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Goldstar'sFinancialConditionAnalysis
forthePeriodfrom01.01.2008to31.12.2010
1.Goldstar'sFinancialPositionAnalysis
1.1.StructureoftheAssetsandLiabilities
1.2.NetAssets(NetWorth)
1.3.FinancialSustainabilityAnalysis
1.3.1.Keyindicatorsofthecompany'sfinancialsustainability
1.3.2.Workingcapitalanalysis
1.4.LiquidityAnalysis
2.FinancialPerformance
2.1.OverviewoftheFinancialResults
2.2.ProfitabilityRatios
2.3.AnalysisoftheBusinessActivity(TurnoverRatios)
3.Conclusion
3.1.KeyIndicatorsSummary
3.2.RatingoftheFinancialPositionandFinancialPerformanceofGoldstar
4.Appendix
4.1.BankruptcyTest(AltmanZscore)
4.2.CalculationoftheFinalRatingoftheFinancialCondition

1.Goldstar'sFinancialPositionAnalysis
The analysis given in this report on Goldstar's financial state and activity efficiency is made for the period from
01.01.2008 to 31.12.2010 based on the financial statements data prepared according to International Financial Reporting
Standards(IFRS).

1.1.StructureoftheAssetsandLiabilities
Value

Changeforthe
analysedperiod

inthousandEUR

Indicator

thousand
%
EUR
((col.5
31.12.2007 31.12.2008 31.12.2009 31.12.2010
atthe
attheendof
beginningof theperiod (col.5col.2) col.2):
col.2)
theperiod
analysed
analysed (31.12.2010)
(31.12.2007)

%ofthebalancetotal

Assets
1.Noncurrent
assets

187,625,543 322,273,637 416,299,008 503,097,289

52

76.4

2.Currentassets,
total

173,184,851 191,660,913 207,513,814 155,460,157

48

23.6

17,724,694

10.2

1.3

<0.1

4,715,208

98.8

35.6

13.6

38,836,715

30.3

2.6

+10,303,095 +144.5

+91,288,759 +38.5

Inventories

4,770,370

4,985,680

76,222

55,162

Tradeand
other
128,380,239 147,904,069 175,094,863 89,543,524
current
receivables
Cashand
cash
equivalents

7,132,445

2,811,891

3,354,882

17,435,540

+315,471,746 +168.1

EquityandLiabilities
1.Equity

236,892,662 263,953,835 296,713,355 328,181,421

65.7

49.8

2.Noncurrent
liabilities

24,814,976 82,295,647 85,046,637 26,441,244

6.9

+1,626,268

+6.6

99,102,756 167,685,068 242,052,830 303,934,781

27.5

46.2

+204,832,025

+3.1
times

AssetsEquityand
360,810,394 513,934,550 623,812,822 658,557,446
Liabilities

100

100

+297,747,052 +82.5

3.Currentliabilities

Accordingtothedatagiveninthetable,theshareofGoldstar'scurrentassetsequalledaboutaquarter(23.6%)onthe
lastdayoftheperiodanalysed(31.12.2010),whilenoncurrentassetsequalledthreequartersoftheallassets.Anincrease
intheassetstoEUR658,557,446thousand(EUR+297,747,052thousand)wasseenduringthereviewedperiod(from31
December, 2007 to 31 December, 2010). The company's assets grew in parallel with equity (+38.5%forthewholeperiod
analysed).GrowthoftheequityvalueisafactorwhichpositivelydescribesthedynamicsofGoldstar'sfinancialstate.
ThetotalgrowthofGoldstar'sassetsvalueisprimarilyconnectedwiththevaluegrowthoftheitem"Othernoncurrent
financialassets"byEUR331,695,629thousand,thatmade92.8%ofallpositivelychangedassets.
Themostsignificantgrowthofsourcesoffinance("EquityandLiabilities")isseenonthefollowingrates(thepercentage
fromtotalequityandliabilitieschangeisshowninbrackets):
OthercurrentfinancialliabilitiesEUR235,841,341thousand(71.2%)
RetainedearningsEUR92,723,023thousand(28%)
Themostsignificantlychangeditemsonthebalancesheetforthereviewedperiod(from31.12.2007to31.12.2010)are
"Trade and other current receivables" in assets and "Trade and other current payables" in sources of finance (EUR
38,836,715thousandandEUR31,194,485thousandrespectively).

TheinventoriesequalledEUR55,162thousandonthelastdayoftheperiodanalysed(31.12.2010).Analterationinthe
inventoriesmadeEUR4,715,208thousandfortheentireperiodanalysed.
ThecurrentreceivablesreducedbyEUR38,836,715thousandforthelast3years.

1.2.NetAssets(NetWorth)
Value

Change

inthousandEUR
Indicator

atthe
beginningof
theperiod
analysed
(31.12.2007)

%ofthebalancetotal
thousand
%,
EUR
((col.3
attheendof 31.12.2007 31.12.2008 31.12.2009 31.12.2010
(col.3col.2), col.2)
theperiod
:
analysed
col.2)
(31.12.2010)

1.Nettangible
assets

236,857,787

328,071,056

65.6

51.3

47.6

49.8

+91,213,269 +38.5

2.Netassets
(Networth)

236,892,662

328,181,421

65.7

51.4

47.6

49.8

+91,288,759 +38.5

3.Issued
(share)capital

21,264

21,264

<0.1

<0.1

<0.1

<0.1

4.Difference
betweennet
assetsand
Issued(share)
capital(line2
line3)

236,871,398

328,160,157

65.6

51.4

47.6

49.8

+91,288,759 +38.5

Onthelastdayoftheperiodanalysed(31.12.2010),thenettangibleassetswereequaltoEUR328,071,056thousand.
That is EUR91,213,269 thousand higher than the level of the net tangible assets on 31 December, 2007. The intangible
assets made EUR 110,365 thousand on 31 December, 2010. This value shows the difference between the value of net
tangibleassetsandallnetworth.

On 31.12.2010, the net worth of Goldstar was much higher (by 15,433.7 times) than the share capital. Such a ratio
positivelydescribesthecompany'sfinancialposition.Thenetworth(netassets)valueisusedasoneofthetoolstoestimate
thecompany'svalue(usedtogetherwithothermethods,suchasdiscountedcashflowmethod,oranestimationbasedon
shareholder'svalueetc.).Butitisakeyvalueintheestimationofthecompany'sfinancialcondition.

1.3.FinancialSustainabilityAnalysis
1.3.1.Keyindicatorsofthecompany'sfinancialsustainability
Indicator
1

Debtto
equityratio
(financial
leverage)

Change
(col.5
31.12.2007 31.12.2008 31.12.2009 31.12.2010 col.2)
Value

0.52

0.95

1.1

1.01

Adebtratioiscalculatedbydividingtotal
liabilities(i.e.longtermandshortterm
liabilities)bytotalassets.Itshowshowmuch
+0.16 thecompanyreliesondebttofinanceassets
(similartodebttoequityratio).
Acceptablevalue:0.6orless(optimum0.3
0.5).

0.34

0.49

0.52

0.5

0.1

0.31

0.29

0.08

Noncurrent
assetstoNet
worth

Capitalization
ratio
Fixedassets

Adebttoequityratioiscalculatedbytaking
thetotalliabilitiesanddividingitby
shareholders'equity.Itisthekeyfinancial
+0.49 ratioandusedasastandardforjudginga
company'sfinancialstanding.
Acceptablevalue:nomorethan1.5
(optimum0.431).

Debtratio
(debtto
assetsratio)

Longterm
debtto
Equity

Theindicatordescriptionandits
recommendedvalue

Thisratioiscalculatedbydividinglongterm
0.02 (noncurrent)liabilitiesbyequity.

0.79

1.22

1.4

1.53

Thisratioiscalculatedbydividinglongterm
(noncurrent)liabilitiesbynetworth(equity)
andmeasurestheextentofacompany's
investmentinlowliquidnoncurrentassets.
+0.74 Thisratioisimportantforcomparison
analysisbecauseit'slessdependenton
industry(structureofcompany'sassets)than
debtratioanddebttoequityratio.
Normalvalue:nomorethan1.25.

0.09

0.24

0.22

0.07

0.02

Calculatedbydividingnoncurrentassetsby
thesumofequityandnoncurrentliabilities.
Thisratioindicatestheextenttowhichthe

toNetworth

Current
liabilityratio

0.03

0.02

0.02

0.01

0.8

0.67

0.74

0.92

owners'cashisfrozenintheformoffixed
0.02 assets,suchasproperty,plant,and
equipment,investmentpropertyandnon
currentbiologicalassets.
Normalvalue:0.75orless.
Currentliabilityratioiscalculatedbydividing
+0.12 noncurrentliabilitiesbytotal(i.e.currentand
noncurrent)liabilities.

Firstly, attention should be drawn to the debttoequity ratio and debt ratio as the indicators describing the capital
structure. Both ratios have similar meaning and indicate that if there is not enough capital (equity) for stable work for the
company.Debttoequityratioiscalculatedasarelationshipoftheborrowedcapital(liabilities)totheequity,whiledebtratio
iscalculatedasarelationshipoftheliabilitiestotheoverallcapital(i.e.thesumofequityandliabilities).
Onthelastdayoftheperiodanalysed,thedebttoequitywasequalto1.01.Onthelastdayoftheperiodanalysed,the
debtratioequalled0.5.Forthelast3years,itwasmonitoredthattherewasanotableincreaseinthedebtratio(+0.16).
ThedebtratiodescribesGoldstar'sfinancialconditionasagoodoneon31.12.2010,thepercentageofliabilitiesmakes
50.2%, while a maximum acceptable percentage is deemed to be 60%. The values of the debt ratio corresponded to
acceptableonesduringthewholeperiod.
Inthediagrambelow,onecanseethestructureofthecompany'scapital:

Accordingtocommonrules,noncurrentinvestmentsshouldbemade,inthefirstplace,withthehelpofthemoststable
sourceoffinancing,i.e.withthehelpofownedcapital(equity).ThenoncurrentassetstoNetworthratioshowsifthisruleis
followed.Attheendoftheperiod,theratioequalled1.53.Duringthelast3years,theratiowasfoundtospikerapidlyby
0.74,additionally,thesimilartendencyisprovenwithalineartrendduringtheperiod.Onthelastdayoftheperiodanalysed,
thevalueoftheratioisnotasatisfactoryone.
The current liability ratio (0.92) shows that the amount of longterm debts of Goldstar is significantly lower than the
amount of shortterm debts on 31.12.2010, (8% and 92% respectively of total liabilities). Liabilities with short maturity are
less preferred than longterm liabilities from positions of financial stability. In relation to this, the company should be more
carefulwhenborrowingshorttermcapital.
ThedynamicsofthemainratiosoffinancialstabilityofGoldstarisshowninthefollowingdiagram.

1.3.2.Workingcapitalanalysis
Changeforthe
periodanalysed

Value
Indicator
31.12.2007 31.12.2008 31.12.2009
1

31.12.2010
5

%
((col.5
(col.5col.2)
col.2):
col.2)
6

1.Workingcapital(networkingcapital),
thousandEUR

+74,082,095 +23,975,845 34,539,016 148,474,624 222,556,719

2.Inventories,thousandEUR

+4,770,370 +4,985,680

3.Workingcapitalsufficiency(12),
thousandEUR

+69,311,725 +18,990,165 34,615,238 148,529,786 217,841,511

4.Inventorytoworkingcapitalratio(2:1)
Normalvalue:1orless.

0.06

0.21

+76,222

<0.01

+55,162

<0.01

4,715,208

0.06

98.8

Goldstar's working capital has a negative value (EUR 148,474,624 thousand) on the last day of the period analysed
(31.12.2010). This means that current liabilities exceed current assets. In such a situation it makes no sense to compare
workingcapitalwithinventoriesofthecompany.Undernormalconditions,theinventorytoworkingcapitalratioshouldnotbe
lessthan1.

1.4.LiquidityAnalysis
One of the most widespread indicators of a company's solvency are liquidity related ratios. There are three liquidity
relatedratios:currentratio,quickratioandcashratio.Currentratioisoneofthemostwidespreadandshowstowhatdegree
the current assets of the company are meeting the current liabilities. The solvency of the company in the near future is
described with the quick ratio which reflects if there are enough fund's for normal execution of current transactions with
creditors.AllthreeratiosforGoldstararecalculatedinthefollowingtable.
Change
Value
Liquidity
Theindicatordescriptionanditsrecommended
(col.5
indicator 31.12.2007 31.12.2008 31.12.2009 31.12.2010
value
col.2)
1

1.Current
ratio
(working
capital
ratio)
2.Quick
ratio
(acidtest
ratio)

3.Cash
ratio

1.75

1.7

0.07

1.14

1.11

0.02

0.86

0.86

0.01

0.51

Thecurrentratioiscalculatedbydividing
currentassetsbycurrentliabilities.Itindicatesa
1.24 company'sabilitytomeetshorttermdebt
obligations.
Acceptablevalue:2ormore.

0.51

Thequickratioiscalculatedbydividingliquid
assets(cashandcashequivalents,tradeand
othercurrentreceivables,othercurrentfinancial
assets)bycurrentliabilities.Itisameasureofa
1.19
company'sabilitytomeetitsshortterm
obligationsusingitsmostliquidassets(near
cashorquickassets).
Normalvalue:nolessthan1.

0.06

Cashratioiscalculatedbydividingabsolute
liquidassets(cashandcashequivalents)by
0.01
currentliabilities.
Normalvalue:nolessthan0.2.

Thecurrentratioequalled0.51attheendoftheperiodanalysed.Forthe3years,thecurrentratiosignificantlydropped
(1.24). The value of the ratio equal to can be described as obviously critical on 31.12.2010. The current ratio kept an
atypicalvalueduringthewholeoftheevaluatedperiod.
Thequickratiowasequalto0.51on31.12.2010.Forthereviewedperiod(31.12.0731.12.10),thequickratiowasfound
toundergoasignificantdecreaseof1.19,moreover,tendencyofthequickratiotofallisalsoprovenwithanaverage(linear)
trend.Adecreaseintheratiowasmonitoredduringthewholeoftheperiod.Onthelastdayoftheperiodanalysed,thevalue
ofthequickratiocanbedeemedasanunsatisfactoryone.ItmeansthatGoldstardoesnothaveenoughassetswhichcan
betransferredtomonetaryfundsinaveryshorttimetomeetcurrentliabilities.
The value of the third rate, the cash ratio, like of the two previous rates, does not lie in the acceptable range on
31.12.2010.Goldstarisobservedtohaveadeficitofcashandcashequivalentstomeetcurrentliabilities.

AllthreeliquidityrelatedratiosnegativelydescribethestructureoftheStatementoffinancialpositionofGoldstarfromthe
pointofviewofsolvency.

2.FinancialPerformance
2.1.OverviewoftheFinancialResults
The table below tells us about the main financial results of Goldstar's activities for the period analysed (from 31
December,2007to31December,2010).
Value,thousandEUR
Indicator

Change

2008

2009

2010

thousand
EUR
(col.4
col.2)

%
(42)
:2
6

Average
annual
value,
thousand
EUR
7

1.Revenue

693,032,679 609,821,837 623,979,575 69,053,104

2.Costofsales

566,143,059 489,837,720 512,028,603 54,114,456 9.6 522,669,794

3.Grossprofit(12)

126,889,620 119,984,117 111,950,972 14,938,648 11.8 119,608,236

4.Otherincomeandexpenses,except
Financecosts

52,797,606 26,430,917 19,887,930 +32,909,676

5.EBIT(3+4)

74,092,014 93,553,200 92,063,042 +17,971,028 +24.3 86,569,419

5a.EBITDA

64,355,648 83,788,550 82,288,391 +17,932,743 +27.9 76,810,863

6.Financecosts

2,378,700

6,308,164

4,520,565

7.Incometaxexpense(fromcontinuing
operations)

16,583,554

22,117,859

20,350,754 +3,767,200 +22.7 19,684,056

8.Profit(loss)fromcontinuingoperations
(567)

55,129,760 65,127,177 67,191,723 +12,061,963 +21.9 62,482,887

9.Profit(loss)fromdiscontinued
operations
10.Profit(loss)(8+9)
11.Othercomprehensiveincome
12.Comprehensiveincome(10+11)

+2,141,865

10 642,278,030

+90

33,038,818

4,402,476

55,129,760 65,127,177 67,191,723 +12,061,963 +21.9 62,482,887

55,129,760 65,127,177 67,191,723 +12,061,963 +21.9 62,482,887

The revenue was equal to EUR 623,979,575 thousand for the year 2010, though the revenue was higher EUR
693,032,679thousand(i.e.thedropequalledEUR69,053,104thousand).Thediagrambelowdemonstratesthechangein
revenueandacomprehensiveincomeforGoldstar.ThegrossprofitequalledEUR111,950,972thousandduringtheperiod
01.0131.12.2010. During the period analysed, the gross profit appreciably dropped (by EUR 14,938,648 thousand, or by
11.8%).

Forthelastyear,thecompanypostedagrossprofitandearningsbeforeinterestandtaxes(EBIT),whichmadeEUR
92,063,042 thousand in total. The final comprehensive income of Goldstar made EUR 67,191,723 thousand during the
periodfrom01.01.2010to31.12.2010.

2.2.ProfitabilityRatios
Profitabilityratios

Valuein%
2008

2009

1.Grossmargin.

18.3

19.7

17.9

0.4

2.Returnonsales(operatingmargin).

10.7

15.3

14.8

+4.1

10.7

10.8

+2.8

31.1

14.8

20.4

10.8

3.Profitmargin.
Reference:
Interestcoverageratio(ICR).Normalvalue:nolessthan1.5.

2010

Change
(col.4col.2)

For the period 01.0131.12.2010, the company gained gross profit and profit from operational and financial activities,
whichbecameareasonforpositivevaluesofallthreeprofitabilityratiosgiveninthetableforthisperiod.Thegrossmargin
wasequalto17.9%duringthelastyear.Duringtheentirereviewedperiod,thegrossmarginmoderatelydecreased.
Theprofitabilitycalculatedbyearningsbeforeinterestandtaxes(Returnonsales)ismoreimportantfromacomparative
analysespointofview.The return on sales made 0.15 or 14.8% per annum during the year 2010, while the profit margin
made10.8%perannum.

Toassesstheliabilitiesthatthecompanyshouldrepayfortheuseofborrowedcapital,aninterestcoverageratiowas
calculated.Theacceptablevalueisdeemedtobenotlessthan1.5.Inthiscase,theinterestcoverageratiomade20.4for
theyear2010,whichisevidenceofGoldstar'scapabilitytopayinterestonborrowedassets.Itshouldtakeintoaccountthat
notallinterestpaymentscanbedescribedintheStatementofcomprehensiveincome.Incertaincasesinterestisincludedin
investmentsinnoncurrentassetsandasaresultitisnotusedtocalculatetheindicatedratio.
Change
Value,%
Profitability
(col.4
ratios
2008 2009 2010 col.2)
1

Returnon
equity
(ROE)
Returnon
assets
(ROA)
Returnon
capital
employed
(ROCE)

23.2 21.5

0.5

ROEiscalculatedbytakingayear'sworthofearnings(netprofit)anddividing
thembytheaverageshareholderequityforthatperiod,andisexpressedasa
percentage.Itisoneofthemostimportantfinancialratiosandprofitability
metrics.Normalvalue:12%ormore.

12.6 11.4 10.5

2.1

22

24.3 25.7

Theindicatordescriptionanditsreferencevalue

25

+0.7

ROAiscalculatedbydividingnetincomebytotalassets,anddisplayedasa
percentage.Normalvalue:6%ormore.
ROCEiscalculatedbydividingEBITbycapitalemployed(equityplusnon
currentliabilities).Itindicatestheefficiencyandprofitabilityofacompany's
capitalinvestments.

During the year 2010, the return on assets equalled 10.5%. A lowering in the return on assets made 2.1% for the
reviewedperiod(from31.12.2007to31.12.2010).Thevaluesofthereturnonassetswereequaltonormalonesduringthe
wholeevaluatedperiod.
Akeyindicatorofbusinessprofitabilityisthereturnofequity(ROE),i.e.returnfrommoneyinvestedbytheowners.The
profitabilityoftheowners'investmentsinGoldstar'sassetsmade21.5%perannumduringthelastyear.Itisahighrate,but
itisinfluencednotonlywithfactorsinsidethecompany,butalsotheeconomicenvironmentwherethecompanyislocated
(inflationrate,interestrates,etc).
The following diagram demonstrates the dynamics of the main rates of return on total assets and equity of Goldstar
duringthewholereviewedperiod.

2.3.AnalysisoftheBusinessActivity(TurnoverRatios)
Further in the table, the calculated rates of turnover of assets and liabilities describe how fast prepaid assets and
liabilitiestosuppliers,contractorsandstaffarereturnedcanbefound.Turnoverrateshavestrongfieldspecificsanddepend
onactivity.Thatiswhyanabsolutevalueoftheratedoesnotallowmakingits'qualitativeassessment.Whenassetsturnover
ratiosareanalysed,anincreaseinratios(i.e.velocityofcirculation)andareductionincirculationdaysaredeemedtobe
positivedynamics.Thereisnowelldefineddependenceforaccountspayableandcapitalturnover.Inanycase,anaccurate
conclusioncanonlybemadeonlyafterthereasonsthatcausedthesechangesareconsidered.
Value,days
Ratio Ratio Change,days
(col.4col.2)
2008 2009 2010 2008 2010

Turnoverratio
1

Receivablesturnover(dayssalesoutstanding)
(averagetradeandothercurrentreceivablesdividedbyaveragedailyrevenue*)

Accountspayableturnover(dayspayableoutstanding)
(averagecurrentpayablesdividedbyaveragedailypurchases)

73

97

77

4.7

+4

44

61

49

8.4

7.5

+5

<1

231

340

375

1.6

+144

96

119

106

3.8

3.4

+10

132

168

183

2.8

+51

33

38

29

Inventoryturnover(daysinventoryoutstanding)
(averageinventorydividedbyaveragedailycostofsales)

Assetturnover
(averagetotalassetsdividedbyaveragedailyrevenue)

Currentassetturnover
(averagecurrentassetsdividedbyaveragedailyrevenue)

Capitalturnover
(averageequitydividedbyaveragedailyrevenue)

Reference:
Cashconversioncycle

115.7 7,794.4

(dayssalesoutstanding+daysinventoryoutstandingdayspayableoutstanding)
*Calculationindays.Ratiovalueisequalto365dividedbydaysoutstanding.

According to the table, the average collection period (days sales outstanding), calculated based on the data for the
period from 01.01.2010 to 31.12.2010, was 77 days, while average repayment period for credit debts (days payable
outstanding)was49days.TherateofassetturnovermeansthatGoldstargainsrevenueequaltothesumofalltheavailable
assetsfor316days(onaverageduringtheentirereviewedperiod).

3.Conclusion
3.1.KeyIndicatorsSummary
The main financial state indicator values and Goldstar's activity results are classified by qualitative assessment
accordingtotheresultsoftheanalysisduringthe3yearsandaregivenbelow.
ThefollowingratesdescribetheGoldstar'sfinancialstatefromanexcellentpointofview:
highreturnonequity(21.5%perannum)

returnontotalassetsmadeduringthelastyear10.5%perannum
networth(netassets)ofthecompanyismuchhigher(by15,433.7times)thanthesharecapitalon31.12.2010
Theanalysisrevealedthefollowinggoodfinancialrates:
thepercentageofliabilitiesinthetotalbalanceofGoldstarmakes50.2%whichisnormalforstableactivity
earningsbeforeinterestandtaxes(EBIT)madeEUR92,063,042thousandforthelastyear,althoughanegative
dynamicscomparedwiththepreviousvalue(EUR+17,971,028thousand)wasobserved
incomefromfinancialandoperationalactivities(comprehensiveincome)madeEUR67,191,723thousandduringthe
period01.0131.12.2010
Thefollowingrateisthefinancialratewiththevaluewhichbordersontheedgeofstandardtheincreaseinequityfor
the3yearswaslowerthanthegrowthratesoftotalassets.
OnecanhighlightthefollowingvaluesofGoldstar'sfinancialrateswithnegativevalues:
thevalueofthenoncurrentassetstonetworthratioequalto1.53isnotanormalone
aquickratiomade0.51(whiletheacceptablevaluemakes1)
thecashratioisequalto0.06onthelastdayoftheperiodanalysed(31.12.2010)(alowcashinhandlevelrequired
forcurrentpayments)
Thefollowingratesdescribethefinancialstateascriticalcritical:
thecurrentratio(0.51)issignificantlylowerthanthestandardvalue(2)
notenoughlongtermresourcesoffinancingcompanyactivity(noworkingcapital)

3.2.RatingoftheFinancialPositionandFinancialPerformanceofGoldstar
Financial
Financialpositionon31.12.2010
performanceforthe
periodanalysed
AAA AA A BBB BB B CCC CC
(01.01.0831.12.10)

Finalratingofthefinancial
conditionofGoldstar(period
analysed:from01.01.2008to
31.12.2010analysisstep
year):

Excellent(AAA)

Verygood(AA)

Good(A)

BB
(normal)

Positive(BBB)

Normal(BB)

Satisfactory(B)

Unsatisfactory(CCC)

Adverse(CC)

Bad(C)

Critical(D)

Thefollowingconclusionsweremadebasedonaqualitativeassessmentoftheratesattheendoftheperiodanalysed,
their dynamics during the period and the forecast for the next year. Scores of the financial position and activity results of
Goldstarwere0.34and+1.36respectively,i.e.thefinancialpositionischaracterizedassatisfactorythefinancialresultsare
describedasverygoodfortheperiodanalysed(from31December,2007to31December,2010).Thesetwoscoreswere
usedtocalculatethefinalratingscoreofthecompany'sfinancialcondition,whichmadeBB(normalcondition).
"BB"describesthefinancialconditionofacompanywhenthemajorityofratesarenormal.Companieswiththisrating
shouldbeconsideredasbusinesspartnerswhowillneedtobetreatedcarefullywhenmanagingrisks.Thesecompaniescan
layaclaimtoobtaincreditbutadecisionmainlydependsontheanalysisofadditionalfactors(neutralcreditworthiness).

4.Appendix
4.1.BankruptcyTest(AltmanZscore)
TheAltmanZscorewascalculatedtopredicttheprobabilityofthecompany'sbankruptcy(a4factormodelforaprivate
nonmanufactureristakenforGoldstar):
Zscore=6.56T1+3.26T2+6.72T3+1.05T4,where
Ratio
1

Calculation

Ratiovalueon
31.12.2010

Weighting
factor

Product
(col.3xcol.4)

WorkingCapital/TotalAssets

T1

0.23

6.56

1.48

T2

RetainedEarnings/TotalAssets

0.48

3.26

1.56

T3

EarningsBeforeInterestandTaxes/Total
Assets

0.14

6.72

0.94

T4

Equity/TotalLiabilities

0.99

1.05

1.04

AltmanZscore:

2.07

ZonesofDiscrimination:
1.1orlessDistressZone
from1.1to2.6GreyZone
2.6ormoreSafeZone
According to calculations, at the end of the period reviewed, the Zscore equalled 2.07 for Goldstar. It means that
Goldstar is in the risk zone and there is a probability of its' bankruptcy. Despite the good results obtained, it should be
mentioned that the Altman Zscore predicts the company's bankruptcy probability is only relative and the final conclusion
shouldbemadebasedonresultsofdeeperanalysis.

4.2.CalculationoftheFinalRatingoftheFinancialCondition
Indicator

Weighting
factor

Averagescore
Weightedaverage
(col.3x0.25+col.4x0.6+col.5
score
past present future
x0.15)
(col.2xcol.6)
Score

I.Ratingofthecompany'sfinancialposition
Debtratio

0.3

+2

+1

+1

+1.25

+0.375

Noncurrentassetstonet
worth

0.15

+1

0.5

0.075

Currentratio

0.2

1.75

0.35

Quickratio

0.2

+2

0.4

0.08

Cashratio

0.15

1.4

0.21

Total

Finalscore(intotalcol.7:col.2):

0.34

II.Ratingofthecompany'sfinancialperformance
Returnonequity(ROE)

0.5

+2

+2

+2

+2

+1

Returnonassets(ROA)

0.3

+2

+2

+1

+1.85

+0.555

Salesgrowth

0.2

0.2

Total

Finalscore(intotalcol.7:col.2):

+1.355

ThefinalratingscoreofGoldstar'sfinancialcondition:(0.34x0,6)+(+1.355x0,4)=+0.34(BBnormal)
Reference:Financialconditionscale
Totalscore
from

to

Sign

Thequalitativeassessmentofafinancialcondition

(inclusive)

1.6

AAA

Excellent

1.6

1.2

AA

Verygood

1.2

0.8

Good

0.8

0.4

BBB

Positive

0.4

BB

Normal

0.4

Satisfactory

0.4

0.8

CCC

Unsatisfactory

0.8

1.2

CC

Adverse

1.2

1.6

Bad

1.6

Critical

ThisreportwasautomaticalygeneratedbyReadyRatiossoftware.Knowledgeoffinancialanalysisisnotrequired!Our
keyprincipleisMakethecomputerthink!