To complete this worksheet, please determine the following values from your most recent audited financial statements. Such statements should cover a full year's (i.e. 12 months) operations. Please contact your accountant/CPA for assistance if needed.

1. Unrestricted net assets. Unrestricted net assets is the result of subtracting from total assets, the total liabilities.	___________ (1)
2. Temporarily restricted net assets. This amount is the total net assets that are restricted for use, as opposed to the preceding Unrestricted net assets. Both values come straight from the balance sheet.	___________ (2)
3. Annuities, term endowments, life insurance funds. Any amounts that have been restricted by the board of directors for such use.	___________ (3)
4. Intangible assets. This amount is the total of such assets as goodwill, non-compete agreements, licenses and franchise, net of amortization.	__________ (4)
5. Net Property, Plant and Equipment. The total of all "fixed" assets, such as furniture, fixtures, equipment, vehicles, buildings, land, library, etc., less all allowances for depreciation and amortization of those same assets. Capitalized lease obligations, net of related depreciation, are to be included.	__________ (5)
6. Total Assets. This amount is the total amount of assets shown on the final line of the assets portion of the balance sheet.	__________ (6)
7. Post Employment and Retirement Liabilities. Amounts owed to, or on behalf of, former employees for items such as retirement benefits, accumulated sick pay, bonus arrangements are examples of such liabilities. Such liabilities that have been identified and determined are generally required to be recorded in the accounting records, but are frequently missed. If determined and known, such amounts are to be recorded here.	__________ (7)
8. Total Long-Term Debt. "Long-term" debt means an obligation that will not be totally repaid within one year, or the operating cycle of the business, whichever is longer. Total long-term debt includes debt such as notes payable, bonds payable, capitalized leases, mortgages and notes owed to stockholders (depending upon the nature of the obligation), etc. The total long-term debt is determined before the deduction of current maturities, i.e. that part that will be repaid within one year, or the operating cycle of the business.	__________ (8)
9. Total Expenses. Total expenses is all expenses from the statement of activities, but only for expenses included in "Other Income and Expenses". However, income tax expense, expense of discontinued operations, extraordinary losses, or changes in accounting principles are not included.	__________ (9)
10. Unsecured related-party receivables. Any amounts owed to the school by directors, related other business entities, direct family members thereof, which are not secured, are to be included.	__________ (10)
11. Permanently restricted assets. Assets that are unavailable for disposal or alteration without board approval or usually very restrictive actions or unusual circumstances	__________ (11)
12. Change in Unrestricted Net Assets. This amount is taken directly from the audited financial statements and is the change in the amount of net assets - unrestricted - for the fiscal year.	__________ (12)
13. Total Unrestricted Revenue. This amount is taken directly from the financial statements. This amount includes net assets released from restriction during the fiscal year.	__________ (13)

Once you have determined that above amounts, continue to calculate the following ratios:

Primary Reserve	STEP 1: Write the value of (1) - Unrestricted net assets - here:	__________ (A)
	STEP 2: Write the value of (2) - Temporarily restricted net assets - here:	__________ (B)
	STEP 3: Write the value of (3) - Annuities, life insurance income funds, etc. - here:	__________ (C)
	STEP 4: Write the value of (4) - Intangible assets - here:	__________ (D)
	STEP 5: Write the value of (5) - Net property, plant and equipment - here:	__________ (E)
	STEP 6: Write the value of (7) - Post employment and retirement liabilities - here:	__________ (F)
	STEP 7: Write the value of (8) - Total Long-Term Debt - here: _____________ (G1) Write the value of (5) again here: _____________ (G2) Compare (G1) and (G2) and write the small amount here:	__________ (G)
	STEP 8: To (A): add (B), subtract (C), (D) and (E) and add (F) and add (G). Enter the result:	__________ (H)
	STEP 9: Write the value of (9) - Total Expenses - here:	__________ (I)
	STEP 10: Divide the value of (H) by (I) and enter the result here:	__________ (I)
Equity
	STEP 11: Write the value of (1) - Unrestricted net assets - here:	__________ (A)
	STEP 12: Write the value of (2) - Temporarily restricted net assets - here:	__________ (B)
	STEP 13: Write the value of (11) - Permanently restricted assets - here:	__________ (C)
	STEP 14: Write the value of (4) - Intangible assets - here:	__________ (D)
	STEP 15: Write the value of (10) - Unsecured related-party receivables - here:	__________ (E)
	STEP 16: To (A) add (B) and (C), then subtract (D) and (E). Enter the result here:	__________ (F)
	STEP 17: Write the value of (6) - Total Assets - here:	__________ (G)
	STEP 18: From (G) subtract (D) and (E). Enter the result here:	__________ (H)
	STEP 19: Divide the value of (F) by the value of (H). Enter the result here:	__________ (II)
Net Income
	STEP 20: Write the value of (12) - Change in Unrestricted Net Assets - here:	__________ (A)
	STEP 21: Write the value of (13) - Total Unrestricted Revenue - here:	__________ (B)
	STEP 22: Divide the value of (A) by the value of (B). Enter the result here:	__________ (III)
After calculating the above ratios, those ratios must then be converted to a "Strength-Factor Score". Therefore, proceed as follows. HOWEVER, NO VALUE DETERMINED IN THIS STEP CAN RESULT IN A VALUE GREATER THAN 3.0 OR LESS THAN -1.0!
	STEP 23: Record the Primary Reserve ratio - (I) above - here: __________ Multiply the Primary Reserve ratio by 10 and record the result here:	__________ (IV)
	STEP 24: Record the Equity ratio - (II) above - here: __________ Multiply the Equity ratio by 6 and record the result here:	__________ (V)
	STEP 25: Record the Net Income ratio - (III) above - here: __________ Multiply the Net Income ratio by 50 and add 1 to the result if the Net Income ratio if a positive number. If the Net Income ratio is a negative number, multiply by 25 and add 1. If the Net Income ratio is 0, then just write the number "1". Record the result here:	__________ (VI)
After calculating the "Strength-Factor" scores above, the next step is to calculate the "Weighted" score as follows:
	STEP 26: Multiply the Primary Reserve strength-factor score - (IV) - by 40% (.3)	__________
	STEP 27: Multiply the Equity strength-factor score - (V) - by 40% (.4)	__________
	STEP 28: Multiply the Net Income strength-factor score - (VI) - by 20% (.3)	__________
Final Step: Add the values determined in STEPS 26, 27 and 28 together. The result is your final Composite score:		=========

Institutions with Composite scores less than 1.0 will be required to submit financial guarantees. Institutions with Composite scores between 1.0 and 1.4 will be considered "in the zone" and will be subject to additional monitoring. Institutions with Composite scores 1.5 or greater will be considered fully financial responsible.