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A2 Corporation Limited

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A2 Corporation Limited

TABLE OF CONTENTS

1 A2 Corporation Limited .......................................................................................................................... 5

2 A2 Corporation Limited - Key Employees .............................................................................................. 6

3 A2 Corporation Limited - Major Products and Services ........................................................................ 7

4 A2 Corporation Limited - Key Events .................................................................................................... 8

5 A2 Corporation Limited - Locations and Subsidiaries........................................................................... 9

5.1 A2 Corporation Limited - Head Office .................................................................................................................... 9

5.2 A2 Corporation Limited - Other Locations and Subsidiaries ................................................................................... 9

6 A2 Corporation Limited - Business Analysis ....................................................................................... 10

6.1 A2 Corporation Limited - Company Overview ...................................................................................................... 10

7 A2 Corporation Limited - Company Financial Analysis ....................................................................... 11

7.1 A2 Corporation Limited - Five Year Snapshot: Overview of Financial and Operational Performance Indicators .... 11

8 A2 Corporation Limited - Interim ratios ............................................................................................... 13

8.1.1 A2 Corporation Limited - Financial ratios: Capital Market Ratios .................................................................. 13

8.2 A2 Corporation Limited - Financial Performance and Ratio Charts ...................................................................... 14

8.2.1 A2 Corporation Limited - Revenue and Operating margin ............................................................................ 14

8.2.2 A2 Corporation Limited - Asset and Liabilities .............................................................................................. 15

8.2.3 A2 Corporation Limited - Solvency............................................................................................................... 16

8.2.4 A2 Corporation Limited - Valuation .............................................................................................................. 17

8.3 A2 Corporation Limited - Key Competitors........................................................................................................... 18

9 A2 Corporation Limited - Mergers & Acquisitions and Partnerships .................................................. 19

9.1 A2 Corporation Limited - M&A and Partnerships Strategy.................................................................................... 19

10 Appendix .............................................................................................................................................. 20

10.1 Methodology ....................................................................................................................................................... 20

10.2 A2 Corporation Limited - Ratio Definitions ........................................................................................................... 20

10.3 Disclaimer........................................................................................................................................................... 25

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A2 Corporation Limited

List of Tables

Table 1: A2 Corporation Limited - Key Employees ............................................................................................................... 6

Table 2: A2 Corporation Limited - Major Products and Services........................................................................................... 7

Table 3: A2 Corporation Limited - Key Events ..................................................................................................................... 8

Table 4: A2 Corporation Limited - Subsidiaries .................................................................................................................... 9

Table 5: A2 Corporation Limited - Annual ratios ................................................................................................................. 11

Table 6: A2 Corporation Limited - Interim ratios ................................................................................................................. 13

Table 7: A2 Corporation Limited - Capital Market Ratios .................................................................................................... 13

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A2 Corporation Limited

List of Figures

Figure 1: A2 Corporation Limited - Revenue and Operating Profit ...................................................................................... 14

Figure 2: A2 Corporation Limited - Financial Position ......................................................................................................... 15

Figure 3: A2 Corporation Limited - Solvency ...................................................................................................................... 16

Figure 4: A2 Corporation Limited - Valuation ..................................................................................................................... 17

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A2 Corporation Limited

1 A2 Corporation Limited

Fast Facts

Headquarters Address PO Box 109349 ,Newmarket

,Auckland,1049,New Zealand

Telephone +64 9 9729802

Fax N/A

Website thea2milkcompany.com

Ticker Symbol , Exchange Name ATM,New Zealand Exchange Limited

Number of Employees N/A

Fiscal Year End June

Revenue (US$ million) 91

Share Data

Share price (US$) as on 30 Oct 2014 0.5

EPS (US$) 0.00

Market Capitalization (US$ million) 330

Enterprise Value (US$ million) 317

Shares outstanding (million) 660

Financial Snapshot

Operating Performance

Revenue and Margins

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A2 Corporation Limited

2 A2 Corporation Limited - Key Employees

Table 1: A2 Corporation Limited - Key Employees

Name Job Title Board Level Since Age

C J Cook Chairman Executive Board

D W Mair Director Executive Board

G H Babidge Managing Director, Director Executive Board

G P Hinton Director Executive Board

P R Gunner Deputy Chairman Executive Board

M Miles Director Non Executive Board

R Le Grice Director Non Executive Board

Source: Canadean

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A2 Corporation Limited

3 A2 Corporation Limited - Major Products and Services

The a2 Milk Company Limited is a provider of dairy products. Key products and brands offered by the company include the following:

Table 2: A2 Corporation Limited - Major Products and Services

Products:

Milk

Natural Yoghourt

Brand:

a2 Milk

Source: Canadean

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A2 Corporation Limited

4 A2 Corporation Limited - Key Events

Table 3: A2 Corporation Limited - Key Events

Year Event type Description

2014

Contracts/Agreements

The company partnered with the Robert Wiseman Dairies to develop a range of A2 milk products aimed at people who find milk hard to digest.

Source: Canadean

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A2 Corporation Limited

5 A2 Corporation Limited - Locations and Subsidiaries

5.1 A2 Corporation Limited - Head Office

A2 Corporation Limited

PO Box 109349

Newmarket

Auckland

Zip: 1049

New Zealand

Tel: + 64 9 9729802

5.2 A2 Corporation Limited - Other Locations and Subsidiaries

Table 4: A2 Corporation Limited - Subsidiaries

A2 Dairy Products Australia Pty Ltd

80 Box Rd

Botany

Sydney

Australia

Tel: + 61 1300 645522

Zip: 1455

Source: Canadean

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A2 Corporation Limited

6 A2 Corporation Limited - Business Analysis

6.1 A2 Corporation Limited - Company Overview

The a2 Milk Company Limited (a2 Milk Company), formerly A2 Corporation Limited, is a provider of dairy products. The company owns and commercializes property relating to a2 Milk. It commercializes patents, trademarks, and proprietary processes of a2 Milk products. a2 Milk Company offers natural and additive free dairy milk. The company markets its products under the brand of a2 Milk. It also sources and supplies A2 milk in Australia. a2 Milk Company operates through its subsidiaries including A2 Holdings UK Limited, A2 Australian Investments Pty Limited, A2 Exports Australia Pty Limited, A2 Milk Company LLC, and A2 Infant Nutrition Limited, among others. It has presence in New Zealand, Australia, China, the UK, and the US. a2 Milk Company is headquartered in Auckland, New Zealand.

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A2 Corporation Limited

7 A2 Corporation Limited - Company Financial Analysis

7.1 A2 Corporation Limited - Five Year Snapshot: Overview of Financial and Operational Performance Indicators

The company reported revenue of US$91 million during the fiscal year 2014 (2014). The company's revenue grew at a CAGR of 304.57% during 2010–2014, with an annual growth of 17.30% over 2013. During 2014, operating margin of the company was 1.88% in comparison with operating margin of 9.42% in 2013. In 2014, the company recorded a net profit margin of 0.01% compared to a net profit margin of 4.37% in 2013.

Table 5: A2 Corporation Limited - Annual ratios

Key Ratios Unit/Currency 2014 2013 2012 2011 2010

Equity Ratios

EPS (Earnings per Share) NZD 0.01 0.01 -0.01

Book Value per Share NZD 0.09 0.09 0.06 0.04 0.02

Cash Value per Share NZD 0.02 0.03 0.01 0.01 0.01

Profitability Ratios

Gross Margin % 36 35.66 32.67 36.03

Operating Margin % 1.88 9.42 7.59 6.43 -466.36

Net Profit Margin % 0.01 4.37 6.88 4.99 -466.36

Profit Markup % 56.24 55.44 50.39 56.7

PBT Margin (Profit Before Tax) % 0.65 5.48 6.43 6.74 -466.36

Return on Equity % 0.02 6.87 11.79 8.4 -30.19

Return on Capital Employed % 3.54 14.8 13 10.8 -30.19

Return on Assets % 0.01 5.69 8.87 6.47 -26.52

Return on Fixed Assets % 8.16 35.96 19.63 21.22 -79.93

Return on Working Capital % 6.26 25.16 38.5 21.99 -48.52

Growth Ratios

Sales Growth % 17.3 50.99 47.98 -100

Operating Income Growth % -76.57 82.74 78.39

EBITDA Growth % -86.06 25.4 44.04

Net Income Growth % -99.76 -6.47 108.18

EPS Growth % -83.58 -0.81 81.66

Working Capital Growth % -5.8 179.63 1.9 174.05 -35.04

Cost Ratios

Operating Costs (% of Sales) % 98.12 90.58 92.41 93.57 566.36

Administration Costs (% of Sales) % 19.82 13.49 16.27 17.16 400.81

Liquidity Ratios

Current Ratio Absolute 2.86 3.85 2.03 2.65 5.5

Quick Ratio Absolute 2.55 3.79 1.97 2.6 5.5

Cash Ratio Absolute 0.89 1.63 0.53 1 5.19

Leverage Ratios

Debt to Equity Ratio Absolute 0.12 0.03

Net Debt to Equity Absolute -0.27 -0.34 -0.06 -0.27 -0.72

Debt to Capital Ratio Absolute 0.12 0.03

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A2 Corporation Limited

Table 5: A2 Corporation Limited - Annual ratios

Key Ratios Unit/Currency 2014 2013 2012 2011 2010

Efficiency Ratios

Asset Turnover Absolute 1.44 1.3 1.29 1.3 0.06

Fixed Asset Turnover Absolute 12.07 9.16 5.83 18.38 174.24

Inventory Turnover Absolute 12.68 81.77 61.35 63.53

Current Asset Turnover Absolute 2.16 1.98 2.57 2.13 0.09

Capital Employed Turnover Absolute 1.89 1.57 1.71 1.68 0.06

Working Capital Turnover Absolute 3.33 2.67 5.07 3.42 0.1

Capex to Sales % 2.63 3.52 15.82 5.43

R&D to Sales % 0.23

Source: Canadean

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A2 Corporation Limited

8 A2 Corporation Limited - Interim ratios

Table 6: A2 Corporation Limited - Interim ratios

Key Ratios Unit/Currency Jun-2014 Dec-2013 Jun-2013 Dec-2012

Equity Ratios

Interim EPS (Earnings per Share) NZD 0

Book Value per Share NZD 0.09 0.09 0.09 0.09

Profitability Ratios

Gross Margin % 35.13 36.9 37.78 33.27

Operating Margin % 0.2 3.64 13.57 4.73

Net Profit Margin % -1.12 1.19 7.13 1.25

Profit Markup % 54.16 58.48 60.73 49.86

PBT Margin (Profit Before Tax) % 0.2 1.12 9.09 1.39

Cost Ratios

Operating Costs (% of Sales) % 99.8 96.36 86.43 95.27

Administration Costs (% of Sales) % 20.4 19.2 13.3 13.71

Liquidity Ratios

Current Ratio Absolute 2.86 3.73 3.85 3.78

Quick Ratio Absolute 2.55 3.6 3.79 3.73

Leverage Ratios

Debt to Equity Ratio Absolute 0

Net Debt to Equity Absolute -0.27 -0.22 -0.34 -0.33

Debt to Capital Ratio Absolute 0

Source: Canadean

8.1.1 A2 Corporation Limited - Financial ratios: Capital Market Ratios

Table 7: A2 Corporation Limited - Capital Market Ratios

Key Ratios Value

P/E (Price/Earnings) Ratio 30500

EV/EBITDA (Enterprise Value/Earnings Before Interest, Taxes, Depreciation and Amortization) 537.03

Enterprise Value/Sales 3.5

Enterprise Value/Operating Profit 185.81

Enterprise Value/Total Assets 5.04

Dividend Yield 0

Note: Above ratios are based on share price as of 30-Oct-2014. The above ratios are absolute numbers.

Source: Canadean

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A2 Corporation Limited

8.2 A2 Corporation Limited - Financial Performance and Ratio Charts

8.2.1 A2 Corporation Limited - Revenue and Operating margin

The consolidated group revenue of the company for 2014 stood at US$91 million, which corresponds to a growth rate of 17.31% over the previous year. The operating margin of the company was 1.88% in 2014, a decrease of 754.00 basis points over the previous year.

Figure 1: A2 Corporation Limited - Revenue and Operating Profit

Source: Canadean

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A2 Corporation Limited

8.2.2 A2 Corporation Limited - Asset and Liabilities

The company's assets grew 5.85% over the previous year to US$63 million in 2014. The company's liabilities grew 44.18% over the previous year to US$15 million in 2014. The company's asset to liability ratio reduced from 5.80 in 2013 to 4.26 in 2014.

Figure 2: A2 Corporation Limited - Financial Position

Source: Canadean

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A2 Corporation Limited

8.2.3 A2 Corporation Limited - Solvency

In 2014, the company's current ratio declined to 2.86 from the previous year's current ratio of 3.85. The company’s quick ra tio declined to 2.55 in 2014 from the previous year's quick ratio of 3.79. In 2014, the company’s debt ratio remained unchanged at 0.00.

Figure 3: A2 Corporation Limited - Solvency

Source: Canadean

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A2 Corporation Limited

8.2.4 A2 Corporation Limited - Valuation

As of 30-Oct-2014, the company recorded an EV/EBIT of 185.81, EV/Total Assets of 5.04 and EV/Sales of 3.50.

Figure 4: A2 Corporation Limited - Valuation

Source: Canadean

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A2 Corporation Limited

8.3 A2 Corporation Limited - Key Competitors

The following companies are the major competitors of A2 Corporation Limited: Bega Cheese Limited (Ticker: BGA)

Dairy Farmers

Fonterra Co-operative Group Limited

Speirs Group Limited (Ticker: SGL)

Synlait Milk Ltd.

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A2 Corporation Limited

9 A2 Corporation Limited - Mergers & Acquisitions and Partnerships

9.1 A2 Corporation Limited - M&A and Partnerships Strategy

Robert Wiseman Dairies forms joint venture with A2 Corporation

Deal Type Partnership Deal Sub Type Joint Venture

Deal Status Completed Announced Date 11/14/2011 12:00:00 AM

Deal in Brief

Robert Wiseman Dairies PLC, a UK-based milk and associated products processer and distributer, has entered into a joint venture agreement with A2 Corporation Limited, a New Zealand-based dairy products provider, to introduce a range of A2 milk products in the UK and Ireland. Under the agreement, Robert Wiseman and A2 will establish a sales and marketing joint venture. Th e joint venture will be engaged in the sourcing, processing, marketing and sale of A2 milk products.

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A2 Corporation Limited

10 Appendix

10.1 Methodology

Canadean company reports are based on a core set of research techniques which ensure the best possible level of quality

and accuracy of data. The key sources used include:

Company Websites

Company Annual Reports

SEC Filings

Press Releases

Proprietary Databases

Notes

Financial information of the company is taken from the most recently published annual reports or SEC filings

The financial and operational data reported for the company is as per the industry defined standards

Revenue converted to US$ at average annual conversion rate as of fiscal year end

10.2 A2 Corporation Limited - Ratio Definitions

Capital Market Ratios

Capital Market Ratios measure investor response to owning a company's stock and also the cost of issuing stock.

Price/Earnings Ratio (P/E)

Price/Earnings (P/E) ratio is a measure of the price paid for a share relative to the annual income earned per share. It is a financial ratio used for valuation: a higher P/E ratio means that investors are paying more for each unit of income, so the stock is more expensive compared to one with lower P/E ratio. A high P/E suggests that investors are expecting higher earnings growth in the future compared to companies with a lower P/E. Price per share is as of previous business close, and EPS is from latest annual report.

Formula: Price per Share / Earnings per Share

Enterprise Value/Earnings before Interest, Tax, Depreciation & Amortization (EV/EBITDA)

Enterprise Value/EBITDA (EV/EBITDA) is a valuation multiple that is often used in parallel with, or as an alternative to, the P/E ratio. The main advantage of EV/EBITDA over the PE ratio is that it is unaffected by a company's capital structure. It compares the value of a business, free of debt, to earnings before interest. Price per share is as of previous business close, and shares outstanding last reported. Other items are from latest annual report.

Formula: (Market Cap + Debt + Preferred Stock - Cash & Cash Equivalents) / (Net Income + Interest + Tax + Depreciation + Amortization)

Enterprise Value/Sales

Enterprise Value/Sales (EV/Sales) is a ratio that provides an idea of how much it costs to buy the company's sales. EV/Sales is seen as more accurate than Price/Sales because market capitalization does not take into account the amount of debt a company has, which needs to be paid back at some point. Price per share is as of previous business close, and shares outstanding last reported. Other items are from latest annual report.

Formula: (Market Cap + Debt + Preferred Stock - Cash & Cash Equivalents) / Sales

Enterprise Value/Operating Profit

Enterprise Value/Operating Profit measures the company's enterprise value to the operating profit. Price per share is as of previous business close, and shares outstanding last reported. Other items are from latest annual report.

Formula: (Market Cap + Debt + Preferred Stock - Cash & Cash Equivalents) / Operating Income

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A2 Corporation Limited

Enterprise Value/Total Assets

Enterprise Value/Total Assets measures the company's enterprise value to the total assets. Price per share is as of previous business close, and shares outstanding last reported. Other items are from latest annual report.

Formula: (Market Cap + Debt + Preferred Stock - Cash & Cash Equivalents) / Total Assets

Dividend Yield

Dividend Yield shows how much a company pays out in dividends each year relative to its share price. In the absence of any capital gains, the dividend yield is the return on investment for a stock.

Formula: Annual Dividend per Share / Price per Share

Equity Ratios

These ratios are based on per share value.

Earnings per Share (EPS)

Earnings per share (EPS) is the portion of a company's profit allocated to each outstanding share of common stock. EPS serves as an indicator of a company's profitability.

Formula: Net Income / Weighted Average Shares

Dividend per Share

Dividend is the distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.

Dividend Cover

Dividend cover is the ratio of company's earnings (net income) over the dividend paid to shareholders.

Formula: Earnings per share / Dividend per share

Book Value per Share

Book Value per Share measure used by owners of common shares in a firm to determine the level of safety associated with each individual share after all debts are paid accordingly.

Formula: (Shareholders Equity - Preferred Equity) / Outstanding Shares

Cash Value per Share

Cash Value per Share is a measure of a company's cash (cash & equivalents on the balance sheet) that is determined by dividing cash & equivalents by the total shares outstanding.

Formula: Cash & equivalents / Outstanding Shares

Profitability Ratios

Profitability Ratios are used to assess a company's ability to generate earnings, based on revenues generated or resources used. For most of these ratios, having a higher value relative to a competitor's ratio or the same ratio from a previous period is indicative that the company is doing well.

Gross Margin

Gross margin is the amount of contribution to the business enterprise, after paying for direct- fixed and direct variable unit costs.

Formula: {(Revenue-Cost of revenue) / Revenue}*100

Operating Margin

Operating Margin is a ratio used to measure a company's pricing strategy and operating efficiency.

Formula: (Operating Income / Revenues) *100

Net Profit Margin

Net Profit Margin is the ratio of net profits to revenues for a company or business segment - that shows how much of each dollar earned by the company is translated into profits.

Formula: (Net Profit / Revenues) *100

A2 Corporation Limited

Profit Markup

Profit Markup measures the company's gross profitability, as compared to the cost of revenue.

Formula: Gross Income / Cost of Revenue

PBIT Margin (Profit Before Interest & Tax)

Profit Before Interest & Tax Margin shows the profitability of the company before interest expense & taxation.

Formula: {(Net Profit + Interest + Tax) / Revenue} *100

PBT Margin (Profit Before Tax)

Profit Before Tax Margin measures the pre-tax income over revenues.

Formula: {Income Before Tax / Revenues} *100

Return on Equity

Return on Equity measures the rate of return on the ownership interest (shareholders' equity) of the common stock owners.

Formula: (Net Income / Shareholders Equity)*100

Return on Capital Employed

Return on Capital Employed is a ratio that indicates the efficiency and profitability of a company's capital investments. ROCE should always be higher than the rate at which the company borrows; otherwise any increase in borrowing will reduce shareholders' earnings.

Formula: EBIT / (Total Assets – Current Liabilities)*100

Return on Assets

Return on Assets is an indicator of how profitable a company is relative to its total assets, the ratio measures how efficient management is at using its assets to generate earnings.

Formula: (Net Income / Total Assets)*100

Return on Fixed Assets

Return on Fixed Assets measures the company's profitability to its fixed assets (property, plant & equipment).

Formula: (Net Income / Fixed Assets) *100

Return on Working Capital

Return on Working Capital measures the company's profitability to its working capital.

Formula: (Net Income / Working Capital) *100

Cost Ratios

Cost ratios help to understand the costs the company is incurring as a percentage of sales.

Operating costs (% of Sales)

Operating costs as percentage of total revenues measures the operating costs that a company incurs compared to the revenues.

Formula: (Operating Expenses / Revenues) *100

Administration costs (% of Sales)

Administration costs as percentage of total revenue measures the selling, general and administrative expenses that a company incurs compared to the revenues.

Formula: (Administrative Expenses / Revenues) *100

Interest costs (% of Sales)

Interest costs as percentage of total revenues measures the interest expense that a company incurs compared to the revenues.

Formula: (Interest Expenses / Revenues) *100

Leverage Ratios

Leverage ratios are used to calculate the financial leverage of a company to get an idea of the company's methods of financing or to measure its ability to meet financial obligations. There are several different ratios, but the main factors looked at include debt, equity, assets and interest expenses.

A2 Corporation Limited

Debt to Equity Ratio

Debt to Equity Ratio is a measure of a company's financial leverage. The debt/equity ratio also depends on the industry in which the company operates. For example, capital-intensive industries tend to have a higher debt equity ratio.

Formula: Total Liabilities / Shareholders Equity

Debt to Capital Ratio

Debt to capital ratio gives an idea of a company's financial structure, or how it is financing its operations, along with some insight into its financial strength. The higher the debt-to-capital ratio, the more debt the company has compared to its equity. This indicates to investors whether a company is more prone to using debt financing or equity financing. A company with high debt-to- capital ratios, compared to a general or industry average, may show weak financial strength because the cost of these debts may weigh on the company and increase its default risk.

Formula: {Total Debt / (Total assets - Current Liabilities)}

Interest Coverage Ratio

Interest Coverage Ratio is used to determine how easily a company can pay interest on outstanding debt, calculated as earnings before interest & tax by interest expense.

Formula: EBIT / Interest Expense

Liquidity Ratios

Liquidity ratios are used to determine a company's ability to pay off its short-terms debts obligations. Generally, the higher the value of the ratio, the larger the margin of safety that the company possesses to cover short-term debts. A company's ability to turn short-term assets into cash to cover debts is of the utmost importance when creditors are seeking payment. Bankruptcy analysts and mortgage originators frequently use the liquidity ratios to determine whether a company will be able to continue as a going concern.

Current Ratio

Current Ratio measures a company's ability to pay its short-term obligations. The ratio gives an idea of the company's ability to pay back its short-term liabilities (debt and payables) with its short-term assets (cash, inventory, receivables). The higher the current ratio, the more capable the company is of paying its obligations. A ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point.

Formula: Current Assets / Current Liabilities

Quick Ratio

Quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets.

Formula: (Current Assets - Inventories) / Current Liabilities

Cash Ratio

Cash ratio is the most stringent and conservative of the three short-term liquidity ratio. It only looks at the most liquid short-term assets of the company, which are those that can be most easily used to pay off current obligations. It also ignores inventory and receivables, as there are no assurances that these two accounts can be converted to cash in a timely matter to meet current liabilities.

Formula: {(Cash & Bank Balance + Marketable Securities) / Current Liabilities)}

Efficiency Ratios

Efficiency ratios measure a company's effectiveness in various areas of its operations, essentially looking at maximizing its use of resources.

Fixed Asset Turnover

Fixed Asset Turnover ratio indicates how well the business is using its fixed assets to generate sales. A higher ratio indicates the business has less money tied up in fixed assets for each currency unit of sales revenue. A declining ratio may indicate that the business is over-invested in plant, equipment, or other fixed assets.

Formula: Net Sales / Fixed Assets

A2 Corporation Limited

Asset Turnover

Asset turnover ratio measures the efficiency of a company's use of its assets in generating sales revenue to the company. A higher asset turnover ratio shows that the company has been more effective in using its assets to generate revenues.

Formula: Net Sales / Total Assets

Current Asset Turnover

Current Asset Turnover indicates how efficiently the business uses its current assets to generate sales.

Formula: Net Sales / Current Assets

Inventory Turnover

Inventory Turnover ratio shows how many times a company's inventory is sold and replaced over a period. A low turnover implies poor sales and, therefore, excess inventory. A high ratio implies either strong sales or ineffective buying.

Formula: Cost of Goods Sold / Inventory

Working Capital Turnover

Working Capital Turnover is a measurement to compare the depletion of working capital to the generation of sales. This provides some useful information as to how effectively a company is using its working capital to generate sales.

Formula: Net Sales / Working Capital

Capital Employed Turnover

Capital employed turnover ratio measures the efficiency of a company's use of its equity in generating sales revenue to the company.

Formula: Net Sales / Shareholders Equity

Capex to sales

Capex to Sales ratio measures the company's expenditure (investments) on fixed and related assets' effectiveness when compared to the sales generated.

Formula: (Capital Expenditure / Sales) *100

Net income per Employee

Net income per Employee looks at a company's net income in relation to the number of employees they have. Ideally, a company wants a higher profit per employee possible, as it denotes higher productivity.

Formula: Net Income / No. of Employees

Revenue per Employee

Revenue per Employee measures the average revenue generated per employee of a company. This ratio is most useful when compared against other companies in the same industry. Generally, a company seeks the highest revenue per employee.

Formula: Revenue / No. of Employees

Efficiency Ratio

Efficiency Ratio is used to calculate a bank's efficiency. An increase means the company is losing a larger percentage of its income to expenses. If the efficiency ratio is getting lower, it is good for the bank and its shareholders.

Formula: Non-interest expense / Total Interest Income Source : Canadean

A2 Corporation Limited

10.3 Disclaimer

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means,

electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, Canadean.

The data and analysis within this report is driven by Canadean from its own primary and secondary research of public and

proprietary sources and does not necessarily represent the views of the company profiled.

The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the

findings, conclusions and recommendations that Canadean delivers will be based on information gathered in good faith from

both primary and secondary sources, whose accuracy we are not always in a position to guarantee. As such Canadean can

accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect.

Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.