### ATTACHMENT BFORMULAS FOR BALANCE SHEET ADJUSTMENTS

 Definitions of Variables: AP = average accounts payable AR = average trade accounts receivable, net of allowance for bad debt cogs = cost of goods sold INV = average inventory, stated on FIFO basis opex = operating expenses (general, sales, administrative, and depreciation expenses) PPE = property, plant, and equipment, net of accumulated depreciation sales = net sales tc = total cost (cogs + opex, as defined above) h = average accounts payable or trade accounts receivable holding period, stated as a fraction of a year i = interest rate t = entity being tested c = comparable
Equations:
If Cost of Goods Sold is controlled (generally, sales in denominator of PLI):
Receivables Adjustment (“RA”):   RA = {[(ARt / salest) x salesc] - ARc} x {i/[1+(i x hc)]}
Payables Adjustment (“PA”):   PA = {[(APt / salest) x salesc] - APc} x {i/[1+(i x hc)]}
Inventory Adjustment (“IA”):   IA = {[(INVt / salest) x salesc] - INVc } x i
PP&E Adjustment (“PPEA”):   PPEA = {[(PPEt / salest) x salesc] - PPEc} x i
If Sales are controlled (generally, costs in the denominator of PLI):[a]
Receivables Adjustment (“RA”):   RA = {[(ARt / tct) x tcc] - ARc} x {i/[1+(i x hc)]}
Payables Adjustment (“PA”):   PA = {[(APt / tct) x tcc] - APc} x {i/[1+(i x hc)]}
Inventory Adjustment (“IA”):   IA = {[(INVt / tct) x tcc] - INVc } x i
PP&E Adjustment (“PPEA”):   PPEA = {[(PPEt / tct) x tcc] - PPEc} x i