Statement of Income ($1,000s)

Micro Tiles Inc.

2012 2013 2014

Revenue 1,058 1,564 2,052

Cost of sales
Purchases 355 630 825
Freight in 29 44 74
Labour 366 529 665
Depreciation/amortization 4 4 8
Other charges 0
Total cost of sales 754 1,207 1,572

Gross profit 304 357 480

Other income 0

Distribution costs
Salaries 37 41 65
Commissions 32 47 68
Travelling 11 16 32
Advertising 9 10 20
Depreciation/amortization 2 3 5
Other charges 0
Total distribution costs 91 117 190

Administrative expenses
Salaries 102 107 117
Leasing 20 26 31
Depreciation/amortization 9 24 30
Other charges 11 16 17
Total administrative expenses 142 173 195

Finance costs 7 14 34

Total other income/expenses 240 304 419

Profit before taxes 64 53 61

Income tax expense 18 12 14

Profit for the year 46 41 47

Template 1_x000D_Statement of Income

Statement of Comprehensive Income ($1,000s)
Micro Tiles Inc. 2012 2013 2014

Profit for the year 46 41 47

Other comprehensive income (loss)
Exchange differences on translating foreign
operations 0 0 0
Cash flow hedges 0 0 0
Gains on property revaluation 0 0 0
Total other comprehensive income/(loss) 0 0 0
Total comprehensive income for the year 46 41 47

Statement of Changes in Equity

2012 2013 2014
Common shares
Balance at beginning of year 25 25 25
Common shares issued 100
Other changes 0 0 0
Balance at end of year 25 25 125

Retained earnings
Balance at beginning of year 125 171 212
Profit applicable to common shareholders 46 41 47
Sub-total 171 212 259
Dividends paid to shareholders 0 0
Balance at end of year 171 212 259

Accumulated other comprehensive income/(loss)

Balance at beginning of year 0 0 0
Other comprehensive income/(loss) 0 0 0
Balance at end of year 0 0 0

Total shareholders' equity 196 237 384

Template 2_x000D_Statement of Comprehensive Income and Statement of Changes in Equity

Statement of Financial Position ($1,000s)
Micro Tiles Inc. 2012 2013 2014
Assets
Non-current assets
Property, plant and equipment 156 238 538
Goodwill 14 14 14
Investments 0 0 0
Due from shareholders 50 0 0
Sub-total 220 252 552
Accumulated depreciation/amortization 62 93 136

Total non-current assets 158 159 416

Current assets
Inventories 114 210 297
Trade receivables 241 298 400
Prepaid expenses 4 4 4
Cash and cash equivalents 9 13 15
Term deposits 0 0 0
Other current asset 2 0 0 0

Total current assets 368 525 716

Total assets 526 684 1,132

Equity and liabilities

Share capital 25 25 125
Retained earnings 171 212 259
Other comprehensive income/(loss) 0 0 0

Total equity 196 237 384

Total non-current liabilities 51 74 300

Current liabilities
Trade and other payables 130 137 200
Short-term borrowings 0
Current portion of long-term debt 0
Accruals 43 38 40
Working capital loan 106 198 208
Total current liabilities 279 373 448

Total liabilities 330 447 748

Total equity and liabilities 526 684 1,132

Net: Assets = Equity + Liabilities 0 0 0

Template 3_x000D_Statement of Financial Position

Statement of Sources and Uses of Funds
2012 2013 Change 2014 Change

Property, plant and equipment 156 238 -82 538 -300

Goodwill 14 14 0 14 0
Investments 0 0 0 0 0
Due from shareholders 50 0 50 0 0
Accumulated depreciation/amortiz 62 93 31 136 43
Inventories 114 210 -96 297 -87
Trade receivables 241 298 -57 400 -102
Prepaid expenses 4 4 0 4 0
Cash and cash equivalents 9 13 -4 15 -2
Term deposits 0 0 0 0 0
Other current asset 2 0 0 0 0 0
Share capital 25 25 0 125 100
Retained earnings 171 212 41 259 47
Other comprehensive income/(los 0 0 0 0 0
Total non-current liabilities 51 74 23 300 226
Trade and other payables 130 137 7 200 63
Short-term borrowings 0 0 0 0 0
Current portion of long-term debt 0 0 0 0 0
Accruals 43 38 -5 40 2
Working capital loan 106 198 92 208 10
Adjustments 0 0
Total 0 0

Guidelines to determine whether the item is a source of use of funds

Source of funds 1
• Decrease in asset accounts
• Increase in liability accounts
• Increase in equity accounts

Use of funds -1
• Increase in asset accounts
• Decrease in liability accounts
• Decrease in equity accounts

Template 4_x000D_Statement of Sources and Uses of Funds

Statement of Cash Flows
Micro Tiles Inc.
2013 Total 2014 Total

Operating activities
Profit for the year 41 47
Depreciation/amortization 31 43
Inventories (96) (87)
Trade receivables (57) (102)
Prepaid expenses 0 0
Term deposits 0 0
Other current asset 2 0 0
Trade and other payables 7 63
Short-term borrowings 0 0
Current portion of long-term debt 0 0
Accruals (5) 2
Working capital loan 92 10
Total operating activities 13 (24)

Financing activities
Share capital 0 100
Other comprehensive income/(loss 0 0
Total non-current liabilities 23 226
Dividends paid to shareholders 0 0
Total financing activities 23 326

Investing activities
Property, plant and equipment (82) (300)
Goodwill 0 0
Investments 0 0
Due from shareholders 50 0
Adjustments 0 0
Total investing activities (32) (300)

Increase (Decrease) 4 2
Cash and equ. - Beginning of year 9 13
Cash and equ. - End of year 13 15

Variance from Balance Sheet 0 0

Template 5_x000D_Statement of Cash Flows

Vertical Analysis of the Statement of Income
2012 % of Revenue 2013 % of Revenue 2014 % of Revenue

Revenue 1,058 100.00 1,564 100.00 2,052 100.00

Cost of sales
Purchases 355 33.55 630 40.28 825 40.20
Freight in 29 2.74 44 2.81 74 3.61
Labour 366 34.59 529 33.82 665 32.41
Depreciation/amortization 4 0.38 4 0.26 8 0.39
Other charges 0 0.00 0 0.00 0 0.00
Total cost of sales 754 71.27 1,207 77.17 1,572 76.61

Gross profit 304 28.73 357 22.83 480 23.39

Other income 0 0.00 0 0.00 0 0.00

Distribution costs
Salaries 37 3.50 41 2.62 65 3.17
Commissions 32 3.02 47 3.01 68 3.31
Travelling 11 1.04 16 1.02 32 1.56
Advertising 9 0.85 10 0.64 20 0.97
Depreciation/amortization 2 0.19 3 0.19 5 0.24
Other charges 0 0.00 0 0.00 0 0.00
Total distribution costs 91 8.60 117 7.48 190 9.26

Administrative expenses
Salaries 102 9.64 107 6.84 117 5.70
Leasing 20 1.89 26 1.66 31 1.51
Depreciation/amortization 9 0.85 24 1.53 30 1.46
Other charges 11 1.04 16 1.02 17 0.83
Total administrative expenses 142 13.42 173 11.06 195 9.50

Finance costs 7 0.66 14 0.90 34 1.66

Total other income/expenses 240 22.68 304 19.44 419 20.42

Profit before taxes 64 6.05 53 3.39 61 2.97

Income tax expense 18 1.70 12 0.77 14 0.68

Profit for the year 46 4.35 41 2.62 47 2.29

Template 6_x000D_Vertical Analysis of the Statement of Income

Horizontal Analysis of the Statement of Income
2012 2013 % Change 2014 % Change

Revenue 1,058 1,564 47.83 2,052 31.20

Cost of sales
Purchases 355 630 77.46 825 30.95
Freight in 29 44 51.72 74 68.18
Labour 366 529 44.54 665 25.71
Depreciation/amortization 4 4 0.00 8 100.00
Other charges 0 0 #DIV/0! 0 #DIV/0!
Total cost of sales 754 1,207 60.08 1,572 30.24
Gross profit 304 357 17.43 480 34.45

Other income 0 0 #DIV/0! 0 #DIV/0!

Distribution costs
Salaries 37 41 10.81 65 58.54
Commissions 32 47 46.88 68 44.68
Travelling 11 16 45.45 32 100.00
Advertising 9 10 11.11 20 100.00
Depreciation/amortization 2 3 50.00 5 66.67
Other charges 0 0 #DIV/0! 0 #DIV/0!
Total distribution costs 91 117 28.57 190 62.39

Administrative expenses
Salaries 102 107 4.90 117 9.35
Leasing 20 26 30.00 31 19.23
Depreciation/amortization 9 24 166.67 30 25.00
Other charges 11 16 45.45 17 6.25
Total administrative expenses 142 173 21.83 195 12.72

Finance costs 7 14 100.00 34 142.86

Total other income/expenses 240 304 26.67 419 37.83

Profit before taxes 64 53 -17.19 61 15.09

Income tax expense 18 12 -33.33 14 16.67

Profit for the year 46 41 -10.87 47 14.63

Template 7_x000D_Horizontal Analysis of the Statement of Income

Vertical Analysis of the Statement of Financial Position
2012 % of 2013 % of 2014 % of
Assets Total Assets Total Assets Total Assets
Non-current assets
Property, plant and equipment 156 29.66 238 34.80 538 47.53
Goodwill 14 2.66 14 2.05 14 1.24
Investments 0 0.00 0 0.00 0 0.00
Due from shareholders 50 9.51 0 0.00 0 0.00
Sub-total 220 41.83 252 36.84 552 48.76
Accumulated depreciation/amortization 62 11.79 93 13.60 136 12.01

Total non-current assets 158 30.04 159 23.25 416 36.75

Current assets
Inventories 114 21.67 210 30.70 297 26.24
Trade receivables 241 45.82 298 43.57 400 35.34
Prepaid expenses 4 0.76 4 0.58 4 0.35
Cash and cash equivalents 9 1.71 13 1.90 15 1.33
Term deposits 0 0.00 0 0.00 0 0.00
Other current asset 2 0 0.00 0 0.00 0 0.00

Total current assets 368 69.96 525 76.75 716 63.25

Total assets 526 100.00 684 100.00 1,132 100.00

Equity and liabilities

Share capital 25 4.75 25 3.65 125 11.04
Retained earnings 171 32.51 212 30.99 259 22.88
Other comprehensive income/(loss) 0 0.00 0 0.00 0 0.00

Total equity 196 37.26 237 34.65 384 33.92

Total non-current liabilities 51 9.70 74 10.82 300 26.50

Current liabilities
Trade and other payables 130 24.71 137 20.03 200 17.67
Short-term borrowings 0 0.00 0 0.00 0 0.00
Current portion of long-term debt 0 0.00 0 0.00 0 0.00
Accruals 43 8.17 38 5.56 40 3.53
Working capital loan 106 20.15 198 28.95 208 18.37

Total current liabilities 279 53.04 373 54.53 448 39.58

Total liabilities 330 62.74 447 65.35 748 66.08

Total equity and liabilities 526 100.00 684 100.00 1,132 100.00

Template 8_x000D_Vertical Analysis of the Statement of Financial Position

Horizontal Analysis of the Statement of Financial Position
2012 2013 % change 2014 % change
Assets
Non-current assets
Property, plant and equipment 156 238 52.56 538 126.05
Goodwill 14 14 0.00 14 0.00
Investments 0 0 #DIV/0! 0 #DIV/0!
Due from shareholders 50 0 -100.00 0 #DIV/0!
Sub-total 220 252 14.55 552 119.05
Accumulated depreciation/amortization 62 93 50.00 136 46.24

Total non-current assets 158 159 0.63 416 161.64

Current assets
Inventories 114 210 84.21 297 41.43
Trade receivables 241 298 23.65 400 34.23
Prepaid expenses 4 4 0.00 4 0.00
Cash and cash equivalents 9 13 44.44 15 15.38
Term deposits 0 0 #DIV/0! 0 #DIV/0!
Other current asset 2 0 0 #DIV/0! 0 #DIV/0!

Total current assets 368 525 42.66 716 36.38

Total assets 526 684 30.04 1,132 65.50

Equity and liabilities

Share capital 25 25 0.00 125 400.00
Retained earnings 171 212 23.98 259 22.17
Other comprehensive income/(loss) 0 0 #DIV/0! 0 #DIV/0!

Total equity 196 237 20.92 384 62.03

Total non-current liabilities 51 74 45.10 300 305.41

Current liabilities
Trade and other payables 130 137 5.38 200 45.99
Short-term borrowings 0 0 #DIV/0! 0 #DIV/0!
Current portion of long-term debt 0 0 #DIV/0! 0 #DIV/0!
Accruals 43 38 -11.63 40 5.26
Working capital loan 106 198 86.79 208 5.05
Total current liabilities 279 373 33.69 448 20.11

Total liabilities 330 447 35.45 748 67.34

Total equity and liabilities 526 684 30.04 1,132 65.50

Template 9_x000D_Horizontal Analysis of the Statement of Financial Position

Financial Ratios Micro Tiles Inc.
Liquidity Act. Act. Proj.
Debt/Coverage 2012 2013 2014
Asset-Management

Liquidity Ratios
Net working capital 89.0 152.0 268.0
($1,000s)
Current ratio (times) 1.3 1.4 1.6

Cash ratio (times) 0.03 0.03 0.03

Quick ratio (times) 0.9 0.8 0.9

Days of working 77.6 86.6 88.4

capital ratio

Using operating 0.8 % (1.2)%

activities cash flow
(percent)

Debt/Coverage Ratios
Debt-to-total assets 62.7 65.4 66.1
ratio (percent)

Debt-to-equity ratio 1.7 1.9 1.9

(times)

Times-interest-earned 10.1 4.8 2.8

ratio (times)

Fixed-charges- 3.4 2.3 1.9

coverage ratio (times)

Asset-Management Ratios

Template 10_x000D_Ratios
 Average collection 83.1 69.6 71.2
period (days)

Days in Inventory - 55.2 63.5 69.0

(based on cost of
sales)

Capital assets 6.7 9.8 4.9

turnover ratio (times)

Total assets turnover 2.0 2.3 1.8

ratio (times)

Profitability Ratios
Gross profit to 28.7 22.8 23.4
revenue ratio
(percent)
Profit margin to 6.7 4.3 4.6
revenue ratio
(percent)
Return on revenue 4.3 2.6 2.3
ratio (percent)
Return on total assets 8.7 6.0 4.2
ratio (percent)

Return on invested 18.6 13.2 6.9

capital ratio (percent)

Template 10_x000D_Ratios
Du Pont System For the year 2012
Micro Tiles Inc.

Cash and cash equivalents

$9 Revenue

+ $1,058 Total assets turnover

Prepaid expenses 2.01

$4 Total current assets ÷

+ $368
Total assets
Trade receivables
$241 + $526

+
Total non-current assets
Inventories Return on
$114 $158 total assets
X
+ 13.50

Other non-current 1
$0

Other non-current 2
$0

Revenue
Cost of sales
$1,058
$754
Profit margin
-
+ $71
Profit margin on
Total costs/ revenue
Total distribution costs expenses ÷
6.71
$91 $987
Revenue

+ $1,058

Total administrative expenses

$142

Template 11_x000D_Du Pont System

Du Pont System For the year 2013
Micro Tiles Inc.

Cash and cash equivalents

$13 Revenue

+ $1,564 Total assets turnover

Prepaid expenses 2.29

$4 Total current assets ÷

+ $525
Total assets
Trade receivables
$298 + $684

+
Total non-current assets
Inventories Return on
$210 $159 total assets
X
+ 9.80

Other non-current 1
$0

Other non-current 2
$0

Revenue
Cost of sales
$1,564
$1,207
Profit margin
-
+ $67
Profit margin on
Total costs/ revenue
Total distribution costs expenses ÷
4.28
$117 $1,497
Revenue

+ $1,564

Total administrative expenses

$173

Template 11_x000D_Du Pont System

Du Pont System For the year 2014
Micro Tiles Inc.

Cash and cash equivalents

$15 Revenue

+ $2,052 Total assets turnover

Prepaid expenses 1.81

$4 Total current assets ÷

+ $716
Total assets
Trade receivables
$400 + $1,132

+
Total non-current assets
Inventories Return on
$297 $416 total assets
X
+ 8.39

Other non-current 1
$0

Other non-current 2
$0

Revenue
Cost of sales
$2,052
$1,572
Profit margin
-
+ $95
Profit margin on
Total costs/ revenue
Total distribution costs expenses ÷
4.63
$190 $1,957
Revenue

+ $2,052

Total administrative expenses

$195

Template 11_x000D_Du Pont System

Cash Flow
Micro Tiles Inc.
2012 2013 2014

Profit for the year 46 41 47

Depreciation/amortization expense
Cost of sales 4 4 8
Disbribution costs 2 3 5
Administrative expenses 9 24 30
Total depreciation/amortization expense 15 31 43

Cash Flow 61 72 90

Earnings before interest and

and taxes (EBIT)
2012 2013 2014

Earnings (profit) before taxes 64 53 61

Finance costs 7 14 34

EBIT 71 67 95

Earnings before interest, taxes,

depreciation/amortization
(EBITDA)
2012 2013 2014

EBIT 71 67 95

Depreciation/amortization expense 15 31 43

EBITDA 86 98 138

Template 12_x000D_Cash Flow, EBIT, EBITDA

Economic Value Added (EVA)
Micro Tiles Inc.
2012 2013 2014

Operating Income
Operating income 71 67 95
Miscellaneous adjustments 0 0 0
Total 71 67 95
Income tax rate (%) 28% 23% 23%
Income taxes 20 15 22
Operating income after taxes 51 52 73

Cost of capital

Total borrowed capital 353 509 892

Total weighted cost of capital (%) 10.00% 10.00% 10.00%
Total cost of capital 35 51 89

Economic value added (EVA) 16 1 -16

Template 13_x000D_Economic Value Added

Sustainable Growth Rate
Micro Tiles Inc.

2012 2013 2014

1. Ratio profit for the year to revenue (M) 0.04 0.03 0.02

2. Ratio of reinvested profit for the year to

profit for the year before dividends (R) 1.00 1.00 1.00

3. Ratio of total liabilities

to equity (D/E) 1.68 1.89 1.95

4. Ratio of assets to revenue (A) 0.50 0.44 0.55

The growth formula

(M) (R) (1+D/E)

(A) - (M) (R) (1+D/E)

Sustainable or potential growth rate 30.67% 20.92% 13.95%

Company's revenue growth rate 47.83% 31.20%

Template 14_x000D_Sustainable Growth Rate

Financial Health Score
Micro Tiles Inc.

2012 2013 2014

a = working capital / total assets 0.17 0.22 0.24

b = retained earnings / total assets 0.33 0.31 0.23

c = EBIT / total assets 0.13 0.10 0.08

d = equity / total liabilities 0.59 0.53 0.51

e = sales / total assets 2.01 2.29 1.81

The formula
Z = 1.2 (a) +1.4 (b) + 3.3 (c) + 0.6 (d) + 1.0 (e)

Safe zone = 3.0 and over

Gray zone = 1.8 to 3.0

Bankrupt zone = 0 to 1.8

The company's financial health score 3.47 3.63 3.00

Template 15_x000D_Financial Health Score