Evaluate the company's financial ratio performance through June 2007, and for the six months ending December 2007. (You may use any meaningful ratios to conduct the analysis which identifies underlying financial issues for ABC learning).

Exhibit 4. ABC Learning Centres Limited 2007 Financial Statement Income Statement for the financial year ended 30 June 2007 Company 2007 $Am 132.8 7.9 140.7 2006 $Am 67.5 67.5 (9.1) (7.6) (1.0) (72.7) (1.0) (19.5) Consolidated 2007 2006 $Am $Am Revenue from continuing operations 1,659.0 768.7 Other income 37.4 22.1 Total Income 1,696.4 790.8 Changes in inventories of finished goods (14.7) Employee benefits (912.4) (405.6) Depreciation and amortisation (38.9) (14.3) Impairment (1.0) (11.3) Finance costs (92.2) (22.8) Rental and other property expenses (256.3) (117.8) Children catering and consumables (64.4) (27.0) Advertising and promotions (16.4) (8.8) Insurances (13.5) (6.1) Communication (11.6) (4.9) Travel and motor vehicle expenses (21.3) (6.9) Net foreign exchange losses (5.1) Other expenses (55.9) (29.9) Profit before income tax expense 197.8 120.7 Income tax (expense)/benefit (54.7) (39.2) Profit attributable to members of the parent entity 143.1 81.5 Earnings per share: Basic (cents per share) 36.0 27.8 Diluted (cents per share) 36.0 27.8 The above income statement should be read in conjunction with the accompanying notes. (0.5) (0.3) (0.1) (21.0) (1.9) 34.4 7.4 41.8 (1.2) 37.9 (4.2) 33.7 Balance Sheet as at 30 June 2007 Consolidated 2007 $$Am 2006 $Am Company 2007 $Am 2006 $Am Current assets Cash and cash equivalents Trade and other receivables Other financial assets Inventories Other 132.5 112.7 68.8 34.1 54.9 57.6 40.5 227.8 66.1 54.9 0.7 30.4 379.9 12.0 391.9 5.5 17.6 268.3 7.6 275.9 0.3 158.1 0.2 98.3 158.1 98.3 3,004.9 0.9 4.3 120.2 549.6 110.0 2,891.1 3,675.2 4,067.1 3.0 63.6 248.6 34.7 1.530.8 1,880.7 2.156.6 1,765.9 1.6 8.8 11.8 3,017.6 3,175.7 1,776.3 1,874.6 Noncurrent assets classified as held for sale Total current assets Noncurrent assets Trade and other receivables Other financial assets Property, plant and equipment Deferred tax assets Intangible assets Total noncurrent assets Total assets Current liabilities Trade and other payables Borrowings Current tax liabilities Provisions Total current liabilities Noncurrent liabilities Other payables Borrowings Deferred tax liabilities Provisions Total noncurrent liabilities Total liabilities Net assets 11.5 272.5 1,149.7 12.3 19.4 1,453.9 121.4 8.1 14.1 9.5 153.1 42.3 808.3 9.6 13.4 860.2 24.9 210.1 583.1 2.3 12.3 610.4 87.4 1.5 711.6 2,165.5 1.901.6 16.3 235.9 20.8 2.0 275.0 428.1 1,728.5 585.4 1,445.6 1,730.1 210.1 235.0 1,639.6 Equity Issued capital Reserves Retained earnings Total equity 1,744.5 (15.4) 172.5 1.901.6 1,635.0 1.0 92.5 1.728.5 1,744.5 2.8 (17.2) 1,730.1 1,635.0 0.5 4.1 1,639.6 BALANCE SHEET CONSOLIDATED AS AT 31 DECEMBER 2007 Consolidated 31 Dec 2007 30 Jun 2007 $A'm SA'm Current assets Cash and cash equivalents Trade and other receivables Other financial assets Inventories Current tax assets Other 227.8 66.1 54.9 0.7 135.1 140.7 26.0 2.2 5.0 53.2 362.2 179.9 542.1 30.4 379.9 12.0 391.9 4.0 120.8 657.2 115.8 3,055.2 33.0 3,986.0 4,528.1 4.3 120.2 549.6 110.0 2,891.1 3,675.2 4,067.1 272.5 Non-current assets classified as held for sale Total current assets Noncurrent assets Trade and other receivables Other financial assets Property, plant and equipment Deferred tax assets Intangible assets Other Total non-current assets Total assets Current liabilities Trade and other payables Financial liabilities Borrowings Current tax liabilities Provisions Total current liabilities Noncurrent liabilities Other payables Financial liabilities Borrowings Deferred tax liabilities Provisions Total noncurrent liabilities Total liabilities Net assets 312.5 3.3 4.4 19.6 339.8 1,149.7 12.3 19.4 1,453.9 12.3 17.3 14.9 1,808.1 96.0 28.9 1.965.2 2,305.0 2,223.1 610.4 87.4 1.5 7116 2,165.5 1.901.6 Equity Issued capital Reserves Retained earnings Parent entity interest Minority interest Total equity The above income statement should be read in conjunction with the accompanying note. 2,185.6 (129.9) 167.4 2,223.1 1,744.5 (15.4) 172.5 1,901.6 2,223.1 1.901.6 Exhibit 6. ABC Learning Centres Limited Interim Financial StatementsDecember 31, 2007 INCOME STATEMENT CONSOLIDATED FOR THE HALF-YEAR ENDED 31 DECEMBER 2007 Revenue from operations Other income Total revenue Consolidated 2007 2006 $A'm SA'm 1,023.3 657.3 83.6 10.5 1,106.9 667.8 Changes in inventories of finished goods Employee benefits Depreciation and amortisation Impairment Finance costs Rental and other property expenses Children catering and consumables Advertising and promotions Insurances Communication Travel and motor vehicle expenses Change in fair value of financial assets (listed shares) Other expenses Profit before income tax expense Income tax (expense)/benefit Profit for the period (615.9) (34.2) (1.2) (80.6) (167.9) (46.1) (8.4) (7.7) (7.5) (15.2) (36.2) (36.5) 49.5 (12.4) 37.1 (9.6) (351.7) (14.0) (0.5) (22.2) (106.8) (25.4) (7.6) (4.7) (4.0) (7.7) (0.1) (20.0) 93.5 (29.6) 63.9 Attributable to: Equity holders of the parent Minority interest 37.1 63.9 37.1 63.9 Earnings per share: Basic (cents per share) Diluted (cents per share) The above income statement should be read in conjunction with the accompanying note. 7.9 7.9 16.2 16.2 Exhibit 4. ABC Learning Centres Limited 2007 Financial Statement Income Statement for the financial year ended 30 June 2007 Company 2007 $Am 132.8 7.9 140.7 2006 $Am 67.5 67.5 (9.1) (7.6) (1.0) (72.7) (1.0) (19.5) Consolidated 2007 2006 $Am $Am Revenue from continuing operations 1,659.0 768.7 Other income 37.4 22.1 Total Income 1,696.4 790.8 Changes in inventories of finished goods (14.7) Employee benefits (912.4) (405.6) Depreciation and amortisation (38.9) (14.3) Impairment (1.0) (11.3) Finance costs (92.2) (22.8) Rental and other property expenses (256.3) (117.8) Children catering and consumables (64.4) (27.0) Advertising and promotions (16.4) (8.8) Insurances (13.5) (6.1) Communication (11.6) (4.9) Travel and motor vehicle expenses (21.3) (6.9) Net foreign exchange losses (5.1) Other expenses (55.9) (29.9) Profit before income tax expense 197.8 120.7 Income tax (expense)/benefit (54.7) (39.2) Profit attributable to members of the parent entity 143.1 81.5 Earnings per share: Basic (cents per share) 36.0 27.8 Diluted (cents per share) 36.0 27.8 The above income statement should be read in conjunction with the accompanying notes. (0.5) (0.3) (0.1) (21.0) (1.9) 34.4 7.4 41.8 (1.2) 37.9 (4.2) 33.7 Balance Sheet as at 30 June 2007 Consolidated 2007 $$Am 2006 $Am Company 2007 $Am 2006 $Am Current assets Cash and cash equivalents Trade and other receivables Other financial assets Inventories Other 132.5 112.7 68.8 34.1 54.9 57.6 40.5 227.8 66.1 54.9 0.7 30.4 379.9 12.0 391.9 5.5 17.6 268.3 7.6 275.9 0.3 158.1 0.2 98.3 158.1 98.3 3,004.9 0.9 4.3 120.2 549.6 110.0 2,891.1 3,675.2 4,067.1 3.0 63.6 248.6 34.7 1.530.8 1,880.7 2.156.6 1,765.9 1.6 8.8 11.8 3,017.6 3,175.7 1,776.3 1,874.6 Noncurrent assets classified as held for sale Total current assets Noncurrent assets Trade and other receivables Other financial assets Property, plant and equipment Deferred tax assets Intangible assets Total noncurrent assets Total assets Current liabilities Trade and other payables Borrowings Current tax liabilities Provisions Total current liabilities Noncurrent liabilities Other payables Borrowings Deferred tax liabilities Provisions Total noncurrent liabilities Total liabilities Net assets 11.5 272.5 1,149.7 12.3 19.4 1,453.9 121.4 8.1 14.1 9.5 153.1 42.3 808.3 9.6 13.4 860.2 24.9 210.1 583.1 2.3 12.3 610.4 87.4 1.5 711.6 2,165.5 1.901.6 16.3 235.9 20.8 2.0 275.0 428.1 1,728.5 585.4 1,445.6 1,730.1 210.1 235.0 1,639.6 Equity Issued capital Reserves Retained earnings Total equity 1,744.5 (15.4) 172.5 1.901.6 1,635.0 1.0 92.5 1.728.5 1,744.5 2.8 (17.2) 1,730.1 1,635.0 0.5 4.1 1,639.6 BALANCE SHEET CONSOLIDATED AS AT 31 DECEMBER 2007 Consolidated 31 Dec 2007 30 Jun 2007 $A'm SA'm Current assets Cash and cash equivalents Trade and other receivables Other financial assets Inventories Current tax assets Other 227.8 66.1 54.9 0.7 135.1 140.7 26.0 2.2 5.0 53.2 362.2 179.9 542.1 30.4 379.9 12.0 391.9 4.0 120.8 657.2 115.8 3,055.2 33.0 3,986.0 4,528.1 4.3 120.2 549.6 110.0 2,891.1 3,675.2 4,067.1 272.5 Non-current assets classified as held for sale Total current assets Noncurrent assets Trade and other receivables Other financial assets Property, plant and equipment Deferred tax assets Intangible assets Other Total non-current assets Total assets Current liabilities Trade and other payables Financial liabilities Borrowings Current tax liabilities Provisions Total current liabilities Noncurrent liabilities Other payables Financial liabilities Borrowings Deferred tax liabilities Provisions Total noncurrent liabilities Total liabilities Net assets 312.5 3.3 4.4 19.6 339.8 1,149.7 12.3 19.4 1,453.9 12.3 17.3 14.9 1,808.1 96.0 28.9 1.965.2 2,305.0 2,223.1 610.4 87.4 1.5 7116 2,165.5 1.901.6 Equity Issued capital Reserves Retained earnings Parent entity interest Minority interest Total equity The above income statement should be read in conjunction with the accompanying note. 2,185.6 (129.9) 167.4 2,223.1 1,744.5 (15.4) 172.5 1,901.6 2,223.1 1.901.6 Exhibit 6. ABC Learning Centres Limited Interim Financial StatementsDecember 31, 2007 INCOME STATEMENT CONSOLIDATED FOR THE HALF-YEAR ENDED 31 DECEMBER 2007 Revenue from operations Other income Total revenue Consolidated 2007 2006 $A'm SA'm 1,023.3 657.3 83.6 10.5 1,106.9 667.8 Changes in inventories of finished goods Employee benefits Depreciation and amortisation Impairment Finance costs Rental and other property expenses Children catering and consumables Advertising and promotions Insurances Communication Travel and motor vehicle expenses Change in fair value of financial assets (listed shares) Other expenses Profit before income tax expense Income tax (expense)/benefit Profit for the period (615.9) (34.2) (1.2) (80.6) (167.9) (46.1) (8.4) (7.7) (7.5) (15.2) (36.2) (36.5) 49.5 (12.4) 37.1 (9.6) (351.7) (14.0) (0.5) (22.2) (106.8) (25.4) (7.6) (4.7) (4.0) (7.7) (0.1) (20.0) 93.5 (29.6) 63.9 Attributable to: Equity holders of the parent Minority interest 37.1 63.9 37.1 63.9 Earnings per share: Basic (cents per share) Diluted (cents per share) The above income statement should be read in conjunction with the accompanying note. 7.9 7.9 16.2 16.2