Principles of Private Firm Valuation

TABLE 4.2

Tentex Income Statement (2003) and Calculation of NOPAT

Benchmark

Adjustment to

Row

Concepts

Reported Value

Value

Earnings

Adjusted Values

1

Gross receipts less returns and allowances

$3,562,556.00

—

—

$3,562,556.00

2

Cost of goods sold

$2,030,036.00

—

—

$2,030,036.00

3

Depreciation

$250,000.00

$250,000.00

4

Compensation of officers

$681,520.00

$258,574.00

($422,946.00)

$258,574.00

Compensation of officer 1

$340,760.00

$129,287.00

($211,473.00)

$129,287.00

Compensation of officer 2

$340,760.00

$129,287.00

($211,473.00)

$129,287.00

5

Salaries and wages

$350,000.00

$268,810.00

($81,190.00)

$268,810.00

Bookkeeping clerk (wife)

$50,000

$28,650.00

($21,350.00)

$28,650.00

Secretary (son)

$45,000

$26,390.00

($18,610.00)

$26,390.00

Product promoter (brother)

$55,000

$25,360.00

($29,640.00)

$25,360.00

Machinist (daughter)

$45,000

$33,410.00

($11,590.00)

$33,410.00

6

Repairs and maintenance

$1,800.00

—

—

$1,800.00

7

Rents

$18,400.00

—

—

$18,400.00

8

Interest

$55,800.00

—

—

$55,800.00

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