Business Valuation Report

January 19, 2024

Apex Manufacturing

BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website.
The estimates and data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has
not audited or attempted to confirm this in ormation for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is
the intellectual property of BizEquity and the information provided herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this
report and the information provided herein is also subject to the online terms of use and privacy policy of BizEquity.
 Contents

About Your Valuation Report 2

About Business Valuation 3

BizEquity Methodology 5

Your Valuation 6

Financial Summary 7

Key Performance Indicator Overview 9

KPI Details 12

Value Map 25

About BizEquity 26

Next Steps 27

1/19/24 Powered by BizEquity Page 1 of 27

BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
 About Your Valuation Report

This dynamically driven and customized report was Key Performance Indicators
generated to provide the business owner, and entrepreneur
or his or her advisor with general estimates of fair market The metrics no n as ey erformance ndicators s
value and liquidation value under relevant transaction ere calculated based on the analysis of company specific
conditions assumed for the profiled business at a air price data hich you input to various industry specific averages
and in real-time. The results presented will provide the linked to millions of other businesses. These s are useful
reader ith estimates hich re ect both the sale of assets ̀ measures of the overall financial and operational health
and the sale of equity on a going concern basis as ell as and growth of your business and they should be checked
estimates hich re ect the liquidation value and the so. regularly in order to identify meaningful trends or red
called enterprise value of the sub ect company. or more ags hich require corrective action. These same
specific information about business valuation, please see measures are commonly utilized by business coaches,
our About Business Valuation pages. �nancial professionals and potential business acquirers in a
variety of real world settings.
In analyzing your business, we have generated four
distinct and useful estimates of value in addition to as Throughout this valuation, the following color system is
many as 30 performance related metrics: used to denote business performance:

Asset Equity Enterprise Liquidation

Meeting
Value Value Value Value Outperforming Underperforming
Industry
Industry in Industry
Average

1/19/24 Powered by BizEquity Page 2 of 27

BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
 About Business Valuation

n understanding and interpreting the value of a business, hen valuing the entire company control interest, ̀
it is important to recognize that there are many different it is necessary to distinguish bet een the value of assets ̀
types and levels of value. The most common scenario asse∀t deal and the value of equity stoc de∀al . n
involves the estimation of fair mar et value on a going practice, owner-operated businesses are either sold on an
concern basis for the entire company, e.g. a interest asset sale basis or on an equity sale basis ith the
in the subject equity or assets/enterprise. purchase agreement reecting the unique aspects of e∀ach
scenario.

A variety of factors will determine the chosen mode of sale,

with buyer and seller negotiating price and an array of other
Fair Market Value
terms and conditions including the type of sale. ̀
(International Glossary of Business Valuation Terms)

The price, expressed in terms of cash

equivalents, at which property would change
hands between a hypothetical willing and The majority of small private
able buyer and a hypothetical willing and able firms are sold as asset sales
seller, acting at arms length in an open and
unrestricted market, when neither is under
while the majority of middle-
compulsion to buy or sell and when both have market transactions involve
reasonable knowledge of the relevant facts.
the sale of equity.
Going Concern
An ongoing operating business enterprise. The asset sale value ill al ays differ from the stoc sale∀ ̀
value due to the specific g oup of assets and liabilities that
Liquidation Value are included or excluded in each format.
The net amount that would be realized if the
business is terminated and the assets are sold In determining which estimations of value are of most
piecemeal. iquidation can be either orderly ̀ relevance to the business owner, the reason behind the
or forced.. valuation will typically address this question. Business
brokers hired to assist buyers and owners most commonly
value businesses under the asset sale scenario through
multiples of discretionary earnings while valuations for
divorce or estate ta es ill be bἀ ased primarily on the equity
sale scenario.

1/19/24 Powered by BizEquity Page 3 of 27

BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
 About Business Valuation (continued)

The general differences bet een the asset and equity n the real orld , there are many variations on these
transaction structure are: basic structures, e.g. an asset sale might include accounts
receivable or an equity sale might exclude long term debt,
Asset Sale (Asset Value) etc. The values provided in this report are stated in terms
ncludes inventory supplies, fi ed assets and all of the baseline case as defined above. They are both fair
intangible assets. E cludes all liquid financial assets and all mar et value on a going concern basis estimates, but one
liabilities. Buyer operates from newly formed legal entity. re ects the asset sale and one re ects the equity sale.

Equity Sale (Equity Value) Enterprise Value

ncludes the assets listed above liquid financial assets In middle-market transactions, it is also helpful to
E all liabilities T T . nvolves the full transfer of the distinguish bet een equity value and enterprise value .
legal entity including all account balances and current tax Enterprise value is a re ection of the firm s value as a
attributes. functioning entity and it is helpful in that it facilitates the
comparison of companies with varying levels of debt.
aturally, the value associated ith these t o distinct
transactions can be substantially different. n practical Which Business Value Conclusion is Most Important?
terms: The ans er to this question depends chie y upon
the purpose for the valuation engagement. If you are
negotiating the sale/purchase of a business via an asset
sale, then it is the asset value which is most relevant. If
Asset Sale Equity Sale you are filing an estate gi ta return, it is the equity value
which is most important. When evaluating middle-market
The seller keeps the The buyer is acquiring
companies for M&A purposes, both equity and enterprise
cash and receivables ALL of the assets and
value will be useful. If your business is rapidly deteriorating
but delivers the liabilities, on and off
and you are contemplating a reorganization, then
business free and the balance sheet.
liquidation value may be of most relevance.
clear of all debt.

1/19/24 Powered by BizEquity Page 4 of 27

BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
 BizEquity Methodology

While this valuation was generated considering as many Essentially, our focus is to try to provide a proprietary but
company , industry and location specific details as real world oriented valuation approach for small, midsize
available, the value presented in this report is an automated and emerging businesses. In doing so, we include methods
estimation of the air ar et alue of the business and its from the following valuation approaches utilized by
assets and liabilities. Some events and circumstances that professional business appraisers today:
might impact the overall valuation of a specific business
may not be taken into account for the purpose of this report.

Valuation methods from the income, market and asset Market Approach
approach have been utilized to reach the valuation results This involves analyzing the recent sales of
for the subject company. The opinion of value given in this comparable businesses. In a way, this is similar to
report is based on information provided by the user and ho residential real estate is valued, i.e., the firm
other sources. This information you input is assumed to be is valued by ay of mar et comps .
accurate and complete. However, BizEquity has not audited
or attempted to con�rm this information for accuracy or Income Approach
completeness. t s important to note that the estimates The income approach methods seek to transform
presented herein are not �nal numbers . nstead, e measures of profits or cash o into estimates of
are providing general estimates. As a result, the overall value by way of multiples, capitalization rates and
valuation should be considered a frame of reference and not discount rates.
an official appraisal.
Rules-of-Thumb
These are simple but o en po erful valuation
methods that are utilized by market participants
on a regular basis. Some business types are
bought and sold almost exclusively by way of
these industry specific rules of thumb

1/19/24 Powered by BizEquity Page 5 of 27

BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
 Your Valuation

Apex Manufacturing
Industry: 33251 - Hardware Manufacturing

Equity Value (Latest Valuation) This fair market value conclusion is the value of the
company available to its owners or shareholders and

$8,336,662
incorporates all of the assets included in the asset ̀
value plus the firm s liquid financial assets cash, ,
deposits, etc. and minus its liabilities T and T .

Asset Sale Value Enterprise Value Liquidation Value

$7,625,350 $7,781,662 $909,312

This common transaction-oriented This fair market value estimate is The liquidation value conclusion
fair market value conclusion includes equal to the total value of the firm is based on the key assumption of
the firms inventory, furniture, ̀ or the value of the firms equity plus ̀ insolvency and the immediate sale of
fitures ̀ and equipment and all its long term debt, e.g. it reects the ̀ all assets on or off the balance sheet
intangible assets ranging from value of the entire capital structure at or near fire sale level coupled
customer base to goodwill. equityholders and debtholders or ith ̀ the nearly simultaneous
enterprise . retirement of all liabilities. This figure
does not include accounts receivable.

1/19/24 Powered by BizEquity Page 6 of 27

BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
 Financial Summary Apex Manufacturing

2023
Income Assets Liabilities

Revenue Cash Accounts Payable

$9,000,000 $650,000 $100,000

Pretax Income Accounts Receivable Other Short-Term Liabilities

$1,500,000 $230,000 $20,000

Officer Compensation Inventory Bank Loans
$200,000 $450,000 $40,000

Interest Expense Other Current Assets Other Long-Term Liabilities

$250,000 $67,500 $55,000

Non-Cash Expenses Fixed Assets Contingent Liabilities
$34,000 $43,250 $10,000

One-Time Expenses Intangible Assets

$45,000 $21,000
One-Time Revenues

$25,000

1/19/24 Powered by BizEquity Page 7 of 27

BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
 Financial Summary (Yearly) Apex Manufacturing

2023 2022 2021

Income Revenue $9,000,000 $8,250,000 $6,500,000

Pretax Income $1,500,000 $1,000,500 $950,000
Officer Compensation $200,000 $185,000 $160,000
Interest Expense $250,000 $105,000 $89,000
Non-Cash Expenses $34,000 $31,000 $34,000
One-Time Expenses $45,000 $43,000 $40
One-Time Revenues $25,000 $19,000 N/A

Assets Cash $650,000 $300,000 $250,000

Accounts Receivable $230,000 $143,000 $122,000
Inventory $450,000 $290,000 $100,000
Other Current Assets $67,500 $35,000 $28,000
Fixed Assets $43,250 $40,000 $35,000
Intangible Assets $21,000 $18,000 $16

Liabilities Accounts Payable $100,000 $80,000 $90,000

Other Short-Term Liabilities $20,000 $10,000 $15,000
Bank Loans $40,000 $100,000 $160,000
Other Long-Term Liabilities $55,000 $40,000 $65,000
Contingent Liabilities $10,000 $10,000 $20,000

1/19/24 Powered by BizEquity Page 8 of 27

BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
 KPI Overview Apex Manufacturing

In order to better understand your companyʼs operations, we have calculated a variety of Key Performance Indicators
s for your revie and comparison to industry benchmar s. n terms of valuation outcomes for your firm, ey
factors include size, profitability and gro th.

The next three pages provide an Overview of KPIs; the subsequent group of pages go into further detail about
individual Indicators.

Cash Flow-to-Revenue 22%

Cash-to-Revenue 7%

Receivables (Conversion) 8
Inventory-to-Revenue 5%
Fixed Assets-to-Revenue 0%
Total Debt-to-Revenue 2%

:
Financial Metrics Compared to Revenue
(

10M

7.5M
USD

5M

2.5M

0
2021 2022 2023
Year

Inventory TotalDebt Revenues Cashflow Receivables

1/19/24 Powered by BizEquity Page 9 of 27

BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
 KPI Overview (continued) Apex Manufacturing

This chart shows you Pre-Tax Income, as entered in the 7-Step process, to specific key financial items. Specially, the items are
Accounts Receivable, Inventory, Fixed Assets, and Total Debt, all as entered in the 7-Step process.

Receivables-to-Income (Pre-Tax) 12%

Inventory-to-Income (Pre-Tax) 30%

Fixed Assets-to-Income (Pre-Tax) 3%

Total Debt-to-Income (Pre-Tax) 14%

:
Financial Metrics Compared to Pretax Income
(

2,000k

1,500k
USD

1,000k

500k

0
2021 2022 2023
Year

Inventory TotalDebt PretaxIncome FixedAsset Receivables

1/19/24 Powered by BizEquity Page 10 of 27

BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
 KPI Overview (continued) Apex Manufacturing

This chart shows you the growth trends of important drivers that effect the valuation of the business. Specifically, it is grouping
Revenue, Total Debt, Pre-Tax Income, and Accounts Receivables, all as entered in the 7-Step process.

Growth Trends of Drivers of Valuation

:
Growth Trends
(

10M

7.5M
USD

5M

2.5M

0
2021 2022 2023
Year

Revenue TotalDebt PretaxIncome Receivables

1/19/24 Powered by BizEquity Page 11 of 27

BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
 KPIs: Return on Equity (ROE) Apex Manufacturing

:
(

600

400
Percentage

200

0
2021 2022 2023
Year

Apex Manufacturing Industry Average = 5.51

Return on Equity (ROE) Over Time What does it mean?

This is the amount of net income generated as a percentage
Compares profi ability to the equity value of a company.
of shareholderʼs equity. Return on Equity (ROE) measures
Indication of the strength of the business model.
a companyʼs profitability by depicting how much profit
a company generates with money shareholders have
invested.
Under- Industry Out-
Year %
Performing Average Performing
Why should it matter?
2023 120% ● ROE is a universal and very useful measure to compare
a companyʼs profi ability to that of its peers in the same
2022 168% ● industry. High growth companies tend to have a high ROE.

2021 463% ● Give me an example

If an E-Commerce company has an ROE of 0.48 this means
it generated 48 cents in net income for every $1 the
shareholder had invested.

1/19/24 Powered by BizEquity Page 12 of 27

BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
 KPIs: Receivables (Conversion) Apex Manufacturing

:
(

60

Ratio 40

20

0
2021 2022 2023
Year

Apex Manufacturing Industry Average = 47.28

Receivables (Conversion) Over Time What does it mean?

ncreases over time could signal difficulty in collecting from The time period shows the number of days it takes a
customers. company to collect its accounts receivables.

Why should it matter?

Year Days Under- Industry Out- A lower time period indicates that a company relies mainly
Performing Average Performing
on cash or is efficient in imparting credit and collecting its
debts. On the other hand a higher time period could mean
2023 8 ●
some inefficiency in collecting the account receivables and
require a review of the current credit and collections
2022 6 ● policies of the company. The quicker receivables are
collected, the sooner cash is available to meet other
2021 7 ● business needs (thereby reducing the need to borrow
funds).
Give me an example
If a lumber wholesaler has a receivables conversion of
24 days, it means it takes 24 days on average to collect
its account receivables. f the firm s credit terms are net
days”, this would be considered a positive result.

1/19/24 Powered by BizEquity Page 13 of 27

BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
 KPIs: Inventory Turnover Apex Manufacturing

:
(

75

Ratio 50

25

0
2021 2022 2023
Year

Apex Manufacturing Industry Average = 9.24

Inventory Turnover Over Time What does it mean?

How long it takes to sell inventory on hand. This activity or turnover ratio addresses ho efficiently
goods are sold by calculating how many times a companyʼs
inventory is sold and replaced in a given time period.
Under- Industry Out-
Year Ratio
Performing Average Performing Why should it matter?
A lower ratio could mean poor sales and excessive inventory,
2023 20 ●
possibly due to pricing policies. A higher ratio may indicate
a too narrow selection of product and possibly lost sales.
2022 28.448 ●
Companies selling perishable goods have a very high
inventory turnover. Keeping inventory balances to a
2021 65 ●
minimum will reduce costs but may reduce sales volume.

Give me an example
If a soda manufacturer had an inventory turnover of 5.7,
this means it sold all of its average inventory 5.7 times each
year.

1/19/24 Powered by BizEquity Page 14 of 27

BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
 KPIs: Fixed Assets Turnover Apex Manufacturing

:
(

300

200
Ratio

100

0
2021 2022 2023
Year

Apex Manufacturing Industry Average = 7.71

Fixed Assets Turnover Over Time What does it mean?

Shows how productive a companyʼs assets are. This activity ratio shows the companyʼs ability to generate
net sales from their investments in fi ed assets.

Under- Industry Out- Why should it matter?

Year Ratio
Performing Average Performing
A higher ratio shows productive fi ed asset investment. This
ratio is more vital and useful to the manufacturing industry.
2023 208.092 ●
Give me an example
2022 206.25 ●
If a manufacturing company had a fi ed asset turnover of
2021 185.714 ● 3.8, this means the company generated sales worth $ 3.8 for
every $1 of investment in fi ed assets

1/19/24 Powered by BizEquity Page 15 of 27

BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
 KPIs: Debt-to-Equity Apex Manufacturing

:
(

400

Percentage

200

0
2021 2022 2023
Year

Apex Manufacturing Industry Average = 395.29

Debt-to-Equity Over Time What does it mean?

This solvency ratio is a function of the firm s “capital structure”
Shows the extent of the debt load, in comparison to a
(all assets must be finan ed by either debt or equity) and
companyʼs equity value.
provides a measure of the companyʼs financial l verage. It often
takes into account the total liabilities of the company while
some versions include only long term debt. It indicates the
Under- Industry Out- proportion of equity (owner investments and retained profits)
Year %
Performing Average Performing and liabilities the company is using to finan e its asset base.

2023 17% ● Why should it matter?

A higher ratio generally means that the company has been
2022 39% ● aggressive to finan e its growth with debt and the creditors
are assuming a higher risk. A lower ratio generally indicates
2021 161% ● that the company is “safer” (better equipped to withstand an
economic downturn) due to lower mandatory principal and
interest payments, but it may also suggest an overly cautious
ownership. Capital intensive industries tend to have a higher
debt to equity ratio than others.

Give me an example
If a machinery manufacturer has a ratio of 2.8. This means that
for every $1 owned by the shareholders the company owes
$2.8 to its creditors

1/19/24 Powered by BizEquity Page 16 of 27

BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
 KPIs: Interest Coverage Apex Manufacturing

:
(

15

Ratio 10

0
2021 2022 2023
Year

Apex Manufacturing Industry Average = 4.48

Interest Coverage Over Time What does it mean?

ho s ho much cushion a company has in paying Also referred to as “times interest earned”, this solvency
its interest expenses. ratio is equal to earnings before interest and taxes (EBIT)
divided by interest expense and it is used to determine
the ease by which your company can pay interest on
Under- Industry Out- outstanding debt obligations.
Year Ratio
Performing Average Performing
Why should it matter?
2023 7 ●
A lower ratio may cast doubt on the companyʼs ability to
meet ongoing principal and interest burdens. The higher
2022 10.529 ●
the ratio, the easier it is for the firm to repay its current debt
and take on additional debt if necessary. Bankers, creditors
2021 11.674 ●
and even investors o en calculate and analyze this ratio to
gauge the firm s solvency position. imilar to most ratios,
averages ill differ by industry.

Give me an example
f a so are company has an interest coverage ratio over 2
times, this suggests that it has the ability to meet its interest
payments two times over and may qualify for additional
debt.

1/19/24 Powered by BizEquity Page 17 of 27

BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
 KPIs: Cash-to-Debt Apex Manufacturing

:
(

400

300
Percentage

200

100

0
2021 2022 2023
Year

Apex Manufacturing Industry Average = 7.13

Cash-to-Debt Over Time What does it mean?

Shows the ability to pay off xisting debts. This solvency ratio compares a companyʼs operating cash
balance to its total debt. This ratio provides an indication of
the companyʼs ability to cover total debt (ST and LT) with its
Under- Industry Out-
operating cash holdings.
Year %
Performing Average Performing
Why should it matter?
2023 302% ●
A higher percentage ratio indicates that the company is
better equipped to carry and service its total debt. A high
2022 130% ●
ratio may also indicate “excess cash” or “excess net working
capital” which could be returned to the shareholders
2021 76% ●
or invested into new equipment or other avenues for
expansion. A low ratio could signal future difficulties
in servicing debt or even meeting payroll or vendor
obligations.

Give me an example
If a furniture store has a ratio of 74% this means that for
every $1 of debt, it has 74 cents in liquid holdings which
could be used to service this debt.

1/19/24 Powered by BizEquity Page 18 of 27

BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
 KPIs: Income-to-Revenue (PreTax) Apex Manufacturing

:
(

20

15
Percentage

10

0
2021 2022 2023
Year

Apex Manufacturing Industry Average = 3.57

Income-to-Revenue Over Time What does it mean?

This “pretax” profi ability ratio known as “return on sales”
A rising percentage will often lead to a higher valuation.
indicates the relative profit ma gin of the company for each
dollar of sales.
Under- Industry Out-
Year %
Performing Average Performing Why should it matter?
Similar to the return on equity ratio, a higher percentage
2023 17% ●
ratio indicates a higher rate of relative profi ability. Unlike
the return on equity ratio, this measure is “pretax” in nature
2022 12% ●
and is not affected by the actual tax burden. Higher gross
profits and l wer operating expenses coupled with higher
2021 15% ● revenues will bolster this important metric, which can be
compared both over time and against the industry peer
group.

Give me an example
If a convenience store has a percentage ratio of 17%, this
means that for every $1 of revenue it has a pretax income of
17 cents.

1/19/24 Powered by BizEquity Page 19 of 27

BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
 KPIs: Cash Flow-to-Revenue Apex Manufacturing

:
(

30

Percentage 20

10

0
2021 2022 2023
Year

Apex Manufacturing Industry Average = 6.13

Cash Flow-to-Revenue Over Time What does it mean?

A rising percentage will often lead to a higher valuation. This multi-purpose ratio is an indicator of the firm s ability
to convert sales revenue into spendable cash for the
ownership. Often times this is a key measure when analyzing
Under- Industry Out-
a companyʼs ability to grow without the assistance of
Year %
Performing Average Performing outside capital.

2023 22% ● Why should it matter?

A higher percentage ratio indicates that company is able to
2022 16% ●
turn a higher amount of revenues into cash fl w.

2021 19% ● Give me an example

If a winery has a percentage ratio of 11%, it means for every
$1 of revenue it is generating around 11 cents in
discretionary cash fl w.

1/19/24 Powered by BizEquity Page 20 of 27

BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
 KPIs: Receivables-to-Income (PreTax) Apex Manufacturing

:
(

750

500
Percentage

250

0
2021 2022 2023
Year

Apex Manufacturing Industry Average = 700.53

Receivables-to-Income Over Time What does it mean?

This measure provides an indication of the amount of credit
being granted to the customer base relative to ongoing
Under- Industry Out-
Year Ratio
Performing Average Performing profits

2023 12% ● Why should it matter?

If the receivables are greater than pretax profit, the
2022 13% ● importance of establishing and maintaining an effective
and efficient c edit, billing and collections process is
2021 13% ● heightened.

Give me an example
A company with $100K in receivables and $100K in pretax
profit must collect all receivables to maintain the firmʼs
profit margin.

1/19/24 Powered by BizEquity Page 21 of 27

BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
 KPIs: Inventory-to-Income (PreTax) Apex Manufacturing

:
(

600

400
Percentage

200

0
2021 2022 2023
Year

Apex Manufacturing Industry Average = 429.04

Inventory-to-Income Over Time What does it mean?

This ratio illustrates the relative importance of inventory
holdings (typically carried at lower of cost or market) to
Under- Industry Out-
Year Ratio
Performing Average Performing company profitability.

2023 30% ● Why should it matter?

or retail and manufacturing firms in particular, inventory is
2022 29% ● one of the factors that you can control to improve your small
business profitability. The ay that inventory is sourced
2021 11% ● and managed can impact the different profit levels of your
income statement. Ignorance of how to use inventory to
your advantage prevents you from maximizing operational
efficiency.

Give me an example
Over time, the goal might be to decrease this ratio, e.g.
generate higher preta profit ith lo er average inventory
holdings.

1/19/24 Powered by BizEquity Page 22 of 27

BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
 KPIs: i ed ssets to ncome reTa Apex Manufacturing

:
(

600

400
Percentage

200

0
2021 2022 2023
Year

Apex Manufacturing Industry Average = 451.66

i ed ssets to ncome ver Time What does it mean?

This ratio provides insight into the firm s profitability
relative to its stoc of fi ed assets furniture, fi tures and
Under- Industry Out-
Year Ratio equipment/vehicles.
Performing Average Performing

2023 3% ● Why should it matter?

ll other things equal, the firm see s higher preta profits
2022 4% ● for each dollar invested into fi ed assets. s this ratio
declines, the company is generating higher profits per dollar
2021 4% ● of capital e penditures.

Give me an example
A ratio greater than one suggests that more money has
been invested into capital assets than profits have been
generated. This and other ratios should be reviewed “over
time” and against industry norms.

1/19/24 Powered by BizEquity Page 23 of 27

BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
 KPIs: Total Debt-to-Income (PreTax) Apex Manufacturing

:
(

7.5k

5k
Percentage

2.5k

0
2021 2022 2023
Year

Apex Manufacturing Industry Average = 6995.99

Total Debt-to-Income Over Time What does it mean?

This measure shows the relationship between total
company obligations at any point in time (short and long
Under- Industry Out-
Year %
Performing Average Performing term debt) and ongoing profit performance.

2023 14% ● Why should it matter?

Firms with high debts relative to pretax profits a e often
2022 23% ● riskier than those with lower total debts. At the same
time, some companies rely on the use of debt to grow and
2021 35% ● enhance profit margins (when the return on investment of
borrowed funds is greater than the cost of borrowing). From
a valuation perspective, firms with lower debts and higher
pretax profits will be worth more than those with higher
debts and lower profits (all other things equal).

Give me an example
If total debts are $100K and total pretax profits a e $ 50K, it
would take two years to pay off debts out of ongoing profits

1/19/24 Powered by BizEquity Page 24 of 27

BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
 Value Map

Exponential Business Value

Businesses of all types and sizes get business valuations because they are interested in discovering what their most valuable
asset is worth. Taking this first step is a critical one, but only the first. Having “discovered” the business value, the next steps
towards proactively managing value involve monitoring and optimizing the value of your company.

1X 3X 5X 10X

LEVEL 1 LEVEL 2 LEVEL 3 LEVEL 4

< $ 500K $ 500K- $ 2MM $ 2MM- $ 10MM $ 10MM+

Our goal is to help entrepreneurs “climb the valuation One central theme that is as simple as it is important
mountain” illustrated above to the highest level possible by concerns the so-called “size effect” or “size premium”.
internalizing certain key valuation and operational concepts Based on BizEquity's extensive research, we have found that
associated with discovering, monitoring and optimizing companies with higher revenues and earnings are worth
business value. Every business will go through stages of more than their smaller counterparts. The above graph is
development and hopefully growth, and we want to help in for illustrative purposes only, but generally, achieving
this process. Once the basics of business valuation are valuation growth is possible due to the dual impact of
understood, the path towards enhancing value will become higher earnings, e.g., higher earnings will directly increase
clearer and more “real” in the eyes of the owner. value at any multiple, and higher earnings will alone lead to
a higher valuation multiple.

1/19/24 Powered by BizEquity Page 25 of 27

BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
 About BizEquity

Democratizing Business Valuation Knowledge

BizEquity urges entrepreneurs and business leaders
to discover, monitor and optimize the value of their
organization. t s arguably the single most important
question about a commercial entity: What’s it worth? Discover Monitor Optimize

With this Report, we’ve helped you

arm yourself with critical valuation
knowledge, putting you in a better
position to:
n the strength of BizEquity s �rst and leading online
business valuation engine, you re able to ma imize hat
Pursue growth initiatives your business is orth and it s affordable, accessible and
in real-time.
ecure financing
Our Cloud based Valuation engine and system was
Attract and reward talent
conceived and constructed by a leading financial institution
and improved upon by leaders in the accounting, finance,
Cultivate high-impact partnerships
venture capital and technology arena.
Ensure proper credit and risk management
With over 50 patents pending or granted, our algorithmic
engine valuation system can enable any online visitor to
value a business in a matter of minutes.

Now that you’ve taken this important step, we invite you to share
our system with your business and personal friends. Help us
democratize business valuation knowledge, and see how much
more we can all accomplish!

1/19/24 Powered by BizEquity Page 26 of 27

BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
 Next Steps

Where are you in your journey?

We trust that you found your Business Valuation Report to be an informative resource. The aim of this report is to provide
guidance for growing companies as they evolve and take steps to elevate their performance results.

No matter where you may be today, this Report

can probably help you get closer to your vision:
f you have more specific
f you re in the early stages of your company s life,
questions and feel our
perhaps you need to expand your capabilities and
reach via mareting, intellectual property advisory, ̀ experience and network may
benefits and tax consulting. be of value, please feel free to
If your business is established and nearing a turning contact us to start a dialogue:
point, maybe you seek legal representation,
strategic partners and/or growth funding.

If the company is already a substantial success with a

critical mass of business, we can help you formulate
and/or pursue a smart exit strategy.

1/19/24 Powered by BizEquity Page 27 of 27

BizEquity does not represent or endorse the accuracy or reliability of any advice, opinion, statement or any other information displayed or distributed through this report or its website. The estimates and
data contained herein are made using the information you provide, publicly available information and data, and rules of thumb for different industries. BizEquity has not audited or attempted to confirm this
information for accuracy or completeness. This report should not be used to obtain credit or for any other commercial purposes. This report is the intellectual property of BizEquity and the information provided
herein is provided for your internal use only and may not be copied or redistributed for any reason. Your use of this report and the information provided herein is also subject to the online terms of use and privacy
policy of BizEquity.
BizEquity is the world’s largest provider of business valuations,
having valued over 33 Million companies globally.

www.bizequity.com