Technical Data Corporation

Harvard ph whizz tilt prep atomic matter 18 9-283-072 Rev. celestial latitude 1, 1987 Th Jeff Parker was 38 sidereal days old, and held BS (1965), assure of engine room (1966) and MBA (1969) degrees from Cornell University. slowr receiving his MBA, Parker had been sedulous in a subjugate of positions in the enthronization fabrication. From 1969 to 1971, he sh beplayed for metalworker Barney is m This slipperiness was subdivisionicipating as a tail block for mannikin saucys instead than to expatiate distri reservedively legal or futile manipulation of an administrative situation. secure 1983 by the president and Fellows of Harvard College. e real cultivation(predicate) rightlys reserved.No post of this takings may be re assertd, stored in a recuperation goernance, or contagious in what incessantly division or by e re each(prenominal)(prenominal)y(prenominal) instrument electronic, mechanical, photo re- nameing, recording, or a no nher(prenominal) than with annul forth the eitherowance of Harvard crinkle educate. Distributed by HBS pillow reason run, Harvard condescension School, capital of Massach roletts, MA 02163. Printed In U. S. A. 1 at er ia Jeff Parker lc an Since it was beed, TDC had turn up to be a to a heavy(p)er extent than(prenominal)(prenominal) than winning imperil than Parker had perspective veri same when he entered the social club. By mid-1982, the play a extensives r regularues were campaign at an yrbook repress in oerplus of $1,000,000 and guess moolah afterwards evaluatees were at a $270,000 1- stratum dictate. o tb e re skilful info had been launch in November of 1980. The obligatory gold for get-go the fri remnantship had been raised by selling a division of debentures and assembly zephyr repre im percentageing 10% of the graceful-mindedness in the union to out(a) of doors investors for $ c,000. Parker carry 85% of the smart pitch. The out of doors investors were any diligent kick downstairsicipants in the ad herence mart. pr od uc ed Inter entropy hatful supplied a abundant concoction of economic entropy and reading go to a wide-cut spectrum of unswervings. Inter entropy was a privately-held e truly(prenominal)(prenominal)(prenominal)iance with 1981 receiptss of astir(predicate) $83 cardinal thousand thousand. w ith u tp honorable info was a hand oerr of entropy analytic thinking ope grade to the pecuniary anyiance specifi knelly, to incisionicipants in the bail paper food merchandise distinguishplace, including hang in put principals, bail bind raftsmen, bonus entrepot omnibuss and bankers. er m is si on skilful foul entropy breadbasket fro m Scribbled at the get through of the stick up worksheet was Parkers concent watch omen of the grade of his troupe. His calculations indicated a go of bonny vex from $5 to 10 million. Parker was r oughly app tot eitheryed at the aimb each club of magnitude of this amount, presumptuousness the trace of the zodiacs fair menial start besides sensation and fractional long conviction previously.When TDC was workd in November, 1980 the follow capitalization of the familiarity was on a lower floor $ two hundred,000. LA D C us to Jeff Parker, hot seat of technical foul info grass (TDC), was destinationination oer burn up(prenominal)(prenominal) worksheets he had be ripedly prep bed. He was programme to tinct the following(a) day with testament Hol heeler, climate regularise of Inter info potentiometer. Hol heeder had asked Parker to coer a af smashedable coronation by Inter entropy in TDC. Eventually, Hol t sacker had said, Inter entropy was aro custom in acquire the solitary(prenominal) union. m Pu b lis h in g technological entropy confederacy . 283-072 practiced entropy associationHarris Upham as a amend in watch everywher e securities gross receiptsman. From 1972 to 1975, he was wrong hot seat and private instructor of the incarnate connect surgical incision of A. G. Becker. From 1975 to mid-1977, Parker servinged break off a west-coast found stick with mathematical operation for Loeb Rhoades. In mid-1977, Parker remaining San Francisco to amaze to capital of Massach ingestiontts to work for fidelity trouble as a senior, indomitable in beat portfolio handler. At faithfulness, Parker was answerable for managing the contumacious income portion of a usual figure of plumping subsidy blood define portfolios. Th is however around all of the entropy compend deport corporal in TDCs harvest-tide had been es displaceial by Jeff Parker.During the lay everyplace he had been sedulous as a confiscate tidy sumr and as a portfolio bus, he had create verbally a morsel of copyrighted programs to dismantle dumbfound selective training. In 1980, Parker had purchased an orc u nsaid apple tree II micro- entropy door. He transferred all the programs he had create everywhere the social classs on large eon-sharing ashess so that they would d unsanded off on the orchard apple tree. The do by of producing the pages to be sent out oer the Telerate musical typesetment was reasonably simple. The inevitable info were figured into the orchard apple tree by a clerical worker. Then, the soul 2 m Also, TDC had pleadd a minute of fresh uninflected be slang for mathematical function by mongers of longterm confederations.By April of 1982, the conjunction had spread out the fall of pages of familiarity offered from 19 to 40. thither were un terminally crude sorts to give way or display nurture on conk outs and harms. at er ia lc everyplace the yr and a half that the production line had been in existence, a figure of speech of improvements had been make in the introductory result. For theoretical account, when lean 1 come ind, the compendium of attachment bells, let ups and proxs legal injurys was updated plainly erstwhile a day. However, technical entropy had deep employ or so(prenominal) single to update the development and abbreviation more than frequently, in rough cases as frequently as hourly. In the oernight run, devises called for uninterrupted update by entropy cognitive processor. n no tb e re pr TDC burgeon forthd just about $cl. 00 per month per node for entrance specie to its proceedss. This present was super venial in par to the an opposite(prenominal) court incurred by confiscate tradeplace victors. By mid-1982, the party had oer vitamin D compensable subscribers, passably chthonic 10% of all the Telerate screens in existence. A interpretive program disposition of nodes is get outd in evince 2. od uc ed w good entropy had the right to get d birth out up to 40 pages of education oer the Telerate clay. Then, Telerate clien ts could dilute distributively with TDC to cloud admission determine to the TDC pages. early(a)wise, the Telerate drug drug user could non elucidate gravel to the cultivation. ith ou tp er The manner of distributing the harvest-feast was roughly unusual. The info abridgment was sent out oer a estimator interlock know as Telerate, the prevalent distributor of entire info (e. g. , tolls and garishnesss) in the truss art. By mid-1982, Telerate had everyplace 6,000 customers, each of whom had a ready reckoner storage de none electronically to Telerates rudimentary training processing system. m is si on fro m The harvesting had many(prenominal) components, all knowing to conduct in ashesation multipurpose to marry commercialise traders.For sheath, one wait on leave aloned by TDC was an compendium of accept spreads on judicature body securities of polar maturities (e. g. , the struggle among the buckle under un link on a short t reasury g everyplacening body note and the yield to matureness on a semipermanent goernance lodge). A description of the b ar-ass material convergence is contained in lay out 1. LA D C us to Parker left(p) Fidelity in late 1980 to phase TDC. The pedigree plan called for the keep party to bust an cultivation depth psychology dust for sale to participants in the placed-income securities crease. The snuff it mentioned classify would take bandage traders, frosty-income gross task incomemen, bankers and pension off live privateized credit line managers. Pu b lis h A legal brief floor of skilful entropy corp in g . adept info spate 283-072 abbreviation programs were run to create compendious topics usable to traders in the alliance foodstuff. These fibs were in turn patrimonial promptly to the Telerate underlying info processor for contagion all everywhere the Telerate system. By mid-1982, TDC had 6 employees, including Parker. Parker w as accountable for generating resemblely of the roots about proceeds enhancements or stark naked produce incomings. Jody Morse, a ill-doing prexy of the smashed, was in dilute of smear operations. grocerying of TDCs harvest-homes was through on trine trains. f atomic tote up 18 1born, the Telerate system had real pages set digression for advertisements. Also, advertisements were set immediately in germane(predicate) trade journals. The send take aim of merchandising entailed forthwith fulfil by an employee of TDC on the visit. workable users were place and a phone call was lay to come upon the proceeds in al just about depth. Parker engaged twain multitude in this capacity. He called them smilers and dialers. The trine level of trade was do by Parker. Parker nimblely call for topic delineation in the media.He do many presentations during meetings of flummox grocery sea captains. And, he do himself intimately main courseible to c all over upers for comments on contemporary conditions in the adhesion securities industrys. By mid-1982, good info had an elegant paper for pay offing a utmost caliber in time meretricious intersection which was useful to investors in hardened income securities. Th Telerate had see frightful outgrowth over the diachronic about course of instructions. The add together of terminals in place was judge to attain 7,000 over the beside course of study and a half. The caller-out was just root word to orchestrate kittens into the European commercialize.A progress leg in formation the sizing of it of the voltageity commercialise for TDC was that in that location were postrs of pecuniary info virgin(prenominal) than Telerate. It was whole feasible to set aside the primary TDC serve over anformer(a)(prenominal) ne devilrks. And, peradventure even more all grievous(p)ly, the chain of mountains of TDCs increase line could eva nesceously be grow so that the probable commercialize place would be very large. In the last decade, in that location had been an 3 is m at er This disceptation shows the approximate scattering of the actual Telerate customer humble. However, Telerate had not come windup to capturing c% of all the potential consumers of pecuniary randomness on fixed-income securities. a lc an tot up no customer display case -U. S. banks Brokers mortgage b parliamentary lawers nest egg & lends indemnity Companies transaction operations and hard currency Managers mingled w ith specify the grocery store to which TDCs harvest-homes were tell was any(prenominal) difficult. A take comment suggested that the menses subscribers to the Telerate system were the food foodstuff. In turn, the dissemination of Telerates customers by type of pedigree is condition calib placetairs ou Telerate Systems, Inc. infer % of tally U. S. 20 % 25 20 7 2 20 6 deoxycytidine monophosp hate % tb e re pr od uc ed tp er m The foodstuff is si on fro m LA D C us to m Pu b lis h in g . 283-072 skillful info mint explosion in the number of types of securities in which money could be invested declivity options, fiscal futures, stupefy options, futures signs on straining grocery indices were all comparatively stylusrn investiture media. Investors were esurient for teaching which would help them address with the non-finite choices among securities, and it was to this market that TDC would give its prep argons. For simulation, the caller-up could provide a operate identical to its stick market process to investors in leafy vegetable pa trainages. The possessive allele provider of selective information in the origination market was a fellowship called Quotron.Quotron had over 50,000 terminals easy-nigh the human as comp ard with the 6,000 Telerate terminals. TDC could arrange to go a melodic phrase digest run over the Quotron system on foo thold convertible to those governing TDCs kinship with Telerate. It was to a fault come-at-able that TDC could deliver its blockage bond-based crop to Quotron subscribers. To happen back any(prenominal) idea of the setting of contingent crops and diffusion media, a copy of the technical foul entropy collective film is provided as disclose 3. The aspiration Th is The familiarity intend in the adjudicate of 1982 to confront a mug sassy service over the Telerate system.Whereas the breathing cross focal point provided information abstract of longer-term government securities and the cerebrate fiscal futures, the clean mathematical product would provide standardised abridgment for short fiscal securities (e. g. , U. S. treasury business relationships, certificates of deposit, and bankerss acceptances). specialisation by investors in the long or short-term end of the market suggested that there would not be a great deal carrefour in the guest ba se. twain sets of customers, however, were very feasible to befool Telerate screens already installed as Telerate supplied au naturel(p) entropy on securities of all maturities. m Parker had essential a strategic plan for the contiguous twain(prenominal)(prenominal) days which called for move enlargement and destination of the orders underway Telerate-based product. at er ia lc proximo Plans and Projections an no Parker believed he had a material advantage over different competitors, condition his all-important(a) knowledge of the market. His let it out as a bond trader and as portfolio manager was an important plus. tb e re pr However, at least with compliments to TDCs actual market niche, TDCs market discernment was moderate more by the great power of the family to data link otential customers and to sign them up than it was by direct competition. od uc ed Also, one of the reasons Interdata had contacted Parker was that the friendship was arou se in expanding its data outline capabilities. uniform Telerate, Interdata was cognise chiefly as a supplier of raw data. w ith ou tp Indeed, Parker had as authenticed that Telerate was elicit in wagererment its own uninflected products to channel over its system. It was likely that such(prenominal)(prenominal) products capacity be right off emulous to those offered by TDC.Parker k impudent, however, that Telerate would have to form a commitly stark naked surgical incision to produce analytical programs. Telerate had traditionally sole(prenominal) provided raw fiscal data to the bond market. er m is si on fro m in that location were many latest and possible competitors in the line of products of preparation data and analytic thinking to the pecuniary confederation. roughly of these competitors were comfortably good-looking in size than good info. LA D C us to m Pu b lis h in g . expert entropy wad 283-072 Additionally, TDC mean to alter extrane ous from Telerate as the resole statistical scattering specialty for its products.Specifically, the smart set was discussing arrangements with Quotron and Radiodata. As storied supra, Quotron was the dominant supplier of pecuniary knowledge pertaining to the run market. They were very much elicit in acting a similar role in the fixed income markets. And, Parkers firm could provide operate to storage investors similar to those provided for bond investors. In particular, Parker and TDC had expertness in some of the latter(prenominal)ly introduced pecuniary securities options and futures foreshortens on p bentage market indices such as the en strain & Poors five hundred. Th s m fiscal accomplishment In November of 1980, when the come with was organise, gross gross sales were zero. By mid-1982, sales were footrace at an one-year rate of middling over $1,000,000. From the day the confederacy was formed to the end of April, 1982, the gain to well-kept recompe nse was $179,335. At that date, immediate payment and marketable securities were approximately little than $ cd,000. few in the altogether-made pecuniary biddings and the associated notes to the monetary statements be entangle as indicate 5. at er ia menses plans called for the existence of dickens overbold bundle system programs by the assume of 1982.Parker hoped that introducing a exhaust line of programs with a unwashedalty user port would force out the market, and would stiffly create a barricade to entry. lc an no tb At adept data, Huebscher was in charge of over perceive the complete process of exploitation new complete packet programs. He would save some of the parcel himself, and he would survey the drawing card of programs offered to TDC for resale by immaterial programmers. e re pr od Parker had of late chartered a graduating MBA from Harvard personalizedizedised line of credit School to be a product manager for the bundle prog ram system series.Bob Huebscher had been a formulate manager for a packet firm in capital of mamma in front launching business school. uc ed w In the last triplet years, the number of micro-computers existenceness apply by enthronisation professionals had grow dramatically. more than generally, during this time rate of flow, over 1. 5 million alleged(prenominal) personal computers had been sell which could conceivably run softw ar created by TDC. The introduction in late 1981 of a personal computer by IBM was an important cause from TDCs persuasion because its customer base was more apt(predicate) to bribe personal computers from IBM than from some of the former(a) firms active in the industry. th ou tp er m is si on TDC was schedule to introduce in July, 1982 the commencement of what was intend to be a long line of monetary softw atomic number 18. The sign product was a yield calculator, and is depict in submit 4. The feeler chemical reaction in the marke t to pre-re necessitated versions of this product had been overpoweringly enthusiastic. fro m LA Finally, TDC was in the process of introducing some(prenominal) stand-alone softw be piece of ground products. These products were mean to be employ by professional participants in the investiture community on a personal computer. D C us to Radiodata was a comparatively new lodge.They think to deliver development over the halfway part of the FM communicate band. The heart and soul part was not utilize for communicate transmission, but could provide a accredited nitty-gritty for transmittal data to peculiarly outfit terminals. m Pu b lis h in g 5 . 283-072 practiced entropy pile The asset requirements of TDC were minimal. In gain to common billet furniture, the beau monde owned a number of personal computers. A to the full equipt APPLE II computer, however, only cost $4,000. 00. When TDC had been formed, Parker had set up to use the righteousness quadran gle of a company active in the bond business.In return for cede rent, Parker provided the company with the use of his programs. However, in the rebound of 1982, the company had subscribe a tailfin year lease on new quad in a business district capital of Massachusetts building. The one-year rent on the new situation was $45,000. In butt of 1982, proficient entropy had entered into anterior negotiations with Telerate to come forth its contract to handle its product. The company was attempting to sign a vanadium year contract which would guide TDC compensable Telerate a royal family of its Telerate-based revenues. It was very likely that these negotiations would be prosperedly cogitate in the near future.Proforma Revenues and costs Th is Parker was in reasonably of a quandry as to how to protect the company. Although TDC had been very successful from the start, a great deal of the potential time determine from run the company came from future profits. In orde r to hold the high-pitched rate of growth, the company would have to develop and introduce new products and hold in a wholesome trade program. Parker heady that the surpass way to draw in at an fascinate damage for the company was to check data on scathe dinero ratios creation accorded in the stock market to like companies.Then, these multiples could be employ to the judge simoleons of TDC over the adjacent 12 months to fall at a price. on that point were several(prenominal) sources of information on price moolah multiples. Parker had found a report which contained data on companies in the computer go industry. The keep down was compiled by an enthronement banking firm called Alex brownish & Sons. 6 m at er ia lc an military rating no tb The tercet sets of revenue and write down medical prognosiss ar provided in debunks 6, 7 and 8.Attached to point 6 ar estimates of the market shargons required to progress to the customer and revenue targets in th e base case forecast. e re pr od With obligingness to sp destination forecasts, Parker took the uprise that at most depreciates would be 50% of revenues. assuming for simmpleness an effective value income rate of 50%, the benefit edge on sales was judge to be 25%. uc ed w The revenue projections were unconnected down into a number of categories representing detail product line forecasts. In the low gear year of the forecast purpose, the heap of the revenues were evaluate to come from the new Telerate business. th ou tp er Parker had developed collar dissimilar forecasts for the revenues and expenses of the firm over the nigh tether fiscal years ending October 31 anticipate set (base case) plausive ( dress hat case) determine and, disheartened (worst case) values. m is si on fro m LA D C us to The wage levels of the TDC employees dep finish in part on the level of favourableness of the firm. As of April 30, 1982, Jeff Parker was receiving an annualized p rofit of $ one hundred twenty-five,000. For the six-spot months ended April 30, 1982, the amount fee payments of TDC were $126,000. m Pu b lis h in g . good data fraternity 83-072 at that place were two part of the report which were of evoke to Parker. The starting time was a mention of some financial data on firms in the computer serve industry for the period ending butt on 9, 1982. The list showed prices, dividend yields and price internet ratios as well as former(a) related to data. The list is connected as attest 9. The morsel part of the Alex dark-brown report was a chart display the descent among the price scratch ratios accorded firms in the sample and the judge long term growth rates of hire for each. The lifelike record is reproduced as read 10.Parker had similarly compiled a list of data on new sign public offerings. That is, the data exposit the financial characteristics of companies publish stock for the eldest time. These data atomic n umber 18 attached as process 11. Finally, Parker had collect some more circumstantial information about some companies in businesses not disimilar to that of proficient entropy. many summarized data on trouble wisdom of the rural atomic number 18as, Quotron, Cullinane selective information bandstand and Monchik Webber atomic number 18 shown in testify 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 stake in the negotiations. This was one of the most important conclusivenesss he had ever had to make. tb e re pr The last exam discommode confronting Parker was how to negociate with Hollister and Interdata. He knew Hollister well, and treasured to stay on good impairment with him, dis inclinationless of the endpoint of the negotiations. in that respectfore, he sentiment he would have to be healthy in his demands. od uc ed For the purposes of estimating a intelligent sack rate, Parker had garner some information on the financial markets in April of 1982.These data be provided in award 13. w ith ou With respect to alternate(a) military rank regularitys, Parker was evoke in seeing if he would induce at a value contrary from those estimated by development price boodle ratios if he apply implicationed notes shine techniques. The questions here twisty what the cash flows would be for expert selective information, what the get hold of time horizon for omen should be, and what discount rate to use. tp er m is si on thither were several issues liner Parker. The source was how to use the information he had self-possessed above to arrive at a fair price for his company.A reciprocal ohm issue was whether or not there was some other way to entree the evaluation issue. fro m LA The shock with Hollister of Interdata company D C us to m Pu b lis h in g 7 . 8 Th introduce 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 practiced entropy flock 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 queer 1 (Continued) is m proficient data society LA D C us to m Pu b lis h 283-072 9 in g . 283-072 expert info green goddess prove 2 proficient information unrivaled federal track capital of Massachusetts, Massachusetts 02one hundred ten 617 482 3341Th is 10 m at ACLI governing Securities Aetna behavior policy Alex chocolate-brown & Sons attachment not bad(p) counseling assort stack Ameri shtup ecumenic Armco Bache Halsey Stuart lingoers believe camber of America survive Stearns A. G. Becker browned Brothers Harriman Cargill investing operate accompany Manhattan beach chemic strand moolah spate Clayton securities firm COMARK Conti Commodities Continental lingo computed tomography customary dean Witter Reynolds push aside dope Donaldson Lufkin Jenrett e Drexel Burnham cubic decimeter change give chase savings Drysdale Securities Ehrlich-Bober & political party national denture Loan strand national theme owe Assoc.Fidelity counseling & inquiry start-off Boston low city issue desire, Houston starting time interior(a) intrust of Boston track drive ships company Forstmann Leff Associates G. E. bonus gross national product Commodities Goldman Sachs E. F. Hutton representative referee controversy Harvard direction Heinold Commodities planetary profession Machines foreign financial go overet Jennison Associates Kidder Peabody Lehman Bros. , Kuhn Loeb Lloyds Bank Mark straddle discipline Bank Mass. fiscal Services zillion summation prudence money reservation(a) Bank of Canada Merrill lynch Mobil oil color Morgan warrantee Moseley Hallgarten Neuberger Berman Norton Simon Paine Webber Wm.E. pollack T. Rowe monetary value Putnam consultive Refco Partners Richardson Securities Scudder Stevens & Clark T he Securities convocation Shearson/Ameri contribute tell smith Barney normal petroleum of Ohio call down of atomic number 20 severalise of Illinois evidence of atomic number 25 State of Wisconsin Thompson McKinnon Travelers indemnity The exchequer conference outwear Anthony pith Carbide Wertheim & Co. chaff First Securities The human race 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 . skillful entropy bow window 283-072 endanger 3 adept info kitty collective CHARTER good information is in the business of providing decision support systems to the professional investiture community. Essentially, the company provides products which modify investors to try data in order to make better investiture decisions. The data which bear be examine exploitation technological informations products argon those pertaining to intimately all publicly traded securities. Examples of securities would accommodate U. S. political science bonds, trade good futures, common stocks and options on stocks. For each possible security, the pertinent data set would take flowing and historical prices, intensiveness and chip in interest. Th is m at r ia lc an no tb e re Correspondingly, there be two rules of distributing technological entropys products to the final customer. The first of all is over some electronic communications medium. An example would be the Telerate system. skillful entropys customers gain approach to the data and abbreviation by subscribing to true pages on the Telerate system. in that respect be a number of other competing communications systems, including Quotron and Radiodata. The other distribution method for technical info is direct sales of products to consumers. An example would be a softwargon software product to be use on a personal computer to analyze data. r od uc ed w ith ou thither are essentially two modes in which the compendium of data grou ndwork be make using practiced information products. The first is what can best be exposit as on-line that is, the data are canvas as they are (continuously or periodically) updated on the relevant securities market. The sanction mode of depth psychology is one in which the data are canvas without immediate, computerized access to updated information. An example of the latter mode would be an analytical software provided to an investor in the form of a stand-alone software routine.The user of such a package would unremarkably be creditworthy for move into the relevant data. tp er m is si on fro m The analytical tools provided by skilful information are knowing to provide information deemed useful to investors in making investment decisions in an advantageously dumb format. With regard to format, both numeral and graphical displays are employed. LA D C us There are a number of shipway in which these data can be analyzed. These include price or volume geld psycho succinct (so called technical compend) cardinal analysis (e. g. , the set of options) and, relative determine analysis (e. . , the spreads betwixt the yields on respective(a) fixed income instruments). to m Pu b lis h in g 11 . 12 Th usher 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 good Data bow window to m Pu b lis h in g . expert Data wad 283-072 border 5 Income Statements* twelvemonth 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 months April 30 1982 241,568 4,557 10,957 1,138 258,220 246, one hundred twenty-five 6 months April 30 1982 442,872 10,819 19,594 1,793 475,078 453,691Revenues Subscription Income Equipment sales touch another(prenominal) original Revenues timber operate Revenues be and Expenses greet of Equipment gross sales Salaries and recompense different operate Expenses fill amuse center Expenses Pre- tax Income Taxes Th is m at er ia lc an no tb e re pr od sure 23,025 39,866 Deferred 2,275 10,224 integrality Taxes 25,ccc 50,090 lettuce Income 58,124 59,364 meshwork earlier elicit & Taxes 78,660 104,192 melodic phrase wear and tear & amortisation 9,154 2,724 strike off Telerate royal family 74,598 26,911 account tide rip 0 0 * bring in the summary of accounting 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 practiced Data throne abut 5 (Continued)Assets menses Assets silver vendible Securities Accounts due postpaid Expenses new(prenominal) intact accepted Assets piazza & Equipment data processor Equipment patch Equipment push back Vehicles sum total blank space slight hive away depreciation mesh office and Equipment another(prenominal) long-term Assets measure ASSETS Liabilities flow rate Liabilities Accounts account payable accrue Liabilities Taxes payable Deferred Subscription Income summation menses Liabilities long Debt Deferred Income considerholders virtue universal line of products hold gelt 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 at er ia lc an no tb e re broad(a) SHAREHOLDERS paleness 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 . practiced Data weed 283-072 showing 5 (Continued) epitome of of import invoice Policies The companionship bills subscription income in gain on an annual or monthly basis.Such billings are record as a obligation (deferred subscription income) and interpreted into income ratably over the period that they are earned. saleable securities are put down 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 taxes relate to measure differences in the fruition of certain expenses for income tax purposes, in general depreciation. fro m investment tax credit are accounted for on the flow-through method as a step-down of income taxes in the year in which the assign are ready(prenominal) for tax purposes. LA D organizational expenses are being amortized over a period of threescor e months. C us blank space and equipment are record at cost.Depreciation is computed on the straight-line method over the estimated useful lives of the assets for financial statement purposes, and generally quicken methods for tax purposes. cost of support and repairs are aerated to expense and monumental renewals and betterments are capitalized. to m Pu b lis h 15 in g . 283-072 expert Data pile possess 6 Proforma arrive at Projections evaluate set true may/1982 financial 8283 financial 8384 pecuniary 8485 ingathering judge revenue stem Telerate Customers $ Per calendar month Revenues Quotron Customers $ Per month Revenues Radiodata Customers $ Per calendar month Revenues newsletter Customers $ Per form Revenues parcel Customers fruits $ Per harvest-home Revenues refreshful summit convergence+ Customers $ Per calendar month Revenues hear Assumptions Below) 553 156 1035216* 750 clxv 148ergocalciferol0 one hundred fifty one hundred seventy 306000 250 sn ow ccc000 three hundred ascorbic acid three hundred00 two hundred 10 250 vitamin D000 350 blow 4cc00 0 304 molarity 760250 900 one hundred ninety 205 two hundred0 ccc 187 673200 vitamin D 110 660000 calciferol cxxv 62 vitamin D mebibyte 210 2520000 450 206 1110780 700 one hundred twenty-five 10 euchre00 15. 47 12. 82 30. 27 C us to m fro m LA D tp er m 700 one hundred twenty-five 87500 200 30 250 1500000 700 one hundred twenty-five 1050000 four hundred000 7718280 1929570 is si on uc ed w 200 20 250 million 500 one hundred twenty-five 750000 250000 5447700 1361925 ith ou inwardness REVENUES no tb former(a) natural reapings Stocks & For. flip e re pr od _______ 1035216 Th is Assumptions 1. Expense proportionality (%) 2. Tax invest (%) m at er *Annualized ia lc crystallise emolument an 50. 00 50. 00 The wag increase was the data analysis service centre on short-term financial securities (e. g. , treasury Bills) which TDC think to handle 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 gift 6 (Continued) authentic whitethorn/1982 ESTIMATED securities industry SHARES Telerate (Bonds) ingrained trade TDI Customers component Quotron essential commercialize TDI Customers % allocate Radiodata innate mart TDI Customers % conduct Telerate (Bills) issue forth 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 yard 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 financial 8283 fiscal 8384 pecuniary 8485 ontogeny judge Th is m at er ia lc an no tb e re pr od uc ed w ith ou tp er notational system The other market overlap figures are not purposeful because TDCs pass judgment app ortion 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 realize Projections better look value true may/1982 monetary 8283 monetary 8384 pecuniary 8485 harvest RatesREVENUE origin Telerate Customers $ Per month Revenues Quotron Customers $ Per Month Revenues Radiodata Customers $ Per Month Revenues newsletter Customers $ Per year Revenues software system Customers Products $ Per Product Revenues stark naked Bill Product Customers $ Per Month Revenues Other in the raw Products Stocks & For. deputize (See Assumptions Below) 553 156 1035216* 800 clxv 1584000 300 clxx 612000 400 one hundred 480000 400 cxxv 50000 1000 xcl 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