FCFFVALUATIONMODEL

Beforeyoustart Thespreadsheethascircularreasoning.Thisisnotaproblem.Gointocalculationoptions(inexcel)andcheck
theiterationbox.
WhatthemodeldoeThismodelisdesignedtovaluefirmswithoperatingincomethatiseitherpositiveorcanbenormalizedtobe
positive.Itallowsforupto15yearsofhighgrowth,andcanbeusedeitherasa2stageora3stagemodel.
Inputs Theinputsareinthefollowingpages:
1.Thebulkoftheinputsareinthemasterinputspage.Here,youcaninputthenumbersfromthecurrent
financialstatements,andreviewandchangetheinputsforthevaluation.
2.Ifyouwanttonormalizedoperatingincome,usetheearningsnormalizerworksheet.
3.IfyouhaveR&Doroperatingleases,youwillneedtoinputtherequirednumbersinthoseworksheets.
Important:Beconsistentabouttheunitsyouuse.Ifyouusemillions,usemillionsforallofyourinputs.
Options Thespreadsheetcanbeusedtovalueacompany,withfixedinputsforahighgrowthphaseanddifferentinputs
forastablegrowthphase(2stagemodel)oritcanbeadjustedtoallowforatransitionphase(3stagemodel).
Toswitchfromonetotheother,enteryesinthemasterinputpagetothequestionofwhetheryouwantthe
inputsadjustedduringthesecondhalfofthehighgrowthphase.
Youcanevenmakeitastablegrowthmodel,bysettingthelengthofthehighgrowthperiodtozero.
Otherworksheets Therearetwootherworksheetsthatyoumightfindusefulattheendofthisspreadsheet
1.Bottomupbetaestimator:willestimateyourleveredbeta,givenanunleveredbeta(whichyouwillhaveto
input.
2.Industryaverages:Here,youcanlookupindustryaveragesforvariablessuchasbeta,returnoncapital,
reinvestmentratesandworkingcapital.
Output Theoutputiscontainedinthevaluationmodelworksheet.
ODEL
s(inexcel)andcheck

benormalizedtobe
ra3stagemodel.

romthecurrent

oseworksheets.
ofyourinputs.
seanddifferentinputs
ase(3stagemodel).
theryouwantthe

hichyouwillhaveto

returnoncapital,
An apology: I apologize for the number of inputs that are required on this sheet. Many of the inputs are required
If you have negative operating income, you will either have to normalize it to make it positive, or use the highg
MasterInputSheet
DoyouwanttocapitalizeR&Dexpenses? No !YesorNo
Doyouwanttoconvertoperatingleasestodebt? No !YesorNo
Doyouwanttonormalizeoperatingincome? No

Inputs
FromCurrentFinancials
CurrentEBIT= R$1,751.00 !Ifnegative,gobackandchoosetonorma
CurrentInterestExpense= R$11.40
CurrentCapitalSpending R$911.00
CurrentDepreciation&Amort'n= R$392.00
Taxrate(forcomputingaftertaxoperatingincome)= 27.50%
Marginaltaxrate= 27.50% Previousyearend
CurrentRevenues= R$15,533.00 R$12,554.00
CurrentNoncashWorkingCapital= R$5,813.00
Chg.WorkingCapital= R$135.00 Previousyearend
BookValueofDebt= R$188.00 R$187.00
BookValueofEquity= R$5,492.00 R$4,479.00

Cash&MarketableSecurities= R$3,612.00 R$1,276.00

ValueofNonoperatingAssets= R$3,937.07 R$1,991.00
MinorityInterests(inbookvalueterms)= $0.00
PricetoBookRatioofsectorwithminorityholdings= 2.10
MarketDataforyourfirm
Isyourstockcurrentlytraded? Yes
Ifyes,enterthefollowing:
CurrentStockPrice= R$365.00
Numberofsharesoutstanding= 76.00
MarketValueofDebt= R$185.58
Ifno,enterthefollowing
Wouldyouliketousethebookvaluedebtratio? No
Ifno,enterthedebtratiotouseinvaluation 35%

GeneralMarketData
LongTermTreasurybondrate= 5.00%
MatureMarketEquityPremium= 6.00%
CountryEquityRiskPremium= 2.63%
ExchangeRateforfiscalyearitems($R/$)= R$2.00 R$1.90
ExchangeRateforcurrrentpriceconversions= R$2.05
Ratings
Doyouwanttoestimatethefirm'ssyntheticrating= No !Ifyes,usetheratingestimatorworksheet
Ifyes,choosethetypeoffirm 2
Ifnot,whatisthecurrentratingofthefirm? AAA
Enterthecostofdebtassociatedwiththerating= 6.55%

Options
Doyouhaveequityoptions(managementoptions,warrants)outstanding? No
Ifyes,enterthenumberofoptions 2.23
Averagestrikeprice R$13.85
Averagematurity 1.5
StandardDeviationinstockprice 30%
Doyouwanttousethestockpricetovaluetheoptionoryourestimatedvalue? P

ValuationInputs
HighGrowthPeriod
Lengthofhighgrowthperiod= 5
Betatouseforhighgrowthperiodforyourfirm= 1.5
Lambdatouseforyourfirm(forbothhighgrowthandstablegrowth)= 0.25
Doyouwanttokeepthedebtratiocomputedfromyourinputs? Yes
Ifyes,thedebtratiothatwillbeusedtocomputethecostofcapitalis 0.66%
Ifno,enterthedebtratiothatyouwouldliketouseinthehighgrowthperiod 7.00%
Doyouwanttokeeptheexistingratioofworkingcapitaltorevenue? Yes
Ifyes,theworkingcapitalasapercentofrevenueswillbe 37.42%
Ifno,entertheratioofworkingcapitaltorevenuestouseinanalysis 12%
Doyouwanttocomputeyourgrowthratefromfundamentals? Yes
Ifno,entertheexpectedgrowthrateinoperatingincomeforhighgrowthperio 15%
Ifyes,theinputstothefundamentalgrowthcalculation(baseduponyourinputs)are
ReturnonCapital= 37.45%
ReinvestmentRate= 51.52%
Doyouwanttochangetheseinputs? Yes
ReturnonCapital= 30.00%
ReinvestmentRate= 50.00%

Doyouwantmetograduallyadjustyourhighgrowthinputsinthesecondhalf No

StableGrowthPeriod
Growthrateduringstablegrowthperiod= 5.00%
Betatouseinstablegrowthperiod= 1.20
CountryRiskpremiumforequityinstablegrowthperiod= 0.80%
DebtRatiotouseinstablegrowthperiod= 10.00%
Pretaxcostofdebtinstablegrowthperiod= 5.75%
TaxRatetouseinstablegrowthperiod= 27.50%
Tocomputethereinvestmentrateinstablegrowth,youhavetwooptions
Doyouwanttocomputereinvestmentneedsinstablegrowthbasedonfundam Yes
Ifyes,enterthereturnoncapitalthatthefirmwillhaveinstablegrowth 11.58%
Ifno,entercapitalexpenditureas%ofdepreciationinstablegrowth 120% (inpercent)
 Many of the inputs are required only if you choose the appropriate option, though.
ake it positive, or use the highgrowth.xls spreadsheet.

GotoR&DConverter
GotoOperatingleaseconverter
GotoEarningsNormalizer

negative,gobackandchoosetonormalizeearnings.

viousyearend

viousyearend

0.145082
0.130737
Averagematurityofdebt= 3

yes,usetheratingestimatorworksheetthatisattached
 2003 2004 2005 2006 2007
EBIT (1-t) -R$ 98 R$ 91 R$ 879 R$ 1,269
BV of debt R$ 3,016 R$ 3,554 R$ 3,637 R$ 187
BV of equity R$ 3,768 R$ 4,480 R$ 4,863 R$ 4,479
Cash holdings R$ 3,659 R$ 3,588 R$ 4,479 R$ 1,276
Invested Capital R$ 3,125 R$ 4,446 R$ 4,021 R$ 3,390
ROIC -3.14% 2.05% 21.86% 37.45%

Cap ex R$ 374 R$ 1,544 -R$ 11 -R$ 595

Depreciation R$ 358 R$ 284 R$ 330 R$ 361
Chg in WC -R$ 1,440 R$ 61 -R$ 84 R$ 325
Reinvestment R$ 3,125 R$ 1,321 -R$ 425 -R$ 631
Reinvestment Rate -3188.78% 1451.65% -48.35% -49.71%
Aggregate
R$ 2,141 R$ 535.37
R$ 10,394
R$ 17,590
R$ 13,002
R$ 14,982
14.29% 15.79%

R$ 1,312
R$ 1,333
-R$ 1,138
R$ 3,390
158.30%
Cross holding % of holdingTotal Market Ca Value of holdin Book ValueP/Book (Sector)
Hyundai Merchant Mari 17.60% 4806.00 845.86
Hyundai Motors 3.46% 17540.00 606.88
Hyundai Elevator 2.16% 688.00 14.86
Hyundai Corp 0.36% 602.00 2.17
Others ? ? 84.20

Hyundai Oil Bank 19.87% 1825.77 362.78 329.80 1.10

Hyundai Samho 94.92% 2026.23 1923.30 1068.50 1.80
Hyundai Finance 67.49% 143.75 97.02 88.20 1.10
Value of Cross holdings 3937.07
Estimated Market value
Business Revenues EV/Sales Value Value WeightUnlevered beta
Shipbuilding 8341 3.23 26941 63.73% 1.60
Offshore & Engineerin 2563 1.97 5049 11.94% 1.44
Industrial plant 1200 1.55 1860 4.40% 1.29
Engine and Machinery 2252 1.36 3063 7.24% 1.21
Electro Electric Syste 1753 1.8 3155 7.46% 1.19
Construction Equipme 1823 1.21 2206 5.22% 1.29
42274 100.00% 1.49
evered beta
NormalizingEarnings
Approachusedtonormalizeearnings= 1

Ifhistoricalaverage,
AverageEarningsbeforeinterestandtaxes= 970

IfhistoricalaverageROC,
Historicalaveragepretaxreturnoncapital= 22%

Ifsectormargin
PretaxOperatingMarginforSector= 10.96% !Lookatindustryaverage

NormalizedEarningsbeforeinterestandtaxes= $970.00

Worksheetfornormalization(Last5yearsofdata)
5 4 3 2 1
Revenues 6571 10231 9133 8342 9983
EBIT 1243 1740 794 546 527
OperatingMargin 18.92% 17.01% 8.69% 6.55% 5.28%

NetCapex 282 112 27 151.76 196.02

NoncashWC 26.07 305.82 915.03 222.74 1502.9

Inventory 367.38 682.72 1281.06 1121.56 2371.09

AccountsRec 74.48 149.74 537.37 314.02 1386.19
OtherCurrentassets 34.23 57.17 174.73 291.92 474.46
AccountsPayable 190.06 248.98 358.23 521.17 615.72
OtherCurrentLiabilities 259.96 334.83 719.9 1429.07 2113.12

NetCapexas%ofEBIT(1t 13.96%
NoncashWCas%ofReven 5.71%

Normalizedreinvestment= $347.28
Total
44260
4850
10.96%

490.78
2527.08
 R&DConverter
ThisspreadsheetconvertsR&Dexpensesfromoperatingtocapitalexpenses.Itmakestheappropriateadjustmentstooperatingincome,net
income,thebookvalueofassetsandthebookvalueofequity.

Inputs
OverhowmanyyearsdoyouwanttoamortizeR&Dexpenses 5 !Ifindoubt,usethelookuptablebelow
Enterthecurrentyear'sR&Dexpense= $1,594.00 Themaximumallowedistenyears
EnterR&Dexpensesforpastyears:thenumberofyearsthatyouwillneedtoenterwillbedeterminedbytheamortizationperiod
Donotinputnumbersinthefirstcolumn(Year).Itwillgetautomaticallyupdatedbasedontheinputabove.
Year R&DExpenses
1 1026.00 !Year1istheyearpriortothecurrentyear
2 698.00 !Year2isthetwoyearspriortothecurrentyear
3 399.00
4 211.00
5 89.00
0
0
0
0
0

Output
Year R&DExpense Unamortizedportion Amortizationthisyear
Current 1594.00 1.00 1594.00
1 1026.00 0.80 820.80 $205.20
2 698.00 0.60 418.80 $139.60
3 399.00 0.40 159.60 $79.80
4 211.00 0.20 42.20 $42.20
5 89.00 0.00 0.00 $17.80
0 0.00 0.00 0.00 $0.00
0 0.00 0.00 0.00 $0.00
0 0.00 0.00 0.00 $0.00
0 0.00 0.00 0.00 $0.00
0 0.00 0.00 0.00 $0.00
ValueofResearchAsset= $3,035.40 $484.60

Amortizationofassetforcurrentyear= $484.60
AdjustmenttoOperatingIncome= $1,109.40 !Apositivenumberindicatesanincreaseinoperatingincome(addtoreportedEBIT)
Tax Effect of R&D Expensing $305

Look Up Table for Amortization Periods

IndustryName AmortizationPeriod
Advertising 2
Aerospace/Defen 10 NontechnologicalService 2years
AirTransport 10 Retail,TechService 3years
Aluminum 5 LightManufacturing 5years
Apparel 3 HeavyManufacturing 10years
Auto&Truck 10 Research,withPatenting 10years
AutoParts(OEM 5 LongGestationPeriod 10years
AutoParts(Repl 5
Bank 2
Bank(Canadian) 2
Bank(Foreign) 2
Bank(Midwest) 2
Beverage(Alcoho 3
Beverage(SoftD 3
BuildingMateria 5
CableTV 10
CanadianEnergy 10
Cement&Aggreg 10
Chemical(Basic) 10
Chemical(Divers 10
Chemical(Specia 10
Coal/AlternateE 5
Computer&Peri 5
ComputerSoftwa 3
Copper 5
DiversifiedCo. 5
Drug 10
Drugstore 3
EducationalServ 3
ElectricUtil.(Ce 10
ElectricUtility( 10
ElectricUtility( 10
ElectricalEquip 10
Electronics 5
Entertainment 3
Environmental 5
FinancialService 2
FoodProcessing 3
FoodWholesaler 3
ForeignElectron 5
ForeignTelecom 10
Furn./HomeFurn 3
Gold/SilverMini 5
Grocery 2
HealthcareInfo 3
HomeAppliance 5
Homebuilding 5
Hotel/Gaming 3
HouseholdProdu 3
IndustrialServic 3
Insurance(Divers 3
Insurance(Life) 3
Insurance(Prop/ 3
Internet 3
InvestmentCo.( 3
InvestmentCo.( 3
InvestmentCo.( 3
Machinery 10
Manuf.Housing/ 5
Maritime 10
MedicalServices 3
MedicalSupplies 5
MetalFabricatin 10
Metals&Mining 5
NaturalGas(Dist 10
NaturalGas(Dive 10
Newspaper 3
OfficeEquip&S 5
OilfieldServices 5
Packaging&Con 5
Paper&ForestP 10
Petroleum(Integr 5
Petroleum(Produ 5
PrecisionInstru 5
Publishing 3
R.E.I.T. 3
Railroad 5
Recreation 5
Restaurant 2
Retail(SpecialL 2
RetailBuilding 2
RetailStore 2
SecuritiesBroke 2
Semiconductor 5
SemiconductorC 5
Shoe 3
Steel(General) 5
Steel(Integrated) 5
Telecom.Equipm 10
Telecom.Service 5
Textile 5
Thrift 2
Tire&Rubber 5
Tobacco 5
Toiletries/Cosme 3
Trucking/Transp. 5
Utility(Foreign) 10
WaterUtility 10
 OperatingLeaseConverter
Inputs
Operatingleaseexpenseincurrentyear= $121.00
OperatingLeaseCommitments(Fromfootnotetofinancials)
Year Commitment !Year1isnextyear,.
1 $156.00
2 $143.00
3 $122.00
4 $109.00
5 $97.00
6andbeyond $448.00

Output
PretaxCostofDebt= 6.55% !Ifyoudonothaveacostofdebt,usetheratingsestimator

Fromthecurrentfinancialstatements,enterthefollowing
ReportedOperatingIncome(EBIT)= $1,751.00 !ThisistheEBITreportedinthecurrentincomestatement
ReportedDebt= $185.58 !Thisistheinterestbearingdebtreportedonthebalancesheet

Numberofyearsembeddedinyr6estimate= 3 !Iusetheaverageleaseexpenseoverthefirstfiveyears
toestimatethenumberofyearsofexpensesinyr6
ConvertingOperatingLeasesintodebt
Year Commitment PresentValue
1 $156.00 $146.41
2 $143.00 $125.96
3 $122.00 $100.86
4 $109.00 $84.57
5 $97.00 $70.63
6andbeyond $149.33 $287.73 !Commitmentbeyondyear6convertedintoanannuityfortenyears
DebtValueofleases= $816.16

RestatedFinancials
DepreciationonOperatingLeaseAsset= $102.02 !Iusestraightlinedepreciation
AdjustmenttoOperatingEarnings= $53.46 !PVofoperatingleases*Pretaxcostofdebt
AdjustmenttoTotalDebtoutstanding= $816.16
EBIT (1 -t) = $1,340.52
Expected growth rate in perpetuity 5.00%
Cost of capital = 11.58%
Return on capital = 11.58%

Reinvestment Rate = 43.19%

Terminal Value = $11,579.27

Growth RateReinvestment Rate FCFF Terminal value

0% 0.00% 1,341 11,579
1% 8.64% 1,225 11,579
2% 17.28% 1,109 11,579
3% 25.91% 993 11,579
4% 34.55% 877 11,579
5% 43.19% 762 11,579
minal value
 Two-Stage FCFF Discount Model

InputSummary
Localcurrency Dollar
NormalizedEBIT(beforeadjustments) R$1,751.00 $875.50

AdjustedEBIT= R$1,751.00 $875.50

AdjustedInterestExpense= R$11.40 $5.70

AdjustedCapitalSpending R$911.00 $455.50

AdjustedDepreciation&Amort'n= R$392.00 $196.00

TaxRateonIncome= 27.50% 27.50%

Marginaltaxrate= 27.50% 27.50%

CurrentRevenues= R$15,533.00 $7,766.50

CurrentNoncashWorkingCapital= R$5,813.00 ($2,906.50)

Chg.WorkingCapital= R$135.00 $67.50

AdjustedBookValueofDebt= R$187.00 $98.42

AdjustedBookValueofEquity= R$4,479.00 $2,357.37

InvestedCapital R$3,390.00 $1,784.21

LengthofHighGrowthPeriod= 5 Forever

GrowthRate= 15.00% 5.00%

DebtRatiousedinCostofCapitalCalcula 0.66% 10.00%

Betausedforstock= 1.50 1.20

Lambdausedforstock= 0.25 0.25

Riskfreerate= 5.00% 5.00%

MatureMarketEquityPremium= 6.00% 6.00%

CountryRiskPremium= 2.63% 0.80%

CostofDebt= 6.55% 5.75%

TaxRateforcomputingincome= 27.50% 27.50%

Marginaltaxrate= 27.50% 27.50%

ReturnonCapital= 30.00% 11.58%

ReinvestmentRate= 50.00% 43.19%

Page
 Two-Stage FCFF Discount Model

Outputfromtheprogram
CostofEquity= 14.66%

Equity/(Debt+Equity)= 99.34%

AftertaxCostofdebt= 4.75%

Debt/(Debt+Equity)= 0.66%
CostofCapital= 14.59%

IntermediateOutput
ExpectedGrowthRate 15.00%

WorkingCapitalaspercentofrevenues= 37.42% (inpercent)

TheFCFFforthehighgrowthphaseareshownbelow(upto10years)

Current 1 2 3 4 5

ExpectedGrowthRate 15.00% 15.00% 15.00% 15.00% 15.00%

CumulatedGrowth 115.00% 132.25% 152.09% 174.90% 201.14%

ReinvestmentRate 50.00% 50.00% 50.00% 50.00% 50.00%

EBIT*(1taxrate) $635 $730 $839 $965 $1,110 $1,277

(CapExDepreciation $260 $1,237 $1,422 $1,636 $1,881 $2,163

Chg.WorkingCapita $68 ($872) ($1,003) ($1,153) ($1,326) ($1,525)

FreeCashflowtoFirm $308 $365 $420 $483 $555 $638

CostofCapital 14.59% 14.59% 14.59% 14.59% 14.59%

CumulatedCostofCapital 1.1459 1.3131 1.5047 1.7243 1.9759

PresentValue $318 $320 $321 $322 $323

GrowthRateinStablePhase= 5.00%

ReinvestmentRateinStablePhase= 43.19%

FCFFinStablePhase= $761.55

CostofEquityinStablePhase= 12.40%

Equity/(Equity+Debt)= 90.00%

ATCostofDebtinStablePhase= 4.17%
Debt/(Equity+Debt)= 10.00%

Page
 Two-Stage FCFF Discount Model

CostofCapitalinStablePhase= 11.58%
Valueattheendofgrowthphase= $11,579.27
Valuation
PresentValueofFCFFinhighgrowthphase= $1,603.89

PresentValueofTerminalValueofFirm= $5,860.25
Valueofoperatingassetsofthefirm= $7,464.14

ValueofCash,MarketableSecurities&Nonoperatingassets= $3,682.47

ValueofFirm= $11,146.61

MarketValueofoutstandingdebt= $90.53

MinorityInterestinconsolidatedholdings= $0.00

MarketValueofEquity= $11,056.09

ValueofEquityinOptions= $0.00

ValueofEquityinCommonStock= $11,056.09
MarketValueofEquity/share= $145.47

MarketValueofEquity/shareinBR= R$298.22

Page
 Two-Stage FCFF Discount Model

TerminalYear

$1,340.52

$1,163.56

($584.60)

$761.55

Page
ValuingOptionsorWarrants
Enterthecurrentstockprice= $365.00
Enterthestrikepriceontheoption= $13.85
Entertheexpirationoftheoption= 1.5
Enterthestandarddeviationinstockprices= 30.00% (volatility)
Entertheannualizeddividendyieldonstock= 0.00%
Enterthetreasurybondrate= 5.00%
Enterthenumberofwarrants(options)outstanding 2.23
Enterthenumberofsharesoutstanding= 76.00

Donotinputanynumbersbelowthisline
VALUINGWARRANTSWHENTHEREISDILUTION
StockPrice= 365 #Warrantsissued= 2.23
StrikePrice= 13.85 #Sharesoutstanding= 76
AdjustedS= 364.622976034 T.Bondrate= 5.00%
AdjustedK= 13.85 Variance= 0.0900
Expiration(inyears)= 1.5 Annualizeddividendyield= 0.00%
Div.Adj.interestrate= 5.00%

d1= 9.2892234795
N(d1)= 1

d2= 8.9218000181
N(d2)= 1

Valueperoption= $351.77
Valueofalloptionsoutstanding= $784.46
BottomupBetaCalculator
Unleveredbetaforsector= 1.49 !Lookupindustryaverages

Output
Firm'sCurrentmarketvalueD/Eratio= 0.67% !Revertedbacktoconventionaldebttoequityratio
Firm'sCurrenttaxrate= 27.50%

Bottomupbetaforfirm= 1.50
1.6363636364
Inputsforsyntheticratingestimation
Enterthetypeoffirm= 2 (Enter1iflargemanufacturingfirm,2ifsmallerorriskierfirm,3iffinancialservicefi
EntercurrentEarningsbeforeinterestandtaxes(EBIT)= $1,751.00 (Addbackonlylongterminterest
Entercurrentinterestexpenses= $11.40 (Useonlylongterminterestexpen
Entercurrentlongtermgovernmentbondrate= 5.00%
Output
Interestcoverageratio= 153.60
EstimatedBondRating= AAA
EstimatedDefaultSpread= 0.40%
EstimatedCostofDebt= 5.40%

Forlargemanufacturingfirms Forfinancialservicefirms
Ifinterestcoverageratiois Iflongterminterestcoverageratiois
> to Ratingis Spreadis greaterthan to
100000 0.199999 D 12.00% 100000 0.049999
0.2 0.649999 C 10.50% 0.05 0.099999
0.65 0.799999 CC 9.50% 0.1 0.199999
0.8 1.249999 CCC 8.75% 0.2 0.299999
1.25 1.499999 B 7.25% 0.3 0.399999
1.5 1.749999 B 6.50% 0.4 0.499999
1.75 1.999999 B+ 5.50% 0.5 0.599999
2 2.2499999 BB 4.00% 0.6 0.749999
2.25 2.49999 BB+ 3.00% 0.75 0.899999
2.5 2.999999 BBB 2.00% 0.9 1.199999
3 4.249999 A 1.30% 1.2 1.49999
4.25 5.499999 A 1.00% 1.5 1.99999
5.5 6.499999 A+ 0.85% 2 2.49999
6.5 8.499999 AA 0.70% 2.5 2.99999
8.50 100000 AAA 0.40% 3 100000

Forsmallerandriskierfirms
Ifinterestcoverageratiois
greaterthan to Ratingis Spreadis
100000 0.499999 D 12.00%
0.5 0.799999 C 10.50%
0.8 1.249999 CC 9.50%
1.25 1.499999 CCC 8.75%
1.5 1.999999 B 7.25%
2 2.499999 B 6.50%
2.5 2.999999 B+ 5.50%
3 3.499999 BB 4.00%
3.5 3.9999999 BB+ 3.00%
4 4.499999 BBB 2.00%
4.5 5.999999 A 1.30%
6 7.499999 A 1.00%
7.5 9.499999 A+ 0.85%
9.5 12.499999 AA 0.70%
12.5 100000 AAA 0.40%
ierfirm,3iffinancialservicefirm)
ddbackonlylongterminterestexpenseforfinancialfirms)
eonlylongterminterestexpenseforfinancialfirms)

coverageratiois
Ratingis SpreadisOperatingIncomeDecline
D 12.00% 15.00%
C 10.50% 10.00%
CC 9.50% 8.00%
CCC 8.75% 6.00%
B 7.25% 5.00%
B 6.50% 4.50%
B+ 5.50% 4.00%
BB 4.00% 3.00%
BB+ 3.00% 2.50%
BBB 2.00% 1.50%
A 1.30% 1.30%
A 1.00% 1.20%
A+ 0.85% 1.15%
AA 0.70% 0.90%
AAA 0.40% 0.70%
Industry Name Number of firms
Levered Beta Unlevered B Std Dev: Equity Market D/E
Advertising 31 2.02 1.75 101.29% 43.26%
Aerospace/Defense 64 1.10 1.03 61.32% 25.66%
Air Transport 36 1.21 1.10 64.80% 24.32%
Apparel 57 1.30 1.22 88.82% 18.38%
Auto Parts 51 1.70 1.59 80.58% 27.65%
Automotive 12 1.59 0.96 68.91% 134.57%
Bank 426 0.77 0.38 61.15% 156.11%
Bank (Midwest) 45 0.93 0.73 55.60% 59.52%
Beverage 34 0.88 0.77 66.05% 26.52%
Biotechnology 158 1.03 1.16 113.11% 13.48%
Building Materials 45 1.50 0.89 78.83% 94.33%
Cable TV 21 1.37 0.98 50.77% 68.06%
Chemical (Basic) 16 1.36 1.24 49.27% 27.35%
Chemical (Diversified) 31 1.51 1.39 56.31% 22.37%
Chemical (Specialty) 70 1.28 1.15 71.60% 21.15%
Coal 20 1.53 1.32 55.52% 28.90%
Computer Software 184 1.04 1.18 82.03% 7.49%
Computers/Peripherals 87 1.30 1.33 97.69% 10.23%
Diversified Co. 107 1.14 0.71 75.00% 102.24%
Drug 279 1.12 1.08 103.44% 15.46%
E-Commerce 57 1.03 1.08 88.13% 6.40%
Educational Services 34 0.83 0.92 78.24% 12.33%
Electric Util. (Central) 21 0.75 0.48 23.37% 86.16%
Electric Utility (East) 21 0.70 0.49 18.30% 66.16%
Electric Utility (West) 14 0.75 0.49 19.85% 84.54%
Electrical Equipment 68 1.33 1.35 67.76% 12.66%
Electronics 139 1.07 1.08 89.93% 22.33%
Engineering & Const 25 1.22 1.39 65.03% 11.99%
Entertainment 77 1.63 1.31 108.37% 40.99%
Entertainment Tech 40 1.23 1.48 76.91% 9.76%
Environmental 82 0.81 0.60 92.14% 43.70%
Financial Svcs. (Div.) 225 1.31 0.50 82.27% 251.49%
Food Processing 112 0.91 0.77 60.68% 29.53%
Foreign Electronics 9 1.09 1.24 35.40% 42.09%
Funeral Services 6 1.14 0.85 39.35% 56.60%
Furn/Home Furnishings 35 1.81 1.65 80.90% 24.39%
Healthcare Information 25 1.17 1.20 65.79% 6.35%
Heavy Truck & Equip 21 1.80 1.48 69.92% 43.66%
Homebuilding 23 1.45 1.02 70.00% 100.28%
Hotel/Gaming 51 1.74 1.28 79.09% 52.07%
Household Products 26 1.07 0.95 62.24% 18.99%
Human Resources 23 1.24 1.40 78.27% 10.31%
Industrial Services 137 0.93 0.81 74.43% 32.71%
Information Services 27 1.07 0.89 48.10% 30.21%
Insurance (Life) 30 1.58 1.54 53.35% 64.14%
Insurance (Prop/Cas.) 49 0.91 1.01 37.88% 23.60%
Internet 186 1.09 1.24 117.09% 2.71%
IT Services 60 1.06 1.14 69.45% 6.09%
Machinery 100 1.20 1.14 57.21% 19.12%
Maritime 52 1.40 0.58 69.19% 170.38%
Med Supp Invasive 83 0.85 0.80 79.18% 16.08%
Med Supp Non-Invasive 146 1.03 1.07 84.89% 13.02%
Medical Services 122 0.91 0.78 76.26% 49.45%
Metal Fabricating 24 1.59 1.63 68.98% 15.49%
Metals & Mining (Div.) 73 1.33 1.28 104.38% 14.10%
Natural Gas (Div.) 29 1.33 1.06 48.77% 37.07%
Natural Gas Utility 22 0.66 0.46 24.90% 67.38%
Newspaper 13 1.76 1.42 90.74% 46.35%
Office Equip/Supplies 24 1.38 1.04 64.26% 63.03%
Oil/Gas Distribution 13 0.96 0.65 56.61% 58.30%
Oilfield Svcs/Equip. 93 1.55 1.39 62.37% 22.92%
Packaging & Container 26 1.16 0.88 41.59% 51.82%
Paper/Forest Products 32 1.36 0.96 93.84% 59.86%
Petroleum (Integrated) 20 1.18 1.12 38.99% 19.19%
Petroleum (Producing) 176 1.34 1.13 88.11% 24.88%
Pharmacy Services 19 1.12 1.00 59.43% 20.48%
Pipeline MLPs 27 0.98 0.72 34.90% 40.97%
Power 93 1.35 0.65 97.19% 148.82%
Precious Metals 84 1.15 1.14 90.87% 8.20%
Precision Instrument 77 1.28 1.33 65.33% 15.94%
Property Management 31 1.13 0.59 82.21% 140.63%
Public/Private Equity 11 2.18 1.62 77.54% 59.87%
Publishing 24 1.25 0.89 64.98% 63.28%
R.E.I.T. 5 1.47 1.15 49.61% 34.71%
Railroad 12 1.44 1.24 42.95% 25.15%
Recreation 56 1.45 1.11 70.55% 48.69%
Reinsurance 13 0.93 1.05 30.40% 23.54%
Restaurant 63 1.27 1.19 68.37% 12.77%
Retail (Hardlines) 75 1.77 1.65 92.79% 24.33%
Retail (Softlines) 47 1.44 1.57 60.91% 5.61%
Retail Automotive 20 1.37 1.12 52.02% 38.11%
Retail Building Supply 8 1.04 0.97 37.61% 14.06%
Retail Store 37 1.29 1.14 67.71% 25.58%
Retail/Wholesale Food 30 0.75 0.64 40.02% 41.34%
Securities Brokerage 28 1.20 0.43 44.31% 430.56%
Semiconductor 141 1.50 1.69 70.52% 8.35%
Semiconductor Equip 12 1.79 2.42 68.70% 15.20%
Shoe 19 1.25 1.38 55.52% 2.18%
Steel 32 1.68 1.40 56.94% 46.40%
Telecom. Equipment 99 1.02 1.28 87.77% 12.96%
Telecom. Services 74 0.98 0.82 68.58% 34.09%
Telecom. Utility 25 0.88 0.54 60.40% 96.15%
Thrift 148 0.71 0.75 53.93% 29.33%
Tobacco 11 0.85 0.78 41.53% 18.71%
Toiletries/Cosmetics 15 1.30 1.20 60.34% 20.64%
Trucking 36 1.24 1.08 59.88% 27.77%
Utility (Foreign) 4 0.96 0.48 32.68% 155.03%
Water Utility 11 0.66 0.43 18.89% 81.42%
Wireless Networking 57 1.27 1.12 75.03% 27.06%
Total Market 5891 1.15 0.92 75.08% 46.64%
Market DebROE ROC Effective Tax Rate Pre-tax Ope After-tax Operating
30.20% 8.89% 10.54% 10.73% 10.27% 7.44%
20.42% 34.00% 18.53% 20.72% 10.16% 7.31%
19.56% 108.90% 16.45% 20.54% 8.78% 6.86%
15.53% 17.34% 14.02% 16.08% 10.97% 7.60%
21.66% 22.59% 15.82% 18.99% 6.49% 4.98%
57.37% 18.46% 6.96% 24.07% 6.99% 4.94%
60.95% 7.60% NA 15.97% NA NA
37.31% 9.08% NA 17.77% NA NA
20.96% 24.58% 12.95% 19.14% 20.45% 15.60%
11.88% 15.15% -13.33% 2.49% -7.79% -13.73%
48.54% -5.17% 2.58% 11.17% 4.17% 3.16%
40.50% 16.13% 8.80% 27.35% 19.58% 12.43%
21.47% 25.83% 13.66% 20.90% 12.09% 9.56%
18.28% 19.26% 13.81% 21.73% 13.20% 9.30%
17.46% 18.50% 12.25% 17.58% 11.10% 7.87%
22.42% 24.24% 15.26% 12.75% 15.94% 12.53%
6.97% 79.13% 45.06% 12.27% 31.35% 24.62%
9.28% 52.52% 32.09% 11.77% 14.15% 10.83%
50.55% 33.28% 8.01% 15.55% 14.09% 11.76%
13.39% 22.64% 15.02% 5.36% 21.91% 16.96%
6.02% 16.47% 13.08% 12.33% 14.39% 10.87%
10.97% 53.22% 34.34% 25.17% 20.80% 12.91%
46.28% 10.77% 6.38% 31.82% 17.72% 11.58%
39.82% 11.91% 6.89% 33.14% 19.13% 12.66%
45.81% 9.88% 6.11% 31.30% 16.79% 11.38%
11.24% 23.02% 15.03% 17.02% 13.19% 9.95%
18.25% 22.20% 15.72% 10.36% 5.99% 4.48%
10.71% 15.44% 13.58% 26.26% 4.72% 3.35%
29.07% 11.46% 9.45% 15.38% 17.72% 12.17%
8.89% 15.08% 11.69% 11.59% 10.48% 9.04%
30.41% 11.00% 7.56% 11.71% 15.22% 9.48%
71.55% -303.09% 5.95% 19.18% 43.49% 33.84%
22.80% 17.85% 11.88% 20.00% 9.08% 6.52%
29.62% 6.25% 7.83% 35.12% 5.27% 3.23%
36.14% 12.34% 7.81% 30.84% 15.64% 9.82%
19.61% 11.66% 9.50% 20.43% 6.43% 4.58%
5.97% 11.00% 9.45% 22.19% 12.11% 7.64%
30.39% 30.24% 10.88% 20.62% 9.13% 6.64%
50.07% -35.82% -2.09% 5.12% -1.56% -2.09%
34.24% 5.64% 6.95% 14.53% 12.61% 10.13%
15.96% 21.80% 14.52% 25.12% 17.38% 12.79%
9.35% 7.25% 7.67% 25.35% 1.91% 1.18%
24.65% 13.76% -53.50% 19.03% -21.40% -23.67%
23.20% 15.60% 10.83% 18.93% 19.33% 15.06%
39.08% 10.45% NA 28.04% NA NA
19.10% 13.32% NA 19.36% NA NA
2.63% 39.73% 32.75% 6.87% 18.25% 14.58%
5.74% 36.11% 26.95% 19.15% 14.43% 10.32%
16.05% 14.59% 12.60% 22.15% 11.05% 8.22%
63.01% 4.88% 4.76% 5.55% 14.81% 13.69%
13.85% 22.13% 15.88% 11.86% 22.22% 17.28%
11.52% 29.56% 19.24% 12.73% 6.48% 4.81%
33.09% 32.81% 18.55% 19.93% 11.11% 7.39%
13.41% 18.66% 14.78% 26.55% 15.07% 10.89%
12.36% 24.79% 19.48% 11.04% 31.57% 21.88%
27.04% 9.04% 7.10% 21.98% 28.94% 17.50%
40.26% 10.98% 8.09% 30.16% 12.80% 8.57%
31.67% 16.73% 11.05% 25.13% 14.59% 9.02%
38.66% 18.05% 10.36% 21.05% 6.65% 4.59%
36.83% 11.35% 6.83% 13.70% 18.45% 14.46%
18.64% 10.48% 8.54% 17.39% 15.11% 11.28%
34.13% 17.52% 10.40% 24.23% 10.12% 7.02%
37.45% 8.40% 11.01% 10.61% 12.01% 9.84%
16.10% 14.76% 10.08% 27.41% 9.76% 5.65%
19.92% 9.46% 13.50% 11.14% 25.74% 19.10%
17.00% 14.82% 11.18% 24.67% 5.11% 3.14%
29.06% 12.71% 8.60% 6.37% 8.95% 8.68%
59.81% 6.95% 7.56% 8.66% 14.54% 10.88%
7.57% 9.09% 9.57% 7.51% 33.30% 24.02%
13.75% 15.37% 12.10% 13.94% 10.74% 8.80%
58.44% 10.74% 5.18% 18.59% 15.63% 12.95%
37.45% 35.96% -0.14% 3.79% -2.58% -0.48%
38.76% 31.94% 11.38% 18.55% 12.10% 8.33%
25.77% 15.58% 14.07% 1.04% 129.07% 126.01%
20.09% 16.43% 11.10% 23.74% 28.43% 18.56%
32.75% 11.06% 8.26% 17.37% 11.51% 9.26%
19.06% 13.29% NA 7.22% NA NA
11.32% 38.25% 20.32% 21.57% 15.82% 11.17%
19.57% 22.91% 14.99% 23.04% 7.50% 4.99%
5.32% 36.27% 28.74% 24.64% 9.39% 5.82%
27.59% 20.53% 9.89% 34.43% 6.88% 4.46%
12.33% 16.06% 12.18% 31.39% 8.13% 5.13%
20.37% 21.01% 13.60% 25.02% 5.84% 3.83%
29.25% 16.43% 10.38% 31.21% 3.18% 2.07%
81.15% NA 10.39% 26.22% 48.78% 35.58%
7.70% 39.10% 28.41% 11.01% 22.76% 18.13%
13.20% 65.76% 40.44% 15.17% 21.65% 18.30%
2.13% 30.49% 27.41% 24.31% 11.34% 8.22%
31.69% 7.28% 5.94% 21.03% 5.83% 4.90%
11.48% 29.93% 23.30% 13.16% 10.87% 8.53%
25.42% 16.47% 13.70% 14.22% 22.74% 16.56%
49.02% 18.29% 8.34% 29.42% 15.83% 11.21%
22.68% -2.14% NA 12.43% NA NA
15.76% 74.21% 27.98% 31.03% 20.61% 15.24%
17.11% 62.53% 19.54% 20.30% 10.85% 7.24%
21.73% 8.19% 9.07% 25.48% 6.37% 4.20%
60.79% 3.12% 4.56% 26.07% 11.60% 7.81%
44.88% 8.44% 5.42% 35.22% 26.61% 18.05%
21.30% 21.34% -18.21% 12.12% -11.47% -15.91%
31.81% 16.07% 12.21% 15.48% 17.24% 12.62%
Net Margin Cap Ex/ Depreciat Non-cash WC Payout Ratio Reinvestment RSales/Capital
3.63% 54.18% -19.84% 43.75% -46.14% 1.42
6.78% 126.28% 2.89% 29.13% 14.77% 2.53
3.76% 122.22% -9.25% 18.91% 5.54% 2.40
6.72% 103.24% 17.24% 18.85% 22.13% 1.85
5.10% 96.08% 5.59% 23.74% 15.16% 3.18
3.36% 87.04% 19.37% 22.24% -22.37% 1.41
NA NA NA 33.53% 0.00% NA
NA NA NA 38.36% 0.00% NA
13.99% 87.24% 1.08% 46.35% -2.46% 0.83
9.11% 84.42% -5.83% 59.34% NA 0.97
-4.01% 48.00% 7.66% NA -106.83% 0.82
9.02% 85.32% -9.65% 18.03% -30.82% 0.71
12.46% 126.81% 9.68% 30.79% 29.24% 1.43
8.79% 104.37% 15.58% 31.68% 47.92% 1.48
8.04% 96.78% 12.60% 40.43% 12.99% 1.56
12.00% 141.73% 3.61% 33.78% 37.48% 1.22
24.78% 64.72% -11.16% 21.61% -9.05% 1.83
10.74% 103.58% -1.97% 8.61% 1.22% 2.96
9.21% 89.24% 71.65% 36.81% 1.67% 0.68
17.99% 37.39% 7.53% 49.12% -28.69% 0.89
10.73% 128.44% -11.60% 1.89% -2.56% 1.20
11.86% 131.38% -7.82% 2.83% 8.07% 2.66
8.89% 158.54% 8.98% 63.88% 56.89% 0.55
9.77% 201.07% 8.33% 66.22% 82.35% 0.54
8.53% 210.61% -0.59% 56.70% 117.43% 0.54
12.12% 86.14% 12.28% 29.40% 9.17% 1.51
4.63% 103.97% 10.63% 11.97% 18.61% 3.51
3.47% 84.23% 3.30% 6.31% -9.01% 4.05
10.12% 79.38% 1.72% 25.84% -9.30% 0.78
9.62% 78.89% -17.91% 11.57% -25.03% 1.29
7.53% 96.46% 0.48% 46.73% -0.26% 0.80
5.08% 312.33% 11.08% NA 13.38% 0.18
5.36% 139.77% 8.01% 45.25% 25.88% 1.82
1.83% 73.66% 1.47% 51.37% -39.15% 2.43
7.48% 78.63% 3.76% 49.81% -3.51% 0.79
3.76% 65.82% 13.45% 27.83% -12.43% 2.08
8.81% 58.33% 2.00% 12.22% -40.14% 1.24
8.48% 99.81% 24.35% 34.22% 94.67% 1.64
-5.64% 59.80% 76.53% NA NA 1.00
6.29% 109.45% -2.12% 40.37% -0.79% 0.69
11.66% 117.15% 4.70% 48.97% 5.97% 1.13
1.66% 69.60% 4.81% 50.59% 27.53% 6.48
3.26% 127.45% 10.25% 24.98% NA 2.26
11.94% 64.40% -1.61% 38.73% -23.97% 0.72
NA NA NA 29.39% 0.24% NA
NA 9812.35% NA 23.46% 57.73% NA
16.00% 154.37% -8.44% 0.66% 4.82% 2.25
10.59% 76.10% 2.88% 32.87% -4.73% 2.61
7.26% 75.32% 16.27% 25.38% 8.44% 1.53
 0.78% 316.85% 3.32% 25.25% 215.04% 0.35
16.64% 84.88% 22.14% 22.91% 1.50% 0.92
4.89% 78.77% 3.04% 37.29% -3.21% 4.00
4.84% 91.90% -5.59% 8.82% -25.53% 2.51
7.84% 154.15% 18.02% 25.70% 32.62% 1.36
7.36% 158.10% 6.22% 33.51% 23.26% 0.89
12.72% 297.08% -4.26% 33.81% 276.48% 0.41
5.10% 184.03% 5.53% 67.28% 49.96% 0.94
3.11% 45.60% -3.13% 14.56% -32.30% 1.23
4.07% 61.17% 6.78% 28.06% -20.89% 2.26
9.80% 280.22% -0.01% 73.98% 124.00% 0.47
10.72% 143.22% 16.89% 41.88% 70.61% 0.76
13.46% 92.61% 9.01% 24.38% 108.81% 1.48
4.63% 54.63% 10.19% 43.21% -26.89% 1.12
7.99% 192.87% 1.98% 38.99% 87.67% 1.78
10.69% 192.31% 2.28% 9.50% 64.09% 0.71
2.91% 99.52% 3.68% 20.26% 5.55% 3.56
7.11% 184.61% 0.88% 33.53% 43.79% 0.99
1.49% 181.13% 10.94% 13.75% 64.25% 0.69
30.24% 203.00% 7.21% 26.71% 62.24% 0.40
9.57% 48.46% 15.14% 11.24% 2.04% 1.38
9.18% 227.63% -3.02% 27.66% 137.37% 0.40
62.30% 554.33% 31.62% 17.28% NA 0.30
6.22% 75.65% 0.81% 25.02% -8.51% 1.37
113.55% 89.50% -10.12% 91.36% -1.96% 0.11
17.86% 175.52% -1.76% 34.63% 36.17% 0.60
7.28% 174.70% -0.96% 42.67% 50.56% 0.89
NA NA NA 15.87% 50.50% NA
10.70% 124.28% -4.82% 46.73% 8.36% 1.82
3.86% 219.62% 8.40% 19.62% 86.40% 3.00
5.56% 96.55% 3.40% 21.08% 0.99% 4.94
4.35% 140.44% 13.56% 2.49% 40.76% 2.22
5.14% 78.27% 5.88% 47.32% -6.28% 2.37
3.45% 129.02% 0.88% 29.16% 14.97% 3.55
4.16% 120.58% -0.01% 28.62% 23.06% 5.02
11.45% 86.69% 123.16% 10.93% -126.66% 0.29
17.82% 108.32% 6.93% 30.53% 5.83% 1.57
16.30% 105.87% 12.51% 11.30% 2.58% 2.21
8.44% 123.84% 16.28% 25.89% 19.07% 3.33
3.52% 66.43% 11.41% 34.26% -6.39% 1.21
7.22% 60.98% -3.38% 53.72% -21.25% 2.73
5.11% 95.55% -12.38% 43.63% -5.54% 0.83
8.50% 76.44% -7.76% 80.94% -37.32% 0.74
NA NA NA NA 0.00% NA
8.46% 64.69% -2.44% 67.56% -4.20% 1.84
7.37% 114.16% 8.55% 25.04% 13.39% 2.70
2.74% 156.92% 5.03% 41.07% 94.07% 2.16
0.55% 164.69% 7.52% 0.32% 132.29% 0.58
12.25% 250.02% 7.51% 48.16% 107.15% 0.30
7.96% 85.53% 7.62% 9.13% NA 1.14
8.32% 125.47% 7.01% 37.92% 8.65% 0.97
EV/Sales
1.14
0.93
1.78
1.19
0.59
0.73
NA
NA
3.03
4.49
1.22
2.21
1.52
1.62
1.56
1.78
3.07
1.39
2.11
2.85
4.55
1.14
2.26
2.51
2.19
1.54
0.47
0.46
1.89
1.87
2.07
6.67
1.08
0.37
1.86
0.92
3.82
1.34
1.23
2.58
2.21
0.29
0.85
2.94
NA
NA
3.91
1.75
1.37
2.69
2.52
0.73
0.68
1.67
2.47
3.37
1.45
1.31
0.55
3.56
2.38
1.06
1.06
0.87
2.20
0.53
1.97
1.48
5.33
1.64
2.85
3.43
1.15
14.13
3.44
1.60
NA
2.50
0.83
0.87
0.92
1.04
0.59
0.35
3.08
2.06
0.97
1.52
0.78
1.25
1.85
1.75
NA
2.36
1.48
1.28
1.39
4.39
1.91
1.67