Free Rate  
= Beta of Security  
= Portfolio Standard Deviation

37. Formula Sheet
Book Value 
Outstanding Shares 
Share Price - Subscription Price 
The No. of Rights required to purchase one share + 1 
26. Defensive Interval =
27. DCF  = 
       (Dicounted Cash Flow)
28. Sharpe Ratio =
29. CAPM =
29. BV Book Value 
30. BV/Share
31. Cumulative Rights
CF
1
365 x
+
+=
-
+
1
(1+r)
(cash + marketable securities + accounts receivable)
projected expenditures
rp
ra
Tangable Assets - Liabilities 
rp
rf
rfBa
Ba
rf
p
CF2
2
(1+r)
(rm-rf)
CFn
n
(1+r)
p
= Expected Portfolio Return 
Projected expenditures=projected outfow needed to operate the company 
*Capital Asset Pricing Model
= Risk Free Rate  
rm
rf
= Expected Market Return 
= Risk Free Rate  
= Beta of Security  
= Portfolio Standard Deviation

38. Company
Company Number Telephone Type of Activity
Date Adm. Time
File NoWebsite Email
Preoperative Assessment -2
Date: / / 2 Consultant’s Name & Stamp Signature
Income Expenses
Assets Liabilities
Company
Company Number Telephone Type of Activity
Date Adm. Time
File NoWebsite Email
Preoperative Assessment -2
Date: / / 2 Consultant’s Name & Stamp Signature
Income Expenses
Assets Liabilities

39. Revenues
Operating Costs
Gross Profit
Fixed Costs
Variable Costs
Profit Before Tax (EBIT)
Profit After Tax
Non-currnet Assets
Current Assets
Total Assets
Non-current Liabilities
Current Liabilities
Total Liabilities
Total Equity
Inventories
Accounts recievables
Accounts payables
Net cash from operating activities
Cash on cash equivalents beginning yr
Cash on cash equivalents end yr
Rating Procedure Consultant
yr1 yr2 yr3 yr4
Preoperative Assessment -2
Notes
Date: / / 2 Accountant’s Name & Stamp Signature
Revenues Operating Costs
Gross Profit
Fixed Costs
Variable Costs
Profit Before Tax (EBIT)
Profit After Tax
Non-currnet Assets
Current Assets
Total Assets
Non-current Liabilities
Current Liabilities
Total Liabilities
Total Equity
Inventories
Accounts recievables
Accounts payables
Net cash from operating activities
Cash on cash equivalents beginning yr
Cash on cash equivalents end yr
Rating Procedure Consultant
yr1 yr2 yr3 yr4
Preoperative Assessment -2
Notes
Date: / / 2 Accountant’s Name & Stamp Signature

40. Rating Procedure Consultant
Preoperative Assessment -2
Operating Leverage
Financial Leverage
Total Leverage
Debt to Equity Ratio
Quick Ratio
Current Ratio
Liability to Asset Ratio
Return on Equity Ratio
Inventory Turnover Ratio
Recievable Turnover Ratio
Accounts Payable Turnover Ratio
Cash Conversion Cycle
Asset Turnover Ratio
Payout Ratio
DCF
Sharpe Ratio
CAPM
Black Scholes
Date: / / 2 Accountant’s Name & Stamp Signature
Rating Procedure Consultant
Preoperative Assessment -2
Operating Leverage
Financial Leverage
Total Leverage
Debt to Equity Ratio
Quick Ratio
Current Ratio
Liability to Asset Ratio
Return on Equity Ratio
Inventory Turnover Ratio
Recievable Turnover Ratio
Accounts Payable Turnover Ratio
Cash Conversion Cycle
Asset Turnover Ratio
Payout Ratio
DCF
Sharpe Ratio
CAPM
Black Scholes
Date: / / 2 Accountant’s Name & Stamp Signature

41. Preoperative Assessment -2
Notes
Date: / / 2 Consultant’s Name & Stamp Signature
Rating
Strengths Weakness
Oppourtunities Threats
Procedure Consultant
Discharge the Company Keep the Company untill Final
Report
Preoperative Assessment -2
Notes
Date: / / 2 Consultant’s Name & Stamp Signature
Rating
Strengths Weakness
Oppourtunities Threats
Procedure Consultant
Discharge the Company Keep the Company untill Final Report

42. Cost of Revenue
Salaries
Rent
Inventory
Electricity
Water
Internet
Phone
Software
BUSINESS
Net Income/Earnings
Income Before Tax
Tax___%
OWNER
Asking For $____________
P/E=_____________=_____ P/E=25 Return=4%
P/E=20 Return=5%
P/E=15 Return=6.6%
P/E=10 Return=10%
P/E=5 Return=20%
P/BV=5 Safety=20%
P/BV=3 Safety=33%
P/BV=2 Safety=50%
P/BV=1.5 Safety=67%
P/BV=1 Safety=100%
P/BV=0.7 Safety=143%
P/BV=_____________=_____
Return=_____________=_____
Shares ____________ Shares Out. ____________
Total Revenue
Customers/
MARKET VALUE EARNINGS BOOK VALUE
business digram
WORKSHEET

43. Cost of Revenue
Salaries
Rent
Inventory
Electricity
Water
Internet
Phone
Software
BUSINESS
Net Income/Earnings
Income Before Tax
Tax___%
OWNER
Asking For $____________
P/E=_____________=_____ P/E=25 Return=4%
P/E=20 Return=5%
P/E=15 Return=6.6%
P/E=10 Return=10%
P/E=5 Return=20%
P/BV=5 Safety=20%
P/BV=3 Safety=33%
P/BV=2 Safety=50%
P/BV=1.5 Safety=67%
P/BV=1 Safety=100%
P/BV=0.7 Safety=143%
P/BV=_____________=_____
Return=_____________=_____
Shares ____________ Shares Out. ____________
Total Revenue
Customers/
MARKET VALUE EARNINGS BOOK VALUE
business digram
WORKSHEET
$20,000$20,00033
$30,000
$10,000
$100,000
$100,000
$10
$10/$2
$2/$10
$10/$0.7 14.3
5
20%
$2 $0.7
35% margin of safteyx$2$20,000/10,000$100,000/10,000
P/BV_ Evey $14.3 paid for this company
has $1 in book value (of equity)
10,000
$10,000
$70,000
$10,000
$2,000
$1,000
$10,000
$2,000
$15,000

44. RULE OF THUMB
If P/E x P/BV is less than 22.5 then this is a
company you would look at.
Look at Companies with:
P/E = 15 =6.6% return
P/E = 10 = 10% return
P/E = 5 = 20% return
P/BV = 1.5 = 67% safety
P/BV = 1 = 100% safety
P/BV = 0.7 = 143% safety

45. Tax Treatment Calculator
Employee
Income
Tax
Expenses
Savings
Income
Tax
Savings
Expenses
Income
Income
Debt
Savings
Expenses
Investments
Subcontractor Business Investor
Investments
Investments
40% 20% 20% 0%

46. Cost of Revenue
Maintenance
Property Mang.
Commisions
Closing Costs
Laywer
Debt
Principle
Interest
Net Income/Earnings
Income Before Tax
Tax___%
OWNER
Total Revenue
Rent/
realestate diagram
WORKSHEET

47. Cost of Revenue
Maintenance
Property Mang.
Commisions
Closing Costs
Laywer
Debt
Principle
Interest
Net Income/Earnings
Income Before Tax
Tax___%
OWNER
Total Revenue
Rent/
business digram
WORKSHEET

48. More than 100 years ago, economist Henry George was the first to observe
that real estate markets move in cycles. He dissected these into four
phases:
1. Recovery
2. Expansion
3. Hypersupply
4. Recession
Phase 1: Recovery
Depending on how you perceive things, phase one could be the first or last
of the phases. This occurs when unemployment is at an all-time high, new
apartment construction stops, and demand for real estate decreases heavily
due to fear.
This phase will occur in the next four years in the UK (2024). However, this
also occurred in 1992-1998 and 2011-2013. This was when prices were in
recovery. Phase 1 is buying time, which may last for years. Properties are
sold and rented, and developers buy up big pieces of land to ride the cycle.
Phase 2: Expansion
In this phase, the economy will feel like it’s back to normal. New
construction will be built, unemployment starts to decline, occupancy of
rental property increases, and people are much more optimistic.
Immigration starts to rise due to new opportunities available, and the
credit environment is optimistic; therefore, banks begin to lend for real
estate purchases with good loan-to-value percentages. As an investor, this
phase and the third phase is when you should get out of your investment by
selling and waiting for the cycle to return to phase 1 again.
[cash FLOW] Market Cycles

49. Phase 3 : Hypersupply
This is when you jump in a taxi, and the taxi driver starts talking about
the real estate or stock market. This is when you know if you did not get
out in phase 2. You definitely need to reduce your prices and leave meat on
the bone for another investor to take on your risk. Here, construction
starts picking up, and supply will topple demand. If you are not out of your
property portfolio when this happens, then you can sell a put option to
generate cashflow for the period of the recession bound to come after the
hypersupply. Put options are not widely used in small property portfolios
but are in large ones. How does supply overshoot demand? Developing is a
business, and most developers do not retain builders on a salary basis, so
they are always looking to build something so they do not lose their
builders to other developers. Once you work with good builders, you do not
want them to go to your competitors. Plus, if the bank lends money for
construction, then the developer will continue building until the banks have
all their money out of their vaults. Note: However, banks prefer lending
money for already occupied buildings rather than construction due to the
inherent risk involved.
Phase 4: Recession
An overvalued real-estate market where everybody has participated, even the
receptionist at a law firm, will inevitably cause a market recession.
However, it is not predominately high prices but debt markets that are
responsible for recessions. As the property market heats up, mortgage
brokers are keen on offering loans to anyone who wants to buy a home because
that is how they earn their bread and butter. Human psychology is wired to
negativity for the mind to protect the body. We cannot help it; it is how we
are made. According to psychologists, it is not possible to have a prolonged
positive state of mind and think that the economy will stay the way it is.
This means that as people move into a negative state of mind and all those
people who took out mortgages they could not afford stop making repayments,
a recession starts. To assess this, look at a chart called “percentage of
income required by households to service mortgage debt” in any country in
which you are investing. If the chart you are looking at is above the 50%
mark, a recession is inevitable unless amortization periods are extended and
interest rates decline.

50. [cash FLOW] Market Relationships
1. Oil
Declining oil prices =
• Lower inflation
• Lower commodity prices, including metals
• Expectations for greater consumer spending and
• consumer discretionary stocks
• Rising dollar
Note: However, a longer-term decline reverses all
the above

51. [cash FLOW] Market Relationships
2. Dollar
Rising Dollar =
• Lower euro
• Lower gold and silver
• Less liquidity creation
• Lower emerging market stocks
• Eventually bearish for U.S stocks as emerging
countries’ economies implode

52. [cash FLOW] Market Relationships
3. Trade Deficit
As the US economy slows down, the trade deficit
will decline =
• The dollar rises
• Commodity prices decline
• Lower inflation expectations
• Lower long-term interest rates
• Finally, a severe recession

53. [cash FLOW] Market Relationships
4. Employment
•More jobs mean fewer people look for work, which
means it’s harder to find good people to fill
these jobs. This raises wages so businesses can
hire, and inflation increases.
•The higher the inflation, the lower the
unemployment rate.
•The lower the inflation, the higher the
unemployment rate.

54. [cash FLOW] Capital Raising
1) Bootstrapping your startup business
2) Crowdfunding As A Funding Option
3) Get Angel Investment In Your Startup
4) Get Venture Capital For Your Business
5) Get Funding From Business Incubators & Accelerators
6) Raise Funds By Winning Contests
7) Raise Money Through Bank Loans
8) Get Business Loans From Microfinance Providers
9) Govt Programs That Offer Startup Capital
10)Credit Cards
11)Family and friends

55. [cash FLOW] Capital Raising
1) Traction
2) Team
3) Social Proof
4) Wallet Share/Market*
5) Product
* Eg. Say you want to open a clothing store in your area in
which customers buy $1 million worth of merchandise a year.
You’re up against 10 competitors. Since the top 3 companies
in most categories usually get 80% of thoes revenues. You
will fight the next 7 companies for the remaining $200,000.
Is that really worth it? And can you ever make a profit?
Focus on wallet share, not market share. Think about how
you can retain your customer for repeat business so you can
get an exponential return on your initial advertising or
marketing investment.

56. CUSTOMER PRODUCT
MARKET PERSONNEL
WANT NEED Hard Easy
Many Few Low KnowledgeCompetition High

57. CUSTOMER PRODUCT
MARKET PERSONNEL
WANT NEED Hard Easy
Many Few Low KnowledgeCompetition High

58. [cash FLOW] Capital Raising
Targeted Business Plan
Services Business:
- Prices
-Methods used to set prices
-System of production management
-Quality control procedure
-Standard or acccepted industry quality standard
-How is labour porductivity measured
-What percentage of total avialable hours are actually
billable to customer?
-Break even billable hours
-Percent of work subcontracted to other firms
- Profit on subcantracting
-Credit, payment, and collection’s policies and procedures
- Strategy for keeping client database
-Strategy for attracting new clients

59. Retail Business:
- Comapny Image
- Pricing (i) explain mark up policy
(ii) Price should be profitable, competitive
and in accord with the company image
-Calculate annual inventory turnover rate and compare to
industry average for your type of store
- Location: does it give the exposure you need? Is it
convienent for the customer? Is it consistent with the
company image?
- Promotion: methods used and cost. Does it project a
consistent company image?
- Credit: Do you extend credit to customers? If yes, fo you
really need to? and do you factor the cost into the
prices?

60. Manufacturing Business:
- Present production levels
- Present levels of direct production cost and indirect
(overhead) costs
-Gross profit margin, overall and for each product line
-Possible production efficiency increases
-Production/Capacity limits of existing physical plant
-Production of expanded plant (if expansion is planned)
-Production/capacity limits of existing equipment
-Production of new equipement (if new expansion is planned)
-Prices per product line
-Purchasing and inventory management procedures
-Anticipating modifications or improvements to existing
products
-New products underdevelopment or anticipated

61. Investor Presentation:
- Funds needed shoet term
- funds in 2 to 5 years
- How company will use funds, and what this will accomplish
for growth
- Estimated return on investment
- Exist strategy for investors (Buy back, sale, ipo)
- Percent of ownership you will give up to investors
- Milestones or conditions you will accept
- Financial reporting to be provided
- Involvement of investors on board or in management
- Cost of customer acquisition

62. 20 Steps to Real Estate Syndication
1-Research and find rental property in a particular
neighborhood and choose one to purchase
2-Prepare a preliminary analysis of the investment. This
would include its operating history, status of title,
proximity to any environmental or natural hazards, the
neighborhood, the local and national economies, and finally
the physical condition of the property
3. Tie up the property and get control of it in your name
with the ability to assign it to a successor entity (The
new syndicate group Investment LLC entity) through a
purchase contract or option
4.Open escrow with your name as the purchaser, not that of
the entity! You’ll assign your purchase rights to the
entity before you close
[cash FLOW] Capital Raising

63. 5- Conduct due dillegence. Perform a Quality of earnings
report as well as legal due dilligence in terms of title
6- Apply for new debt or assume existing debt
7- Review your plans for forming and operating your owner -
ship entity with you accountants and lawyers
8-Prepare the investment circular (PPM, Private Placement
Memorandum) under either rule 506 (b) or 506 (c) or through
a regulation A+ offering. You should have a subscription
agreement, articles of organization and operating agreement
for the LLC, pertinent exhibits and Addenda. The syndicator
(you) is named as the Manager of the LLC in these documents
if you did not find someone to be Manager instead
9-Market the Investment Circular to potential investors to
fund your purchase, through the LLC

64. 10- Pool together the investors. Once you have approved the
investor’s suitability you need to get their signitures on
the Subscription Agreement and the Operating Agreement of
the LLC. You’ll also want to deliver their funds to escrow
for the close
11-When the LLC is completely funded, the Syndicator needs
to complete the property purchase. If necessary, the Syndi -
cator signs a loan documents for a new loan or the assump -
tion of an existing one
12-The Syndicator then files the Articles of Organization
with the state in which the LLC is formed and any formal
registration documents if the property is in a different
state
13- The Syndicator now assigns his right to purchase the
property to the LLC in an ammendment to escrow prior to the
close. The property now vests in the name of the LLC and
the Syndicator gets his ownership percentage in the LLC

65. 14- The down payment and closing costs for the transaction
are paid to the Seller from the LLC member’s contribution
15- Escrow closes and the LLC takes possession of the
property
16- The Syndicator now sends copies of the closing
documents to all of the members of the LLC, along with any
other organizational documents that may not already be in
their possession
17- The Syndicator now steps into the role of the
partnership manager. The Syndicator oversees the property
on behalf of the LLC, executing the business plan
18- Distribution of cashflow is delivered to all the
investors on regular periodic periods. Also, regular
partnership reporting and communications are sent to
investors

66. 19- Meetings are held to inform and update investors on the
status and progress of the investment property. At times,
the investors may make major decisions, such as add or re -
place investors, refinance or sell the property
20- When it’s finally time to sell the property, the
Syndicator manages that process including:
(i) Hiring a real estate broker or represents the LLC
himself to sell the property
(ii) Negociating purchase offers and coordinating closing
preceedings
(iii) Providing disclosures and reports during the closing
(iv) Making final profit disributions to investors
(v) Winding down and terminating the investment group
partnership LLC