Go Rural FM Assignment

Gone Rural Historical Income Statement Information (Fiscal Years Ending June 30, R000s)
2008 2009 2010
Total Revenues 4,467 5,182 5,841
Cost of Goods Sold Payments to producers 1,078 1,215 1,523
Other (Includes onsite labor, raw materials, packaging) 965 1,208 1,442
Freight 346 523 540
Total Cost of Goods Sold 2,390 2,946 3,505
Gross Profit 2,077 2,236 2,337
Operating Expenses
General and Administration 878 1,005 1,096
Selling & marketing 624 802 831
Payments to boMake 55 80 80
Total Operating Expenses 1,556 1,887 2,006
Operating Profit 521 349 330
Other Income (Net) 18 186 49
Depreciation and Amortization 113 59 42
Bank Charges a
103 109 121
Interest Expense 15 13 21
Profit Before Tax 307 354 196
Taxes 92 37 40
Net Profit After Tax 215 316 156
# producers: 700 730 750
Average annual producer income (Rands): 1541 1664 2030

COMMON SIZE PROFIT OR LOSS
2008 2009 2010 Changes
Total Revenues 100% 100% 100% 16%
Cost of Goods Sold Payments to producers 24% 23% 26% 13%
Other (Includes onsite labor, raw materials,
packaging)
22% 23% 25% 25%
Freight 8% 10% 9% 51%
Total Cost of Goods Sold 54% 57% 60% 23%
Gross Profit 46%
Operating Expenses
General and Administration 20% 19% 19% 14%

Selling & marketing 14% 15% 14% 29%
Payments to boMake 1% 2% 1% 45%
Total Operating Expenses 35% 36% 34% 21%
Operating Profit 12% 7% 6% -33%
Other Income (Net) 0% 4% 1% 933%
Depreciation and Amortization 3% 1% 1% -48%
Bank Charges a
2% 2% 2% 6%
Interest Expense 0% 0% 0% -13%
Profit Before Tax 7% 7% 3% 15%
Taxes 2% 1% 1% -60%
Net Profit After Tax 5% 6% 3% 47%
Changes
13%
25%
19%
3%
19%
9%
4%
0%
6%
-5%
-74%
-29%
11%
62%
-45%
8%
-51%
Gone Rural Historical Balance Sheet Information (Fiscal Years Ending June 30, R000s)
2008 2009 2010
Assets
Cash 83 29 59
Accounts Receivable 642 956 825
Inventory 551 702 908
Prepaid Taxes 33 5 5
Deferred Taxesa 314 187 90
PP&E (Net) 203 207 169
Total Assets 1,826 2,086 2,056
Liabilities and Shareholder Capital
Account Payables 327 422 429
Bank Overdraft 111 84 7
Car Loan 87 51 11
Other Liabilities 215 109 33
Shareholder Loans 472 490 490
Shareholder Capital 614 930 1,086
Total Liabilities and Shareholder Equity 1,826 2,086 2,056
1,413
1,413
COMMON SIZE BALANCE SHEET
2008 2009 2010
Assets 2009 2010

Cash 4.55% 1.59% 3.23% ### -65% ### -29%
Accounts Receivable 35.16% 45.83% 40.13% ### 49% ### 29%
Inventory 30.18% 33.65% 44.16% ### 27% ### 65%
Prepaid Taxes 1.81% 0.24% 0.24% ### -85% ### -85%
Deferred Taxesa 17.20% 8.96% 4.38% ### -40% ### -71%
PP&E (Net) 11.12% 9.92% 8.22% ### 2% ### -17%
Total Assets 100% 100% 100% ### 14% ### 13%
Liabilities and Shareholder Capital ###
Account Payables 17.91% 20.23% 20.87%
Bank Overdraft 6.08% 4.03% 0.34% ### -24% ### -94%
Car Loan 4.76% 2.44% 0.54% ### -41% ### -87%
Other Liabilities 11.77% 5.23% 1.61% ### -49% ### -85%
Shareholder Loans 25.85% 23.49% 23.83% ### 4% ### 4%
Shareholder Capital 33.63% 44.58% 52.82% ### 51% ### 77%
Total Liabilities and Shareholder Equity 100% 100% 100% ### 14% ### 13%
Gone Rural Historical Balance Sheet Information (Fiscal Years Ending June 30, R000s)
2008 2009 2010
Assets
Cash 83 29 59
Deferred Taxesa 314 187 90
PP&E (Net) 203 207 169
Total Assets 1,826 2,086 2,056
Liabilities and Shareholder Capital
Car Loan 87 51 11
Shareholder Loans 472 490 490
Shareholder Capital 614 930 1,086
Total Liabilities and Shareholder Equity 1,826 2,086 2,056
2008 2009 2010
CURRENT ASSETS:
Cash 83 29 59
TOTAL CURRENT ASSETS 1,309 1,692 1,797
2008 2009 2010

CURRENT LIABILITIES:
Car Loan 87 51 11
740 666 480
FINANCIAL YEARS 2008
A OPERATING PERFORMANCE AND PROFITABILITY
i Gross Margin 46.50%
ii Profit Margin 6.87%
iii Return on Equity 50%
iv Return on Asset 16.81%
v Earnings Before Interest Depreciation & Amortization 9.76%
B SHORT TERM LIQUIDITY
i Current Ratio 1.77
ii Quick Ratio 0.98
C FINANCIAL LEVERAGE
i Debt to Asset 0.66
ii Debt to Capitalization 0.43
iii Interest Coverage 34.73
D PRODUCTIVITY/EFFICIENCY
i Asset Turnover 2.45
ii Inventory Turnover 1.96
iii Days Inventory 187
iv Receivables Collection Period 52.46

2009 2010
43.15% 40.01%
6.83% 3.36%
38.06% 18.05%
16.97% 9.53%
8.22% 4.42%
2.54 3.74
1.48 1.84
0.55 0.47
0.35 0.31
26.85 15.71
2.48 2.84
1.73 1.68
211 218
67.34 51.55
RATIO FORMULA RESULTS
2008 2009 2010
PROFITABILITY RATIOS
(𝐺𝑟𝑜𝑠𝑠
𝑃𝑟𝑜𝑓𝑖𝑡𝑠)/𝑅𝑒𝑣𝑒𝑛�𝑒%
Gross Margin 46.50% 43.15% 40.01%
(𝑁𝑒𝑡
𝑃𝑟𝑜𝑓𝑖𝑡𝑠)/𝑅𝑒𝑣𝑒𝑛�
𝑒%
Profit Margin 6.87% 6.83% 3.36%
(𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡𝑠)/
(𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟𝑠 𝐸𝑞�𝑖𝑡𝑦)%
Return on Equity 50% 38.06% 18.05%
(𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠)%
Return on Asset 16.81% 16.97% 9.53%
2008 2009 2010
SHORT TERM LIQUIDITY
(𝐶�𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠)/(𝐶�𝑟𝑟𝑒𝑛𝑡
Current Ratio 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠):1 1.77 2.54 3.74
(𝐶.𝐴−(𝐼𝑛𝑣𝑒𝑛𝑡𝑟𝑦+𝑃𝑟𝑒𝑝))/
Quick Ratio (𝐶�𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠) 0.98 1.48 1.84
2008 2009 2010
FINANCIAL LEVERAGE
(𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑏𝑡𝑠)/
Debt to Asset (𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠) 0.66 0.55 0.47
Debt to Capitalization 𝐷𝑒𝑏𝑡𝑠/ 0.43 0.35 0.31
(𝐷𝑒𝑏𝑡+𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟𝑠 𝐸𝑞�𝑖𝑡𝑦)
𝐸𝐵𝐼𝑇/(𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡
Interest Coverage 𝐸𝑥𝑝𝑒𝑛𝑠𝑒) 34.73 26.85 15.71

2008 2009 2010
EFFICIENCY RATIOS
𝑅𝑒𝑣𝑒𝑛�𝑒/(𝑇𝑜𝑡𝑎𝑙
𝐴𝑠𝑠𝑒𝑡𝑠)
Asset Turnover 2.45 2.48 2.84
(𝐶𝑜𝑠𝑡 𝑜𝑓 𝐺𝑜𝑜𝑑𝑠
Inventory Turnover 𝑆𝑜𝑙𝑑)/𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 1.96 1.73 1.68
365/(𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦
Days Inventory 𝑇�𝑟𝑛𝑜𝑣𝑒𝑟) 187 211 218
365÷𝑆𝑎𝑙𝑒𝑠/𝑅𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙
Receivables Collection 𝑒𝑠
Period/ Days Sales 52.46 67.34 51.55
Outstanding (DSO)
𝑅𝑒𝑣𝑒𝑛�𝑒/𝑅𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒𝑠
Receivables Turnover 6.96 5.42 7.08
𝑃�𝑟𝑐ℎ𝑎𝑠𝑒𝑠/𝑃𝑎𝑦𝑎𝑏𝑙𝑒𝑠
Payables Turnover 3.30 2.88 3.55
Payable Payment Period/ 365÷𝑃�𝑟𝑐ℎ𝑎𝑠𝑒𝑠/𝑃𝑎𝑦𝑎

Days Payable Outstanding 𝑏𝑙𝑒𝑠 111 127 103
(DPO)
INTERPRETATION
This ratio show the proportion of sales revenue that translates into gross earnings. The
Gross Margin Ratio of the company declined from 46.5% in 2008 to 43.15% in 2009 and
further to 40.01% in 2010, inspite of the consistent increase in revenue for those years.
The declining gross earnings of the company implies that the cost of goods sold is not
increasing in proportion to sales. Sale increasd by 16% from 2008 to 2009, while cost of
sales increased by 23%. Also sales increased by 13% from 2009 to 2010, while cost of
sales increased by 19%. Therefore, Gone Rural should investigate the sharp increase in
freight cost and also payment to producers for those periods.
This ratio show the proportion of sales revenue that translates into profits. The Profit
Margin Ratio of the company declined from 6.87% in 2008 to 6.83% in 2009 and 3.36% in
2010, inspite of the consistent increase in revenue for those periods. The declining
profitability of the company implies that the operating expenses of the Gone Rural is on
the high side and definitely eroding the company's profitability. The company needs find
ways of reducing it's operating costs.
This ratio measures the ability of the company to generate profit to it's shareholders
investment. The returns to equity ratio of Gone Rural has been on the decline since 2008,
inspite of the increase in revenue and also additional increase in equity capital from
investors. This could be as a result of the increase in cost of goods sold and increase in
operating costs for the period.
This ratio measures the returns earned by a company on its assets. This ratio also shows
a decline from 2008 (16.81%) to 2010 (9.53%). The decline in the Return on Asset is as a
result of the continuous increase in both cost of good operating expenses.
INTERPRETATION
This ratio show the ability for Gone Rural to satisfy its current liabilities from its current
assets. The Current Ratio looks adequate as the current liabilities are covered 1.77 times
in 2009, 2.54 times in 2009, and 3.74 times in 2010. The danger here is that Gone Rural
in 2010 increased its investment in current assets significantly compared to it's current
liabilities. This indicates that the company is carrying excess working capital than
required. Therefore, the company needs to free-up some of it's investments in current
assets since this could be a reason for the consistent fall in profitability as such assets do
not generate income.
This ratio shows the ability to cover the current liabilities from the most liquid of current
assets. The Quick Ratio is also adequate since it covers the current liabilities 0.98 times,
1.48 times and 1.84 times in 2008, 2009 and 2010 respectively. This ratio also indicates
that Gone Rural is having excess liquidity tied down in its current assets. The company
has excess investment in receivables as indicated in Exhibit 4. This ratio depicts a poor
working capital position.
INTERPRETATION
This ratio measures the percentage of total assets financed with debt. In 2008, 66% of
the assets of Gone Rural was financed with debt capital, this indicates a high financial
risk. But over the years, the company has been able to reduce this to 47%, this is still
slightly high as the accepted norm in most industry is 40%.
This ratio measures the percentage of a company's capital (debt plus equity) represented
by debt. This ratio is fairly reasonable as the level of the company's exposure to financial
risk as continually reduced. A reduction of this ratio from 43% in 2008 to 31% in 2010.
This ratio measures the number of times a company's EBIT could cover it's interest
payments. In 2008, the ratio was 34.73 times, in 2009, it was 26.85 timea and in 2010 it
was 15.71 times. This ratio shows that the fixed interest bearing security holders of Gone
Rural are adequately covered. Therefore, the company has a stronger solvency.
INTERPRETATION
This ratio measures the company's overall ability to generate revenue/sales with it's assets. In 2008,
for every R1 invested in assets, the company generates R2.45. This ratio has increased significantly
over the years, and in 2010, the company generated R2.84 for every R1 investment in assets. This
indicates that the management of Gone Rural are effectively and efficiently utilizing the assets of
the company to generate significant revenue.
This ratio measures the number of times inventory is converted into sale through cost of goods sold.
Although this ratio is on a decline since 2008, but on the overall the ratio is fairly reasonable as the
company converts it's inventory into sales 1.96 times in 2008, 1.73 times in 2009 and 1.68 times in
2010. The management of Gone Rural needs to improve in converting it's inventory into revenue
faster than it is doing at present.
This ratio measures the average number of days a company holds its inventory before selling it. It
indicates the number of days that funds are tied up in inventory. This ratio in 2008 was 187 days,
and 211 days in 2009 and finally 218 days in 2010. This indicates that the company's inventories are
not been coverted to sales fast enough.
This ratio measures the elapsed time between a sale and cash collection, reﬂecting how fast the
company collects cash from customers to whom it offers credit. This ratio shows that it takes 52
days to collect cash from sales in 2008, 67 days in 2009 and 55 days in 2010. When compared to
the standard payment term of 30-45 days specified in the case, then it is ratio is not good enough.
This ratios show poor working capital management from Gone Rural management. The length of
time it takes to sell products and collect cash from sales in almost 2 months on the average. The
company's management need to introduce better working capital policies that cold accelerate
collection.
This ratio measures how quickly credit sales are converted to cash.
This ratio measures how effective a business manages it's payables. The ratio measures the number
of times the company pays off all its creditors in one year.
This ratio measures the elapsed time between a purchases and cash payment, reﬂecting how fast
the company pays cash to suppliers to whom it obtained credit. When compared to Gone Rural
Receivables Collection Period, it shows that the company pays its creditors far earlier than it
recieves cash from its debtors. This is an indicator of a poor working capital management by Gone
Rural, as the company will often require additional source of short term funding to meet its short
term obligations.
2008 2009 2010
Gross Margin 46.50% 43.15% 40.01%
(𝑁𝑒𝑡
𝑃𝑟𝑜𝑓𝑖𝑡𝑠)/𝑅𝑒𝑣𝑒𝑛�
𝑒%
Profit Margin 6.87% 6.83% 3.36%
Return on Equity 50% 38.06% 18.05%
Return on Asset 16.81% 16.97% 9.53%
2008 2009 2010
2008 2009 2010
FINANCIAL LEVERAGE

2008 2009 2010
EFFICIENCY RATIOS
Outstanding (DSO)
𝑅𝑒𝑣𝑒𝑛�𝑒/𝑅𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒𝑠
Receivables Turnover 6.96 5.42 7.08
𝑃�𝑟𝑐ℎ𝑎𝑠𝑒𝑠/𝑃𝑎𝑦𝑎𝑏𝑙𝑒𝑠
Payables Turnover 3.30 2.88 3.55

(DPO)
INTERPRETATION
This ratio show the proportion of sales revenue that translates into gross earnings. The
Gross Margin Ratio of the company declined from 46.5% in 2008 to 43.15% in 2009 and
further to 40.01% in 2010, inspite of the consistent increase in revenue for those years.
The declining gross earnings of the company implies that the cost of goods sold is
increasing in proportion greater than that of sales. Sale increasd by 16% from 2008 to
2009, while cost of sales increased by 23%. Also sales increased by 13% from 2009 to
2010, while cost of sales increased by 19%. Therefore, Gone Rural should investigate the
sharp increase in freight cost and also payment to producers for those periods.
This ratio show the proportion of sales revenue that translates into profits. The Profit
Margin Ratio of the company declined from 6.87% in 2008 to 6.83% in 2009 and 3.36% in
2010, inspite of the consistent increase in revenue for those periods. The declining
profitability of the company implies that the operating expenses of the Gone Rural is on
the high side and definitely eroding the company's profitability. The company needs find
ways of reducing it's operating costs.
investment. The returns to equity ratio of Gone Rural has been on the decline since 2008,
inspite of the increase in revenue and also additional increase in equity capital from
investors. This could be as a result of the increase in cost of goods sold and increase in
operating costs for the period.
This ratio measures the returns earned by a company on its assets. This ratio also shows
a decline from 2008 (16.81%) to 2010 (9.53%). The decline in the Return on Asset is as a
result of the continuous increase in both cost of good operating expenses.
INTERPRETATION
assets. The Current Ratio looks adequate as the current liabilities are covered 1.77 times
in 2009, 2.54 times in 2009, and 3.74 times in 2010. The danger here is that Gone Rural
in 2010 increased its investment in current assets significantly compared to it's current
liabilities. This indicates that the company is carrying excess working capital than
required. Therefore, the company needs to free-up some of it's investments in current
assets since this could be a reason for the consistent fall in profitability as such assets do
not generate income.
assets. The Quick Ratio is also adequate since it covers the current liabilities 0.98 times,
1.48 times and 1.84 times in 2008, 2009 and 2010 respectively. This ratio also indicates
that Gone Rural is having excess liquidity tied down in its current assets. The company
has excess investment in receivables as indicated in Exhibit 4. This ratio depicts a poor
working capital position.
INTERPRETATION
This ratio measures the percentage of total assets financed with debt. In 2008, 66% of
the assets of Gone Rural was financed with debt capital, this indicates a high financial
risk. But over the years, the company has been able to reduce this to 47%, this is still
slightly high as the accepted norm in most industry is 40%.
by debt. This ratio is fairly reasonable as the level of the company's exposure to financial
risk as continually reduced. A reduction of this ratio from 43% in 2008 to 31% in 2010.
payments. In 2008, the ratio was 34.73 times, in 2009, it was 26.85 timea and in 2010 it
was 15.71 times. This ratio shows that the fixed interest bearing security holders of Gone
Rural are adequately covered. Therefore, the company has a stronger solvency.
INTERPRETATION
This ratio measures the company's overall ability to generate revenue/sales with it's assets. In 2008,
for every R1 invested in assets, the company generates R2.45. This ratio has increased significantly
over the years, and in 2010, the company generated R2.84 for every R1 investment in assets. This
indicates that the management of Gone Rural are effectively and efficiently utilizing the assets of
the company to generate significant revenue.
Although this ratio is on a decline since 2008, but on the overall the ratio is fairly reasonable as the
company converts it's inventory into sales 1.96 times in 2008, 1.73 times in 2009 and 1.68 times in
2010. The management of Gone Rural needs to improve in converting it's inventory into revenue
faster than it is doing at present.
This ratio measures the average number of days a company holds its inventory before selling it. It
indicates the number of days that funds are tied up in inventory. This ratio in 2008 was 187 days,
and 211 days in 2009 and finally 218 days in 2010. This indicates that the company's inventories are
not been coverted to sales fast enough.
company collects cash from customers to whom it offers credit. This ratio shows that it takes 52
days to collect cash from sales in 2008, 67 days in 2009 and 55 days in 2010. When compared to
the standard payment term of 30-45 days specified in the case, then it is ratio is not good enough.
This ratios show poor working capital management from Gone Rural management. The length of
time it takes to sell products and collect cash from sales in almost 2 months on the average. The
company's management need to introduce better working capital policies that cold accelerate
collection.
the company pays cash to suppliers to whom it obtained credit. When compared to Gone Rural
Receivables Collection Period, it shows that the company pays its creditors far earlier than it
recieves cash from its debtors. This is an indicator of a poor working capital management by Gone
Rural, as the company will often require additional source of short term funding to meet its short
term obligations.
2008 2009 2010
Gross Margin 46.50% 43.15% 40.01%
(𝑁𝑒𝑡
Profit Margin 𝑃𝑟𝑜𝑓𝑖𝑡𝑠)/𝑅𝑒𝑣𝑒𝑛� 6.87% 6.83% 3.36%
𝑒%
Return on Equity 50% 38% 18%
Return on Asset 16.81% 16.97% 9.53%

FINANCIAL LEVERAGE

EFFICIENCY RATIOS
Outstanding (DSO)
(𝐶𝑟𝑒𝑑𝑖𝑡 𝑆𝑎𝑙𝑒𝑠)/
(𝐴𝑣𝑒𝑟𝑎𝑔𝑒
Receivables Turnover 𝑅𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒𝑠) 6.96 5.42 7.08
(𝐶𝑟𝑒𝑑𝑖𝑡 𝑃�𝑟𝑐ℎ𝑎𝑠𝑒𝑠)/
Payables Turnover (𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑃𝑎𝑦𝑎𝑏𝑙𝑒𝑠) 7.31 6.98 8.17

(DPO)
INTERPRETATION
This ratio show the proportion of sales revenue that translates into gross earnings.
This ratio show the proportion of sales revenue that translates into profits.
investment.
This ratio measures the returns earned by a company on its assets.

assets.
assets.
This ratio measures the percentage of total assets financed with debt.
by debt.
payments.
This ratio measures the company's overall ability to generate revenue/sales with it's assets.
This ratio measures the average number of days a company holds its inventory before selling it.
company collects cash from customers to whom it offers credit.
the company pays cash to suppliers to whom it obtained credit.

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Gone Rural Historical Income Statement Information (Fiscal Years Ending June 30, R000s)

2008 2009 2010

Total Revenues 4,467 5,182 5,841

Cost of Goods Sold Payments to producers 1,078 1,215 1,523

Freight 346 523 540

Total Cost of Goods Sold 2,390 2,946 3,505

Gross Profit 2,077 2,236 2,337

General and Administration 878 1,005 1,096

Selling & marketing 624 802 831

Total Operating Expenses 1,556 1,887 2,006

Operating Profit 521 349 330

Other Income (Net) 18 186 49

Depreciation and Amortization 113 59 42

Profit Before Tax 307 354 196

Net Profit After Tax 215 316 156

# producers: 700 730 750

Average annual producer income (Rands): 1541 1664 2030

General and Administration 20% 19% 19% 14%

Accounts Receivable 642 956 825

Inventory 551 702 908

Deferred Taxesa 314 187 90

PP&E (Net) 203 207 169

Total Assets 1,826 2,086 2,056

Liabilities and Shareholder Capital

Account Payables 327 422 429

Bank Overdraft 111 84 7

Other Liabilities 215 109 33

Shareholder Loans 472 490 490

Shareholder Capital 614 930 1,086

Total Liabilities and Shareholder Equity 1,826 2,086 2,056

Assets 2009 2010

Accounts Receivable 35.16% 45.83% 40.13% ### 49% ### 29%

Inventory 30.18% 33.65% 44.16% ### 27% ### 65%

Prepaid Taxes 1.81% 0.24% 0.24% ### -85% ### -85%

Deferred Taxesa 17.20% 8.96% 4.38% ### -40% ### -71%

PP&E (Net) 11.12% 9.92% 8.22% ### 2% ### -17%

Total Assets 100% 100% 100% ### 14% ### 13%

Liabilities and Shareholder Capital ###

Account Payables 17.91% 20.23% 20.87%

Bank Overdraft 6.08% 4.03% 0.34% ### -24% ### -94%

Car Loan 4.76% 2.44% 0.54% ### -41% ### -87%

Other Liabilities 11.77% 5.23% 1.61% ### -49% ### -85%

Shareholder Loans 25.85% 23.49% 23.83% ### 4% ### 4%

Shareholder Capital 33.63% 44.58% 52.82% ### 51% ### 77%

2008 2009 2010

A OPERATING PERFORMANCE AND PROFITABILITY

i Gross Margin 46.50%

ii Profit Margin 6.87%

iii Return on Equity 50%

iv Return on Asset 16.81%

v Earnings Before Interest Depreciation & Amortization 9.76%

B SHORT TERM LIQUIDITY

i Current Ratio 1.77

ii Quick Ratio 0.98

i Debt to Asset 0.66

ii Debt to Capitalization 0.43

iii Interest Coverage 34.73

i Asset Turnover 2.45

ii Inventory Turnover 1.96