LICENSE AGREEMENT You May: 1. Use the program on a single machine. 2. Copy the program into your machine or onto another floppy disk for use as an archival backup, in support of your use of the program on a single machine. 3. Transfer the program and license to another individual if the other individual agrees to accept the terms and conditions of this license. If you transfer this program you must do so in its entirety and/or destroy all copies not transferred. TABLE OF CONTENTS INTRODUCTION FEATURES GETTING STARTED DATABASE 1. Data Window 2. Info Window BALANCE SHEET 1. Current Assets work sheet. 2. Fixed Assets work sheet. 3. Current Liabilities / LTD work sheet. 4. Stockholders Equity work sheet. INCOME STATEMENT 1. Income Statement work sheet. INDIVIDUAL RATIOS 1. 16 different ratios COMPLETE RATIO ANALYSIS / TREND TREND ANALYSIS INTRODUCTION Financial and Credit Analysis was designed with the financial analyst in mind. This flexible, user friendly program enables the analyst to input information from the financial statement and then lets the program do the work. This productivity tool should be used as an aid in helping the analyst look in the right direction and guide him into further interpretation. It should be kept in mind, that the full importance of any of the ratios or the other measurements, depend on the direction of the trend and its relationship to some predetermined standard or industry average. Remember that this is an aid to analysis and interpretation, this is not an alternative for sound thinking. FEATURES 1. DATABASE 2. BALANCE SHEET 3. INCOME STATEMENT 4. INDIVIDUAL RATIO ANALYSIS 5. COMPLETE RATIO ANALYSIS/TREND 6. FINANCIAL TREND GETTING STARTED The first thing you should do with your disk is to make an archival copy of the original. Follow the procedures below: 1. Bring up your system. 2. Be sure your screen shows the a:> prompt if not change it to a:>. THIS PROCEDURE IS FOR COMPUTERS WITH TWO (2) DRIVES A. Insert disk into A drive. B. Insert FORMATTED blank disk into B drive. C. At the A:> prompt type in COPY *.* b: AFTER COPY PROCESS IS COMPLETE REMOVE BOTH DISKS AND STORE THE ORIGINAL IN A SAFE PLACE.(Work only with your archival copy.) FOR COMPUTERS WITH ONE (1) FLOPPY DRIVE AND A HARD DISK DRIVE. A. Change A:> to C:> B. At C:> type MD FACA C. C:> CD\FACA D. Insert original disk in A drive. E. Type COPY A:*.* AFTER COPY PROCESS IS COMPLETE REMOVE DISK FROM "A" DRIVE AND STORE IT IN A SAFE PLACE. (Work form your Hard drive.) Now you are ready to use the program. 3. At the prompt at which ever drive you are on type in FACA. EXAMPLE A:> FACA (Press Enter) B:> FACA (Press Enter) C:> CD\FACA (Press Enter) C:> FACA (Press Enter) By default, the program works with the database located in the drive you are logged on. You can change it, by specifying the database drive on the command line. For example, you are logged on drive A ( A: appears on the screen), but you would like to have a database for Credit analysis on a separate disk for confidential reasons on a disk in drive B:. Just type FACA B: (Enter). The work will be saved to the B: drive disk. You can also do it for the hard disk. First make a sub- directory on you hard disk called DATA. For example MD DATA. At the C: prompt type in FACA C:\DATA. We tried to anticipate all the configurations of monitors and graphics cards. In order to cover all the bases we included switches for monochrome screens and for "snow" when you go from screen to screen. If you have a monochrome monitor, and the contrast on the screen is toned down, exit the program and use the switch /M. For example, at the prompt type in FACA /M. If you see "snow" as you go from screen to screen you should exit the program and use the switch /S. For example, at the prompt type in FACA /S. This will eliminate the "snow", but will slow down the program somewhat. You can combine all and any option jointly. For example; "FACA B: /M/S" will put your database on drive B: with "snow" checking and enhanced contrast on monochrome monitors. You can enter the switches in any order. As soon as you hit the Enter key it will be 15 to 20 seconds before you will be able to enter your first customer name and the financial information. The first screen you should see is our copyright and disclaimer notice. Please take the time to read it over and then hit the Enter key. The second screen you should see is the MENU screen with the following options: 1. DATABASE 2. BALANCE SHEET 3. INCOME STATEMENT 4. INDIVIDUAL RATIOS 5. COMPLETE ANALYSIS 6. TRENDS 7. EXIT We suggest for the first time to follow the order as they are listed on the menu. After you get a feel for how the program works you can feel free to explore. Each item on the menu is covered in detail in following chapters. DATABASE Entry into the DATABASE is as simple as pressing the ENTER key when DATABASE is highlighted on the MENU screen. If it is not highlighted and you want to go into the DATABASE from the MENU screen, just press the letter D on your keyboard. You may also use the arrow keys to move to the DATABASE option, and then press the Enter key. Press Enter if highlighted, if not press the letter D. We first recommend that you press the F1 key once you are in the DATABASE so as to acquaint yourself with the various function keys. DATA WINDOW Since this will be your first entry the DATABASE will be empty. As you look at the screen you will notice that the Name: area is highlighted. Type in your customers name and press Enter. This will move you to space for an address. Note that the Address: area is highlighted now. Type in the customers address and press Enter. Continue until you have filled in the comment section. Note that you do not have to fill in any spaces, but we do recommend you put the customers name in so you can identify the financial information at a later date. NOTE the program will not save or update the record in the DATABASE without the customer name. We would also recommend that when entering the Fiscal Year End you use the numbers 1 through 12 that correspond to that month. This enables the program to sort the months properly. Be sure to SAVE your input by pressing F6 only once. Every time you hit F6 you create a new entry, so unless you want duplicates only press it once. Use of the function keys in the DATABASE option is very simple. The F1 should be more than enough explanation on the way they are used. Here we will go into a little more detail on how to find, and update records. In order to find the record press Alt-A, to clear the screen, then type in the name of the customer and eventually the other index key information. For example, if your index key is name, then all you do is enter the customers name in the name field, and press F3. If you prefer to look by state, then press F9 repeatedly, until "state" appears in the info window. Next enter the state in the field and press F3. This will bring up the first customer record in the requested state. By pressing PgDwn you will bring up the next record in the file under that state. You can also enter customer name and state and then press F3. The program will try to find the exact match in the DATABASE. If it is unable to find an exact match it will bring up the closest match and will beep at you, alerting you, that while it did not find an exact match it did find something, but not exactly what you where looking for. After working with the various entries, doing whatever changes that had to be made, you can SAVE the changes by pressing F7. This will not generate a new entry, it will just save the change you made to the record. INFO WINDOW This window give you the Mode and Index key you're in at the present moment. MODES There are two (2) Modes. By pressing F2 you can toggle between ENTRY Mode and BROWSE Mode. The Entry Mode allows you to use the DATA WINDOW and the Browse Mode lets you see 11 customers at a glance. F2 / Mode: ENTRY OR BROWSE INDEX KEY The Index key is for sorting your database according to: 1. Name 2. State 3. Zip 4. Year-End 5. Rating Use the F9 key to change how your database will sort. F9 / INDEX KEY BALANCE SHEET Welcome to the BALANCE SHEET. The first thing you should check for is that the name of your customer is correctly displayed at the top of the balance sheet, second that the year ending is also correct. If they are not, you should go back and change them in the DATABASE. Lets assume they are correct. First press the F1/Help key. This will help you to become familiar as to what the various function keys are for, and what they do on this screen. Press any key to continue. As you look at the screen you will notice that it is lacking the financial data. The next steps will allow you to take your financial statement in hand and by pressing the F2/CURR key you will notice that a new screen has appeared on your screen over the balance sheet. This is the CURRENT ASSET work sheet. This screen allows you to input data from your financial statement on to the BALANCE SHEET. Lets get started. Press the F2/CURR key. Press the F1 key. It will give you a description of the five (5) function keys available for this screen. Press any key and lets start entering data. A. Entering the year. (Press Enter) B. Enter all Cash and anything Equivalent to cash. C. Enter Total accounts receivable. (Press Enter) At this point you should be ready to enter information about the inventory. You will note that there are four (4) spaces for description and dollar amounts. These can be changed to suit your needs. Press the F3/Descr key and then press the space bar. What was currently in that field is now gone and can be changed to your own description. The same goes for the other four (4) fields. Input Prepaid expenses. (Press Enter) If your customer has any other current assets listed, you have three (3) spaces for descriptions and dollar amounts. Follow the same instruction as listed above to change the descriptions. With this field being complete, be sure your current assets on the screen balance to your financial statement. Your next step is to transfer the information to the balance sheet. This is done by simply pressing F2/Balan. You will notice that the CURRENT ASSET work sheet has dropped and you can see that the numbers now appear on the balance sheet in the Current Asset section. The other three (3) Work Sheets work in the same way as the Current Asset work sheet. We will walk you through the next Work Sheet which is the Fixed Asset work sheet. Lets start by pressing F3/Fixed key. Press the F1 key for a description of the various function keys for this screen. Notice that the Fixed Asset work sheet has come up. The year should already be in if you have input the Current Asset work sheet, if not, put in the year and press the Enter key. Your first three entries allow you to change them to suit your needs. (Note Land is lower down on the work sheet.) You can use the description already there or input your own by using the F3 key. After you have completed this section move on down to Accumulated Deprec., then Land and then the final section which is for any other fixed asset that may be listed on the financial statement. You have six (6) spaces available for descriptions and amounts. When you have completed this section, note in the lower right hand corner at the TOTAL ASSETS. Be sure it ties to the financial statement. When you are finished with the Fixed Asset work sheet press the F2/Balan key. As you can see the number now appear on the balance sheet in the Fixed Asset section of the balance sheet. As you will soon see ALL the Work Sheets have the same five (5) keys in common. You have noticed by now that there are two (2) other keys, F8/PrvYr and F9/NxtYr. You can enter up to five years of financial information from the work sheet or you can toggle through the different years if you have them in the database. There is no special order required for entering financial information. Input the year and the program will sort the years automatically in descending order. If you have entered five (5) years, and you would like to enter a new year, bring up the year you would like to replace (press F8 or F9 ) and start typing the new information over the old. The program will sort it after you are done. We will leave the Liabilities and the Stockholder Equity work sheet to you. If you are in doubt press the F1/Help key. That is how close help is. After you are finished with the balance sheet go back to the DATABASE and press the F7/Update or F6/Save key. This will save the information you have put into the Balance Sheet in the DATABASE. Our next step is to put information into the Income Statement. INCOME STATEMENT The first thing you should do before doing any inputting is to check the customers name and year ending at the top of the screen. Be sure you are inputting the correct financial information from the financial statement for the customer listed on the screen. Let's look at the screen. This screen will show you three (3) years at a glance. Press and hold down the right arrow key on your keyboard, you will notice that the screen will start scrolling to the left giving you access to two more years of additional financial information. This screen will give allow to compare three consecutive years at a glance. Lets get started. Press the F1/Help keys. Acquaint your self with what the various function keys do. Remember the F1 key will inform you what to do if you can't remember which key does what. Press any key. Press F2/Work, up pops the Income Statement Work Sheet. A. Enter the year. (Press Enter) B. Enter Net Sales. (Press Enter) C. Enter Cost of Sales. (Press Enter) As you can see, every time you press the Enter key after an entry, it moves you to the next item to be input on the work sheet. This Work Sheet allows you to enter three (3) descriptions for SG & A if you need to and we have allowed for four (4) different descriptions for Other income. Some will use more while other will only use one (1) or two (2). Remember F3 to input the description. Go ahead and complete this work sheet. When you are finished be sure to check you numbers and be sure that the Net Income figure agrees with the financial statement. Remember what the Income Statement looked like before you completed the Work Sheet. Now press F2/Stat. Notice that the numbers you input on the Work Sheet now appear on the Income Statement screen and each number is followed by a percentage. This percentage is the percentage of Sales for each item listed. At this point be sure to go back into the DATABASE and "SAVE" (F6) your work. We don't want you to go through re-entering all the information again. INDIVIDUAL RATIOS The Individual Ratio screen is somewhat different than the other screens, but there are some similarities in the function keys. Lets start by pressing F1/Help. This will help to familiarize you with the various functions. You will find that two (2) of the keys function the same way as on the previous screens, the only different key on this screen is the F2/Enter function keys. By default the program comes up with the Current Ratio ready for your review. Now press the down arrow, only once. As you can see the Quick Ratio is highlighted and the information in the low box has changed. Each time you press the down arrow key you change the Ratio you are looking at, plus the formula, numbers being analyzed and the description of the Ratio. Now press the F2/Enter key you will note that the number below the formula has been highlighted, you can now change that number if you so choose. Now press the Enter key, you will note that the next number in the formula has been highlighted and at this time you can change this number if you choose. The changes in this area are not saved to the database. When you are finished press Enter, and this will return you to the ratio selections above. COMPLETE ANALYSIS Press the F1/Help key. As you can see there are only two (2) active function keys. The Complete Analysis screen gives you a comparative view of all the ratios. All of these ratios are also listed as individual ratios. There are no work sheets to deal with, just an overview for you to see and analyze trends that may be starting, that may concern you. TREND ANALYSIS Press the F1/Help key. As you can see on this screen there are only three (3) Active function keys. This screen is capable of showing five (5) years of Asset data for comparative review. Now press the F2/Liab key, on this screen you can also have five (5) years of Liability and Stockholders Equity data. These screens give you a five (5) year trend based on dollars. As you can see there are no worksheets to deal with on these screens. To make any changes to these screens press F1 and follow the instruction on the screen.