California Choppers

I.Exhibits

CALIFORNIA CHOPPERS RATIO TABLE

2001 2002 2003 2004 2005 Ind.Av.

Liquidity

Current Ratio 1.37 1.48 1.64 1.33 1.04 1.25

Cash Ratio 0.19 0.20 0.31 0.25 0.15 0.27

Asset Management

Inventory Turnover in Days 138.26 59.54 51.70 33.03 43.66 44.12

A/R Turnover in Days 59.16 42.69 39.28 42.69 42.30 32.45

A/P Turnover in Days 157.33 80.75 71.71 79.18 109.94 60.23

Cash Conversion Cycle 40.09 21.48 19.27 -3.46 -23.98 16.35

Fixed Assets Turnover 1.85 3.94 4.46 4.46 4.05 3.72

Total Asset Turnover 0.95 1.88 2.03 2.17 2.00 2.05

Long-term Debt Paying Ability

Debt Ratio 0.93 0.84 0.73 0.64 0.65 0.54

Times Interest Earned 1.23 2.62 3.54 3.42 3.06 9.33

Profitability

Gross Margin 30% 30% 29% 27% 26% 32.00%

Operating Profit Margin 5% 13% 11% 8% 5% 14.00%

Net Profit Margin 0.65% 5% 5% 4% 2% 8.50%

ROA 3.3% 16% 15% 11% 6% 17.46%

ROE 9% 63% 41% 22% 12% 38.25%

ANALYSIS OF ROE— 5-WAY

EBIT/Sales EBT/EBIT NI/EBT Tatal Asset Turnover Debt Ratio ROE

2001 0.0514 0.19 0.679 0.95 0.93 0.09

2002 0.128 0.618 0.68 1.88 0.84 0.63

2003 0.1102 0.718 0.68 2.03 0.73 0.41

2004 0.075 0.708 0.68 2.17 0.64 0.22

2005 0.046 0.673 0.68 2.00 0.65 0.12

According to the formulas given by the case we can calculate the data, take year 2001 as example:

Current ratio=current assets/current liabilities=148.76/108.82=1.37

Cash ratio=(cash+marketable securities)/current liabilities=20.56/108.82=0.19

Inventory turnover=cost of goods sold/average inventories=210.45/79.66=2.64

Inventory turnover in days=365/inventory turnover=365/2.64=138.26

A/R turnover=net credit sales/average accounts receivable=299.45/48.54-6.17

A/R turnover in days=365/A/R turnover=365/6.17=59.16

A/P turnover=cost of goods sold/average accounts payable=210.45/90.13=2.32

A/P turnover in days=365/A/P turnover=365/2.32=157.33

Cash conversion cycle=inventory turnover in days-A/P turnover in days+A/R turnover in days=138.26-157.33+59.16=40.09...