• Please, compleetee TABLE 1 THRU TABLE 3, the SealTek Fittings Worksheets A, the Excel spreadsheet attached down below.

Appendix 1. SealTek Fittings, Statement of Income (millions of INR, year ending December 31) Income Item 2008 2009 2010 Sales 1,861.68 1,560.30 1,940.30 Cost ofgoods sold 1,255.12 1,160.10 1,456.70 Gross prot margin 606.56 400.20 483.60 Marketing & selling expenses 125.42 128.20 116.84 General and administrative expenses 162.66 158.29 160.82 Earnings before interest, taxes, depreciation 318.48 113.71 205.94 and amortization Depreciation expenses 50.54 58.17 62.00 Earnings before interest and taxes 267.94 55.54 143.94 Interest expenses 26.10 34.60 47.70 Earnings before taxes 241.84 20.94 96.24 Taxation expenses @ 25% 60.46 5.24 24.06 Net income 181.38 15.71 72.18 Dividends paid 60.00 60.00 60.00 Appendix 2. SealTek Fittings, Balance Sheets (millions of INR, year ending December 31) Assets 2008 2009 2010 Cash 61.20 26.40 17.40 Accounts receivable 201.21 198.78 292.91 Inventory 192.29 183.49 247.84 Prepaid expenses 34.17 38.73 32.59 Current assets 488.88 447.39 590.73 Gross fixed assets 437.24 493.44 565.94 Accumulated depreciation 98.64 156.81 218.81 Net fixed assets 338.60 336.63 347.13 Total Assets 827.48 784.02 937.86 Liabilities & Net Worth 2008 2009 2010 Accounts payable 107.05 105.27 140.48 Accrued expenses 43.71 35.78 44.18 Short-term debt 119.54 137.29 242.74 Current Liabilities 270.30 278.34 427.40 Long-term debt 127.80 120.60 113.20 Equity 429.38 385.09 397.27 Liabilities & Net Worth 827.48 784.02 937.86Appendix 3. Sales Decomposition by Region Sales by Region (millions of Rmb) 2008 2009 2010 India 484.0 530.5 776.1 Europe 279.3 187.2 194.0 Americas 446.8 312.1 310.4 Singapore/Indonesia/Korea 502.7 405.7 523.9 China 148.9 124.8 135.8 Global sales, net 1,861.7 1,560.3 1,940.3 Supplementary Data: Sales by Region (percent) 2008 2009 2010 India 26% 34% 40% Europe 15% 12% 10% Americas 24% 20% 16% Singapore/Indonesia/Korea 27% 26% 27% China 8% 8% 7% Global sales, net 100% 100% 100% Average Exchange Rate for the Period 2008 2009 2010 INR / EUR (rupees per euro) 63.54 67.27 60.59 INR / USD (rupees per US dollar) 43.43 48.34 45.67 INR / SGD (rupees per Singapore dollar) 30.65 33.24 33.53 INR/ CNY (rupees per Chinese yuan) 6.2587 7.0762 6.7470Appendix 4. Sales and Costs by Product Line (millions of Rmb, year ending December 31) Product Line Pneumatic Systems Hydraulic Systems Components Instrumentation Total Product Line Pneumatic Systems Hydraulic Systems Components Instrumentation Total Product Line Pneumatic Systems Hydraulic Systems Components Instrumentation Total Sales 707.4 844.7 223.4 86.2 1,861.7 Sales 570.3 725.9 183.6 80.5 1,560.3 Sales 670.8 950.1 219.2 100.2 1,940.3 2008 Cost of Sales 4702 542.2 179.8 62.9 1,255.1 2009 Cost of Sales 450.2 498.1 149.5 62.3 1,160.1 2010 Cost of Sales 540.6 657.3 179.5 79.3 1,456.7 Inventory 76.3 85.2 21.6 9.2 192.3 Inventory 74.3 81.9 17.9 9.4 183.5 Inventory 96.3 114.2 24.2 13.1 247.8 TABLE 2 SealTek Fittings (India) (millions of Indian rupee, INR) The Managerial Balance Sheet The Managerial Balance Sheet reduces Assets to three categories (Cash, NWC, Fixed Assets), resulting in a right-hand-side which is pure financing (short-term debt, long-term debt, and equity). 31 December 2008 Cash 61.2 9.0% Short-term debt 119.5 17.7% NWC 276.9 40.9% Long-term debt 127.8 18.9% Net fixed assets 338.6 50.0% Equity 429.4 63.5% Invested capital 676.7 100.0% 676.7 100.0% 31 December 2009 Cash 26.4 4.1% Short-term debt 137.3 21.4% NWC 279.9 43.5% Long-term debt 120.6 18.8% Net fixed assets 336.6 52.4% Equity 385.1 59.9% Invested capital 642.9 100.0% 643.0 100.0% 31 December 2010 Cash Short-term debt NWC Long-term debt Net fixed assets Equity Invested capital Note: Net working capital (NWC) = A/R + Inventories + Prepaid - A/P - Accrued. The Managerial Balance Sheet is intended to focus the analyst's attention on key asset categories and how the firm is financing those assets -- in order to make a clear distinction between operations (assets) and financing (the funding of those assets). Net working capital (NWC) = (A/R + Inventory + Prepaid) - (A/P + Accrued)W SealTek Fittings (India) (millions of Indian rupee, INR) Product Line Sales Cost of Sales Inventory Gross Margin Days Inventory Pneumatic Systems 707.4 470.2 76.3 33.5% 59.2 Hydraulic Systems 844.7 542.2 85.2 35.8% 57.4 Components 223.4 179.8 21.6 19.5% 43.8 Instrumentation 86.2 62.9 9.2 27.0% 53.4 Total 1,861.7 1,255.1 192.3 32.6% 55.9 Product Line Sales Cost of Sales Inventory Gross Margin Days Inventory Pneumatic Systems 570.3 450.2 74.3 21.1% 60.2 Hydraulic Systems 725.9 498.1 81.9 31.4% 60.0 Components 183.6 149.5 17.9 18.6% 43.7 Instrumentation 80.5 62.3 9.4 22.6% 55.1 Total 1,560.3 1,160.1 183.5 25.6% 57.7 Product Line Sales Cost of Sales Inventory Gross Magin Days Inventory Pneumatic Systems 670.8 540.6 96.3 19.4% Hydraulic Systems 950.1 657.3 1 14.2 30.8% Components 219.2 179.5 24.2 18.1% Instrumentation 100.2 79.3 13.1 20.9% Total 1,940.3 1,456.7 247.8 24.9% Financial managers of real companies must understand that the sales and protability of different products and services within the company's portfolio will differ. Whether the rm may or can choose to reduce or rationalize their portfolio depends on a number of factors including the demands of customers and interrelationships between products and services offered. Regardless, in the end, the firm must still manage its own inventory in order to manage its me: writing capital . TABLE 1 SealTek Fittings (India) (millions of Indian rupee, INR) THE PROFIT AND LOSS STATEMENT (P&L) 2008 2009 2010 Sales revenues (net) 1,861.7 100.0% 1,560.3 100.0% 1.940.3 100.0% Cost of goods sold (COGS) (1,255.1) -67.4% (1,160.1) Gross profit 606.6 32.6% 400.2 Marketing and selling expenses (125.4) -6.7% (128.2) General & administrative expenses (162.7) -8.7% (158.3) Operating profit EBITDA 318.5 17.1% 113.7 Below The Line Depreciation expense (50.5) -2.7% (58.2) Earnings before interest & tax EBIT 268.0 14.4% 55.5 Interest expense (26.1) -1.4% (34.6) Earnings before taxes EBT 241.9 13.0% 20.9 Tax expenses (60.5) -3.2% (5.2) Net income NI or EAT 181.4 9.7% 15.7 NOTES Profit Distribution: Dividends paid 60.0 60.0 60.0 Retained earnings 121.4 (44.3) Sales growth 12% 16% Currency: INR/USD 43.43 48.34 45.67 Sales (millions of US$) 42.9 32.3 Net income (millions of US$) 4.2 0.3 Many companies use the financial results above the line, EBITDA, as a metric of managerial performance. This is because the principle components below the line , depreciation, interest, taxes, are all driven by financial and accounting activities largely controlled by corporate and are therefore not under the discretion or direction of business unit management. According to financial theory, value is created by the firm by generating larger and growing results from EBITDA growth -- the financial results of the business of the firm, and not from the financial or accounting practices as seen below EBITDA