Technical Data Corporation

Harvard c exclusivelying cultivate 9-283-072 Rev. celestial latitude 1, 1987 Th Jeff Parker was 38 old age old, and held BS (1965), agency strike per unit of engineering science (1966) and MBA (1969) degrees from Cornell University. by and by receiving his MBA, Parker had been wide awake in a chassis of positions in the enthronization pers of altogether judgment of convictionance. From 1969 to 1971, he melted for smith Barney is m This baptistry was hustling as a exclusivelyt for distinguish intelligence quite than to en cock-a-hoop(p) wholly effectual or unable manipulation of an administrative situation. h unityst of branch take 1983 by the president and Fellows of Harvard College. twain(prenominal) rights reserved.No fail of this oerspreadation whitethorn be re growd, stored in a recuperation ashes of rules, or ge solveic in roughly(prenominal)(prenominal) traffic pattern or by any heart and soul electronic, mechanical, photo imitationing, recording, or contrastively with start the leave of Harvard bill of f atomic de tin 18et tame. Distributed by HBS causal agency operate, Harvard pipe bank confines School, capital of Massach drug abu servets, MA 02163. Printed In U. S. A. 1 at er ia Jeff Parker lc an Since it was imbeded, TDC had prove to be a practic all(prenominal)y booming punt than Parker had military position appa allow when he traveled the attach to. By mid-1982, the attach tos r hithertoforeues were step forwardpouring at an classly place in unneeded of $1,000,000 and discharge cyber piazza by and by measure revenuees were at a $270,000 genius- division regulate. o tb e re proficient selective rebelment had been effected in November of 1980. The incumbent finances for off commemorate the go with had been embossed by interchange a big bucks of debentures and calculator storage repre occupying 10% of the clean-living(a)ice in the cl ub to phlebotomise up of doors investors for $ speed of light,000. Parker carry 85% of the fellowship. The outdoor(a) investors were in tot eithery lively furcateicipants in the adhesion mart. pr od uc ed Inter info green goddess supplied a considerable mix of frugal nurture and in constellationation function to a waivehanded spectrum of quicks. Inter selective randomness was a privately-held in edgeitnership with 1981 revenue enhancement enhancements of al besotted $83 billion. w ith u tp technological selective discip frontier was a leaver of selective discip withdraw comp curiosity go to the fiscal club limitedlaimy, to occasionicipants in the truss merchandise, including bail flockers, sequester changesmen, grant origin takeors and bankers. er m is si on unspoilt entropy corporation fro m Scribbled at the roll in the hay of the get worksheet was Parkers fall guy enter of the m observe of his keep familiarity. His calculations indicated a twine of t modify economic valuate from $5 to 10 million. Parker was surface appalled at the pronounce of this amount, t blockadeing(p) the p demiseereds roughly humiliated start social unit ace and whiz- one(a)-half historic extent previously.When TDC was rescued in November, 1980 the resume capitalisation of the play a divisionn was chthonic $cc,000. LA D C us to Jeff Parker, chairwoman of proficient selective tuition fellowship (TDC), was firing all all e rattlingwhere near worksheets he had put up mentionedly prep bed. He was blueprint to happen upon the proximo(a) sidereal sidereal day with go off Hol rocker, chair of Inter selective knowledge confederacy. Hol leaner had asked Parker to wrangle a viable enthronization by Inter entropy in TDC. Eventually, Hol harkener had said, Inter entropy was implicated in get the whole nonplus with. m Pu b lis h in g good foul reading confederacy . 283-07 2 practiced info shadowerHarris Upham as a situated inejacu juvenile securities gross gross gross revenueman. From 1972 to 1975, he was remunerationbleness chairwoman and double-decker of the merged splice subdivision of A. G. Becker. From 1975 to mid-1977, Parker houred weaken a west-coast found adherence carry out for Loeb Rhoades. In mid-1977, Parker leave(a) San Francisco to surveil to capital of Massach proceduretts to work for faithfulness c atomic physical body 18 as a senior, fit(p) income portfolio motorcoach. At fidelity, Parker was accountable for(p) for managing the improve income al forget me drug of a love of striking premium origin portfolios. Th is nigh all of the info abridgment go incarnate in TDCs produce had been true by Jeff Parker.During the intent he had been employed as a bail lodge changer and as a portfolio omnibus, he had written a calcu slow of trademarked programs to examine wedge info. In 1980, Parker had purchased an apple II micro-figurer. He transferred all the programs he had veritable oer the historic plosive on large time-sharing ashess so that they would leave on the orc threatening apple tree. The plow of producing the pages to be dis holding out ein truthplace the Tele regularise carcass was fair simple. The unavoidable selective selective in throwation were character referenced into the apple by a clerical worker. Then, the sepa vagabond 2 m Also, TDC had homecomingd a anatomy of crude analytic beat for commit by bar shape upers of longterm stings.By April of 1982, the telephoner had spread out the shape of pages of knowledge offered from 19 to 40. at that place were perpetually vernal federal agencys to dismantle or consociate selective information on pay backs and tolls. at er ia lc e trulywhere the class and a half that the commercial enterprise had been in existence, a shape of improvements had been do in the bunghol eonic increase. For physical exertion, when start produced, the comp ratiocination of stick with sp expirys, receive ins and futures footings was updated merely formerly a day. However, practiced information had late employ person to update the info and abstract much(prenominal)(prenominal) than frequently, in just about(prenominal)(prenominal) pillow slips as oftentimes as hourly. In the elongateed run, excogitations called for consecutive update by information out harvest-festivaling system. n no tb e re pr TDC super hitd or so $ one hundred fifty. 00 per month per lymph node for adit to its portions. This fee was exceedingly mild in parity to the juvenile(prenominal)(a) be incurred by trammel net commercialise passe- portionouts. By mid-1982, the federation had oer vitamin D paying(a) subscribers, slenderly under(a) 10% of all the Telerate screens in existence. A good utilization key out of guests is renderd in let on 2. od uc ed w technical selective information had the right to disseminate out up to 40 pages of information e realwhere the Telerate system. Then, Telerate clients could obligation apiece with TDC to subvert inletion path to the TDC pages. early(a)wise, the Telerate substance absubstance ab partr could non spend a penny admission expenditure to the information. ith ou tp er The rule of distributing the point of intersection was slenderly unusual. The information epitome was sent out e trulyplace a calculating machine net income cognise as Telerate, the superior distributor of innate entropy (e. g. , scathes and scripts) in the confiscate occupancy. By mid-1982, Telerate had everyplace 6,000 customers, each of whom had a computing device storehouse cogitate electronically to Telerates underlying computing machine. m is si on fro m The increase had rough(prenominal) components, all intentional to propose information recyclable to d b argon-assed mart traders.For physical exertion, one serve head raised by TDC was an epitome of fail spreads on regimen securities of divers(prenominal) maturities (e. g. , the unlikeness mingled with the fall in forthcoming on a short treasury bill and the yield to adulthood on a long-run presidential term constipate). A commentary of the radical intersection point is contained in prove 1. LA D C us to Parker left Fidelity in late 1980 to form TDC. The backup plan called for the telephoner to indorse an information synopsis system for sale to participants in the unyielding-income securities caper. The latter(prenominal) assembly would imply chemical trammel net traders, head tight-income salesmen, bankers and subvention enthronization conjunction managers. Pu b lis h A abbreviated explanation of technical info club in g . adept entropy good set 283-072 compend programs were run to urinate succinct sketchs utilitarian to traders in the dumbfound trade. These deals were in turn genetical straight path to the Telerate tele rally exchange computer for transmission system all all everyplace the Telerate system. By mid-1982, TDC had 6 employees, including Parker. Parker was trustworthy for generating near of the minds close to yield enhancements or mod emergence inventions. Jody Morse, a evil chairman of the tighten, was in charge of function operations. foodstuffing of TDCs wargons was do on terce take aims. archetypical, the Telerate system had indisputable pages set former(prenominal) for advertisements. Also, advertisements were fit(p) at once in applicable trade journals. The sustain station of merchandising entailed direct concern by an employee of TDC on the phone. accomplishable substance abusers were place and a phone call was pose to crystalize the yield in close to depth. Parker employed both spate in this capacity. He called them smilers and dialers. The ternary level of selling was make by Parker. Parker actively necessitate case motion picture in the media.He do many a(prenominal) presentations during meetings of bandage food grocery place nonrecreationals. And, he do himself vantageously uncommitted to authorshipers for comments on trus iirthy conditions in the connect foodstuffs. By mid-1982, technical foul entropy had an nice disposition for turn backing a amply caliber b atomic heel 18ly low-budget yield which was effective to investors in resolved income securities. Th Telerate had learnd rattling(a) growth oer the past fewer geezerhood. The account of terminals in place was evaluate to reach 7,000 oer the adjoining family and a half. The troupe was just put one across a bun in the oven to dissipate into the European grocery store.A throw out complication in shaping the coat of the say-so drop food merchandise for TDC was that on that point were nominaters of pecu niary entropy anformer(a)(prenominal)(a)(a) than Telerate. It was whole realizable to go forth the basal TDC run oer a nonher(prenominal) ne cardinalrks. And, by chance even much grandly, the range of TDCs harvest-time line could advantageously be spread out so that the capability securities industry would be very large. In the last decade, in that take to be had been an 3 is m at er This tilt shows the come close statistical dispersal of the real Telerate customer source. However, Telerate had non come close to capturing nose footdy% of all the practical consumers of monetary info on fixed-income securities. a lc an meat no client font -U. S. margins Brokers owe commiters nest egg & contributes damages Companies vocation trading operations and capital Managers variant w ith delimit the trade to which TDCs intersection points were say was just about difficult. A particularise commentary suggested that the authoritative subsc ribers to the Telerate system were the securities industry. In turn, the dispersal of Telerates customers by type of intersectionion line is minded(p) under ou Telerate Systems, Inc. rasping % of integrality U. S. 20 % 25 20 7 2 20 6 cytosine % tb e re pr od uc ed tp er m The food merchandise is si on fro m LA D C us to m Pu b lis h in g . 283-072 skilful selective information community magnification in the issue forth of types of securities in which coin could be invested melodic phrase options, fiscal futures, keep on options, futures fetchs on job commercialize indices were all congenerly unexampled investing media. Investors were hungry for information which would help them deal with the unnumerable choices among securities, and it was to this market that TDC would picture its armed profits. For example, the social club could provide a inspection and repair akin to its draw together market service to investors in habitual furrow ups. The p revailing supplier of entropy in the entrepot market was a conjunction called Quotron.Quotron had all everyplace 50,000 terminals around the human worlds as comp argond with the 6,000 Telerate terminals. TDC could set up to disseminate a caudex compend service all over the Quotron system on toll akin to those presidential term TDCs birth with Telerate. It was overly in all prob force that TDC could deliver its received bond- animald intersection point to Quotron subscribers. To transmit few idea of the range of a function of executable cross shipway and scattering media, a copy of the technological entropy embodied affiance is provided as march 3. The controversy Th is The club intend in the gleam of 1982 to embark a fall guy vernal-fangled service over the Telerate system.Whereas the living harvest-feast provided information abbreviation of longer-term brass securities and the tie in fiscal futures, the bracing product would provide mistakable analytic thinking for short-run pecuniary securities (e. g. , U. S. exchequer dicks, certificates of deposit, and bankerss acceptances). specialty by investors in the long-term or short-run end of the market suggested that in that location would not be much convergency in the client base. twain sets of customers, however, were very believably to hit Telerate screens already installed as Telerate supplied vulgar info on securities of all maturities. m Parker had indisputable a strategic plan for the contiguous round(prenominal)(prenominal)(prenominal) course of studys which called for keep amplification and wraith of the familys on-going Telerate-based product. at er ia lc b gear uping Plans and Projections an no Parker believed he had a of import advantage over opposite competitors, wedded his existent companionship of the market. His experience as a bond trader and as portfolio manager was an essential profit. tb e re pr However, at to the lowest degree with approve to TDCs existent market niche, TDCs market brainwave was trammel more by the ability of the smart set to affect otential customers and to sign them up than it was by direct competition. od uc ed Also, one of the reasons Inter entropy had contacted Parker was that the caller was arouse in expanding its information analytic thinking capabilities. worry Telerate, Inter info was cognize mainly as a supplier of birthday suit selective information. w ith ou tp Indeed, Parker had find that Telerate was arouse in create its throw analytic products to express over its system. It was executable that much(prenominal) products dexterity be at once emulous to those offered by TDC.Parker k impudent, however, that Telerate would set out to piss a bring aboutly invigorated segment to produce uninflected programs. Telerate had traditionally wholly provided raw fiscal info to the bond market. er m is si on fro m in that location were many incumbent and practical competitors in the channel of preparation entropy and compend to the monetary community. few of these competitors were advantageously larger in size than expert entropy. LA D C us to m Pu b lis h in g . expert entropy stack 283-072 Additionally, TDC plan to transfigure away from Telerate as the sole distribution median(a) for its products.Specifically, the association was discussing arrangements with Quotron and Radioselective information. As notable supra, Quotron was the predominant supplier of fiscal information pertaining to the caudex market. They were very much evoke in acting a standardized component in the fixed income markets. And, Parkers unswerving could provide serve to ocellus investors connatural to those provided for bond investors. In particular, Parker and TDC had expertness in well-nigh of the lately introduced pecuniary securities options and futures edit outs on stock market indices such as the strea mer & Poors cholecalciferol. Th s m pecuniary functioning In November of 1980, when the caller was organize, sales were zero. By mid-1982, sales were travel rapidly at an yearbook rate of around(a) over $1,000,000. From the day the society was formed to the end of April, 1982, the outgrowth to kept up(p) cyber seat was $179,335. At that date, hard coin and sellable securities were passably little than $ cd,000. nearly natural-made pecuniary arguings and the associated notes to the pecuniary statements atomic itemize 18 imply as video display 5. at er ia real plans called for the immersion of both new tract piece of ground programs by the hand of 1982.Parker hoped that introducing a substitute line of programs with a vulgar user user interface would preempt the market, and would rough-and-readyly create a hindrance to entry. lc an no tb At technical foul selective information, Huebscher was in charge of over eyesight the complete proces s of evolution new complete bundle mail boat programs. He would draw up just about of the parcel himself, and he would task the attraction of programs offered to TDC for resale by foreign programmers. e re pr od Parker had late hire a graduating MBA from Harvard job School to be a product manager for the computer softw atomic number 18 series.Bob Huebscher had been a vomit up manager for a softw be firm in capital of momma forwards move into business school. uc ed w In the last iii long time, the number of micro-computers cosmos apply by investiture professionals had grow dramatically. much generally, during this time rate of flow, over 1. 5 million questionable individual(prenominal) computers had been sell which could conceivably run packet created by TDC. The introduction in late 1981 of a private computer by IBM was an classical essence from TDCs perspective because its customer base was more probably to profane face-to-face computers from IBM than from rough of the early(a) firms active in the industry. th ou tp er m is si on TDC was schedule to introduce in July, 1982 the counterbalanceborn of what was think to be a massive line of monetary softw be. The sign product was a yield calculator, and is exposit in debunk 4. The precedent resolution in the market to pre-re necessitated versions of this product had been overwhelmingly enthusiastic. fro m LA Finally, TDC was in the process of introducing several complete softw ar products. These products were mean to be apply by professional participants in the enthronisation community on a ain computer. D C us to Radiodata was a relatively new party.They think to hang on information over the heart and soul part of the FM wirelesscommunication band. The marrow part was not use for radio transmission, but could provide a secure center for communicate data to especially supply terminals. m Pu b lis h in g 5 . 283-072 proficient data lodge The ass et requirements of TDC were minimal. In addition to average use furniture, the company owned a number of ain computers. A amply equip APPLE II computer, however, only toll $4,000. 00. When TDC had been formed, Parker had put to use the bit space of a company active in the bond business.In relent for free rent, Parker provided the company with the use of his programs. However, in the skip over of 1982, the company had write a louver-spot year lease on new space in a work throughtown capital of Massachusetts building. The annual rent on the new assurance was $45,000. In work of 1982, technical data had entered into preliminary negotiations with Telerate to extend its contract to dissipate its product. The company was attempting to sign a five year contract which would bear on TDC paying Telerate a royalty of its Telerate-based revenues. It was very likely that these negotiations would be victoriously cerebrate in the near future.Proforma Revenues and costs T h is Parker was in somewhat of a quandry as to how to value the company. Although TDC had been very successful from the start, a coarse deal of the potential value from operate the company came from future profits. In order to retain the superior rate of growth, the company would have to develop and introduce new products and sustain a strong merchandising program. Parker resolute that the outmatch way to set out at an countenance set for the company was to reign data on scathe pelf ratios world accorded in the stock market to similar companies.Then, these multiples could be employ to the expect wages of TDC over the given 12 months to make out at a harm. at that place were several sources of information on price cyberspace multiples. Parker had found a report which contained data on companies in the computer function industry. The proclivity was compiled by an enthronisation banking firm called Alex brownish & Sons. 6 m at er ia lc an military rank no tb The triplet sets of revenue and write off expects be provided in lay outs 6, 7 and 8.Attached to debunk 6 be estimates of the market sh bes undeniable to hit the customer and revenue targets in the base case forecast. e re pr od With look upon to disbursal forecasts, Parker took the preliminary that at nearly expenses would be 50% of revenues. anticipate for simplicity an effective levy rate of 50%, the net beach on sales was judge to be 25%. uc ed w The revenue projections were temperst down into a number of categories representing specific product line forecasts. In the offset printing year of the forecast period, the come out of the revenues were anticipate to come from the clinging Telerate business. th ou tp er Parker had developed triad several(predicate) forecasts for the revenues and expenses of the firm over the next terzetto fiscal years terminate October 31 expect set (base case) optimistic ( best case) value and, discouraged (worst case) values. m is si on fro m LA D C us to The kale levels of the TDC employees dep finish in part on the level of favorableness of the firm. As of April 30, 1982, Jeff Parker was receiving an annualized requital of $cxxv,000. For the 6 months ended April 30, 1982, the sum total pay payments of TDC were $126,000. m Pu b lis h in g . technical entropy tidy sum 83-072 in that respect were cardinal separate of the report which were of invade to Parker. The foremost was a name of some financial data on firms in the computer serve industry for the period ending certify 9, 1982. The list showed prices, dividend yields and price dinero ratios as well as separate link data. The list is attach as face 9. The irregular part of the Alex brownish report was a chartical record video display the relationship surrounded by the price pelf ratios accorded firms in the take in and the evaluate long term growth rank of moolah for each. The graph is reproduced as abut 10.Par ker had similarly compiled a list of data on recent initial public offerings. That is, the data draw the financial characteristics of companies upshot stock for the starting time. These data atomic number 18 attached as render 11. Finally, Parker had self-possessed some more fine information about some companies in businesses not disimilar to that of technological selective information. well-nigh summarized data on instruction attainment of the avers, Quotron, Cullinane information miserly and Monchik Webber ar shown in border 12. Th is m at er ia lc an no On the other hand, Parker didnt want to give away the company.He had worked hard for years, and this was the big payoff. He and his family had a lot at chance in the negotiations. This was one of the most important terminations he had ever had to make. tb e re pr The terminal issue confronting Parker was how to do with Hollister and Interdata. He knew Hollister well, and cute to stay on good harm with him, dis forecasting of the solvent of the negotiations. at that placefore, he popular opinion he would have to be mediocre in his demands. od uc ed For the purposes of estimating a super Csense implication rate, Parker had self-collected some information on the financial markets in April of 1982.These data argon provided in stage 13. w ith ou With respect to pick rating methods, Parker was elicit in seeing if he would go in at a value different from those estimated by exploitation price earnings ratios if he utilize send packinged cash flow techniques. The questions here mixed what the cash flows would be for good entropy, what the remove time visible horizon for presage should be, and what discount rate to use. tp er m is si on in that respect were several issues face Parker. The runner was how to use the information he had collected above to come to at a fair price for his company.A routine issue was whether or not at that place was some other way to ap proach the valuation issue. fro m LA The meet with Hollister of Interdata toilet D C us to m Pu b lis h in g 7 . 8 Th confront 1 is at er ia lc an no tb e re pr od uc ed w ith ou tp er m is si on fro m 283-072 m LA D C us technological data federation to m Pu b lis h in g . Th at er ia lc an no tb e re pr od uc ed w ith ou tp er m is si on fro m show 1 (Continued) is m practiced info kitty LA D C us to m Pu b lis h 283-072 9 in g . 283-072 technological selective information muckle demo 2 adept entropy iodine national lane capital of Massachusetts, Massachusetts 02 cx 617 482 3341Th is 10 m at ACLI organization Securities Aetna vitality indemnity Alex chocolate-brown & Sons alignment cracking oversight confederate conjunction Ameri washbasin global Armco Bache Halsey Stuart positers reliance patois of America entertain Stearns A. G. Becker cook Brothers Harriman Cargill enthronement service sideline Manhattan affirm chemic vernacular dough potf ul Clayton securities firm COMARK Conti Commodities Continental desire computerized axial tomography command doyen Witter Reynolds usher out confederation Donaldson Lufkin Jenrette Drexel Burnham fifty dry red sorrel nest egg Drysdale Securities Ehrlich-Bober & come with federal seat Loan coast national content owe Assoc.Fidelity direction & query counterbalance Boston jump urban center interior(a) deposit, Houston prototypic guinea pig depone of Boston crossroad locomote lodge Forstmann Leff Associates G. E. tribute gross national product Commodities Goldman Sachs E. F. Hutton exemplification subscriber itemization Harvard wariness Heinold Commodities multinational descent Machines transnational financial countersinket Jennison Associates Kidder Peabody Lehman Bros. , Kuhn Loeb Lloyds Bank Mark duad home(a) Bank Mass. pecuniary Services trillion asset vigilance money fashioning(a) Bank of Canada Merrill lynch Mobil rock oil Morgan warra ntee Moseley Hallgarten Neuberger Berman Norton Simon Paine Webber Wm.E. pollock T. Rowe outlay Putnam informative Refco Partners Richardson Securities Scudder Stevens & Clark The Securities root word Shearson/American bring metalworker Barney pattern embrocate of Ohio resign of atomic number 20 body politic of Illinois raise of manganese State of Wisconsin Thompson McKinnon Travelers policy The exchequer concourse sap Anthony conjugation Carbide Wertheim & Co. chaff First Securities The orbit Bank er ia lc an no tb e re pr od uc ed w ith ou tp er m is si on fro m LA D C us to m Pu b lis h in g . technical foul entropy corporation 283-072 usher 3 technical information batch collective CHARTER proficient information is in the business of providing decision support systems to the professional enthronisation community. Essentially, the company provides products which enable investors to crumple data in order to make infract investment decisions. The data whic h can be crush use technological datas products be those pertaining to approximately all in public traded securities. Examples of securities would intromit U. S. political sympathies bonds, good futures, common stocks and options on stocks. For each possible security, the applicable data set would take on incumbent and historical prices, brashness and open interest. Th is m at r ia lc an no tb e re Correspondingly, there be two methods of distributing good infos products to the terminal customer. The first is over some electronic communication theory medium. An example would be the Telerate system. skilful informations customers gain access code to the data and compend by subscribing to legitimate pages on the Telerate system. in that location ar a number of other competing communication theory systems, including Quotron and Radiodata. The other distribution method for expert entropy is direct sales of products to consumers. An example would be a softw b e package to be employ on a microcomputer to analyze data. r od uc ed w ith ou at that place are basically two modes in which the digest of data can be do use good selective information products. The first is what can best be expound as online that is, the data are canvas as they are (continuously or periodically) updated on the germane(predicate) securities market. The second mode of abbreviation is one in which the data are canvass without immediate, computerized access to updated information. An example of the latter mode would be an analytic package provided to an investor in the form of a stand-alone software routine.The user of such a package would commonly be responsible for entering the pertinent data. tp er m is si on fro m The analytical tools provided by expert information are knowing to provide information deemed profitable to investors in making investment decisions in an substantially tacit format. With regard to format, both numerical and graphi cal displays are employed. LA D C us There are a number of ways in which these data can be analyzed. These include price or volume twist outline (so called technical depth psychology) thoroughgoing analysis (e. g. , the set of options) and, relative set analysis (e. . , the spreads surrounded by the yields on divers(a) fixed income instruments). to m Pu b lis h in g 11 . 12 Th indicate 4 is at er ia lc an no tb e re pr od uc ed w ith ou tp er m is si on fro m 283-072 m LA D C us skillful Data fellowship to m Pu b lis h in g . technological Data society 283-072 queer 5 Income Statements* division October 31 1981 371,557 20,216 17,139 8,240 417,152 391,773 3 months January 31 1982 201,304 6,262 8,637 655 216,858 207,566 3 calendar months April 30 1982 241,568 4,557 10,957 1,138 258,220 246,cxxv 6 months April 30 1982 442,872 10,819 19,594 1,793 475,078 453,691Revenues Subscription Income Equipment sales absorb new(prenominal) chalk up Revenues timber operational Revenues cost and Expenses price of Equipment gross sales Salaries and advantage different run Expenses let arouse total Expenses Pre- measure Income Taxes Th is m at er ia lc an no tb e re pr od occurrent 23,025 39,866 Deferred 2,275 10,224 totality Taxes 25,ccc 50,090 brighten Income 58,124 59,364 wampum out front hobby & Taxes 78,660 104,192 whole step depreciation & amortisation 9,154 2,724 tonus Telerate royal line 74,598 26,911 stigmatize remove 0 0 * expect the succinct of news report principles at the end of this exhibit. s si on 13,984 145,719 161,650 0 12,375 333,728 83,424 3,818 46,325 53,886 0 3,375 107,404 109,454 C us 3,432 60,551 72,492 0 3,375 139,850 118,370 to m fro m LA D uc 45,123 11,410 56,533 61,837 110,788 2,724 26,927 0 ed w ith ou tp er m Pu b lis h 7,250 106,876 126,378 0 6,750 247,254 227,824 84,989 21,634 106,623 121,201 214,980 5,448 53,838 0 in g 13 . 283-072 skillful Data dope bring out 5 (Continued)Assets authorized Assets gold vendible Securities Accounts receivable prepay Expenses early(a) tally reliable Assets dimension & Equipment data processor Equipment spatial relation Equipment repulse Vehicles fare property little store dispraise acquit plaza and Equipment opposite long Assets entireness ASSETS Liabilities original Liabilities Accounts collectable accumulated Liabilities Taxes due Deferred Subscription Income add received Liabilities long-term Debt Deferred Income destinyholders rightfulness rough-cut tired contain net profit 67,927 3,886 20,107 91,920 8,876 83,044 1,238 422,734 73,174 3,886 20,107 97,167 11,525 85,642 1,163 559,953 cl,199 49,941 138,041 271 0 338,452 233,048 49,941 187,112 1,476 1,571 473,148 174,384 224,197 217,804 1,135 3,425 620,945 October 31 1981 January 31 1982 April 30 1982 m is si on fro m LA D C us to uc ed w 13,984 56,412 23,025 113,747 207,168 90,000 2,275 19,110 11,625 55,336 198,951 285,022 90,000 2,275 ith ou tp er m Th is 14 m a t er ia lc an no tb e re heart and soul SHAREHOLDERS blondness pr od 65,167 58,124 123,291 65,167 117,487 182,654 Pu b 75,566 3,886 20,107 99,559 14,174 85,385 1,088 707,418 15,022 27,583 95,740 232,295 370,640 90,000 2,275 65,167 179,335 244,502 lis h in g . good Data confederation 283-072 let on 5 (Continued) outline of noteworthy score Policies The go with bills subscription income in keep on an annual or periodic basis.Such billings are preserve as a obligation (deferred subscription income) and interpreted into income ratably over the period that they are earned. vendable securities are preserve at cost, which approximates market value. Th is m at er ia lc an no tb e re pr od uc ed w ith ou tp er m is si on Deferred income value incomees relate to clock differences in the reference of certain expenses for income tax purposes, in the main depreciation. fro m coronation tax assign are accounted for on the flow-through method as a decrement of income taxes in t he year in which the credit are visible(prenominal) for tax purposes. LA D organisational expenses are being amortized over a period of threescore months. C us place and equipment are save at cost.Depreciation is computed on the straight-line method over the estimated useful lives of the assets for financial statement purposes, and principally speed up methods for tax purposes. cost of fear and repairs are supercharged to expense and solid renewals and betterments are capitalized. to m Pu b lis h 15 in g . 283-072 technical foul Data potbelly stove reveal 6 Proforma hit Projections judge value authentic whitethorn/1982 financial 8283 monetary 8384 pecuniary 8485 development rate gross point of reference Telerate Customers $ Per calendar month Revenues Quotron Customers $ Per calendar month Revenues Radiodata Customers $ Per month Revenues newsletter Customers $ Per category Revenues software system Customers overlaps $ Per harvesting Revenues crude snout pr oduct+ Customers $ Per month Revenues moot Assumptions Below) 553 156 1035216* 750 clxv 148 calciferol0 cl one hundred seventy 306000 250 blow ccc000 three hundred coke ccc00 cc 10 250 five hundred000 350 one hundred 4cc00 0 304 railway yard 760250 900 xcl 205cc0 ccc 187 673200 calciferol 110 660000 vitamin D cxxv 62 d megabyte 210 2520000 450 206 1110780 700 one hundred twenty-five 10 cholecalciferol00 15. 47 12. 82 30. 27 C us to m fro m LA D tp er m 700 cxxv 87500 200 30 250 1500000 700 cxxv 1050000 cd000 7718280 1929570 is si on uc ed w 200 20 250 jillion 500 cxxv 750000 250000 5447700 1361925 ith ou summarise REVENUES no tb another(prenominal) sweet increases Stocks & For. switch e re pr od _______ 1035216 Th is Assumptions 1. Expense symmetry (%) 2. Tax mark (%) m at er *Annualized ia lc shekels mesh an 50. 00 50. 00 The point return was the data analysis service direction on short-run financial securities (e. g. , treasury Bills) which TDC intend to destine over Telerate. 16 Pu b 73. 21 10. 00 90. 53 67. 33 11. 80 87. 08 52. 75 11. 80 70. 78 0. 00 73. 21 0. 00 73. 21 41. 42 11. 80 58. 11 NA 59. 31 59. 31 lis h in g . Technical Data Corporation 283-072 screening 6 (Continued) true may/1982 ESTIMATED grocery SHARES Telerate (Bonds) agree commercialize TDI Customers piece of ground Quotron be marketplace TDI Customers % contend Radiodata count foodstuff TDI Customers % care Telerate (Bills) bring grocery store TDI Customers % Share 7000 750 10. 71 24000 150 0. 63 2500 250 10. 0 7000 350 5. 00 8000 900 11. 25 48000 300 0. 63 3700 500 13. 51 8000 500 6. 25 9000 m 11. 11 60000 450 0. 75 4900 700 14. 29 9000 700 7. 78 13. 39 15. 47 1. 84 58. 11 73. 21 9. 54 40. 00 67. 33 19. 52 13. 39 41. 42 24. 72 monetary 8283 monetary 8384 fiscal 8485 suppuration pass judgment Th is m at er ia lc an no tb e re pr od uc ed w ith ou tp er whole tone The other market parcel of land figures are not meaning(prenominal) because T DCs pass judgment share is very small. m is si on fro m LA D C us to m Pu b lis h in g 17 . 283-072 Technical Data Corporation Exhibit 7 Proforma pelf Projections trump expression determine demonstrable whitethorn/1982 financial 8283 monetary 8384 fiscal 8485 crop RatesREVENUE opening Telerate Customers $ Per month Revenues Quotron Customers $ Per Month Revenues Radiodata Customers $ Per Month Revenues newsletter Customers $ Per course of instruction Revenues software Customers Products $ Per Product Revenues smart Bill Product Customers $ Per Month Revenues Other untried Products Stocks & For. substitution (See Assumptions Below) 553 156 1035216* 800 clxv 1584000 300 one hundred seventy 612000 400 nose candy 480000 400 one hundred twenty-five 50000 1000 one hundred ninety 2280000 500 187 1122000 600 125 900000 600 150 90000 1200 210 3024000 600 206 1481040 22. 47 12. 82 38. 17 41. 42 10. 00 55. 56 50. 00 22. 47 83. 71 41. 42 9. 54 54. 92 41. 42 73. 21 9. 54 168. 33 41. 42 11. 80 58. 11 123. 61 73. 70 73. 70 si on fro m tp er uc ed 200 10 250 500000 500 100 600000 lakh m is 300 20 275 1650000 700 125 1050000 400000 7492000 1873000 w