FINANCIAL STATEMENT ANALYSIS

Financial Analysis Types of Financial Analysis According to Purpose According to Scope According to People Component of Financial Analysis Technical Analysis Fundamental Analysis Economy Analysis Industry Analysis Accounting Analysis (Financial Statement Analysis ) Techniques of Financial Analysis Comparative Financial Statements Analysis Ratio Analysis

The tools of financial statement analysis are financial statements: Balance Sheet Income Statement Cash Flow Statement

Techniques Of Financial Statement Analysis FINANCIAL STATEMENTS Techniques Of Financial Statement Analysis Comparative financial statements analysis Vertical analysis (Common size analysis) (Dikey-Yüzde Yöntemi) Horizontal analysis (Comparative financial statement analysis) (Yatay-Karşılaştırmalı Tablo Yöntemi) Trend analysis (Trend Analizi Yöntemi) Ratio Analysis (Rasyo Analizi)

Ratio Analysis FINANCIAL STATEMENTS RATIO ANALYSIS In ratio analysis, a simple arithmetical relationship of one number to another is calculated. Ratio categories which are produced for financial analysis purpose are as follows: Liquidity, Activity, Solvency and Financial Structure, Profitability .

Activity Ratios (Turnover Ratios) Ratio Groups Ratio Liquidity Ratios (Indicates ability of a firm to meet short-term obligations) Activity Ratios (Turnover Ratios) (Indicates efficiency and effectiveness of operations and asset management) Current Ratio (CR)= Current Assets Current Liabilities Quick Ratio (Acid-Test or Liquidity Ratio)= Current Assets−Inventory Current Liabilities Dependence of Inventory= Current Liabilities− (Current Assets −Inventory) Current Liabilities Cash Ratio= Cash and Cash Equivalents Current Liabilities Accounts Receivable (A/R) Turnover= Annual Credit Sales or Net Sales Avarage of A/R Days To Collect A/R= 360 A/R Turnover Inventory Turnover= Cost of Goods Sold Avarage of Finished Goods Days To Sell Inventory= 360 Invetory Turnover Accounts Payable (A/P) Turnover= Net Sales Avarage of A/P Days To Pay A/P= 360 A/P Turnover Current Assets Turnover= Net Sales Avarage of Current Assets Non-Current Assets Turnover= Net Sales Avarage of Non−Current Assets Working Capital Turnover= Net Sales Avarage of Working Capital

(Indicates ability to retain earnings (growth) after covering costs) Ratio Groups Ratio Financial Structure Analysis (Solvency Ratios) (Indicates the ability of a firm to meet long-term obligations and capital structure decisions) Profitability Ratios (Indicates ability to retain earnings (growth) after covering costs) Financial Leverage Ratio= Total Liabilities Total Assets (Total Liabilities and Equity) Debt to Equity Ratio= Total Liabilities (Current and Non−Current Liabilities) Total Equity Non−Current Assets Total Assets Current Assets Total Assets Current Liabilities Total Assets/Liabilities Equity Total Assets/Liabilities Non−Current Liabilities Total Assets/Liabilities Non−Current Assets Permanent Capital (Capital Employed) Return on Assets (ROA)= Net Profit (Earnings After Interest and Tax) Total Assets ROA= Net Profit Margin x Assets Turnover ROA= Net Profit Net Sales x Net Sales Total Assets Return on Equity (ROE)= Net Profit (Earnings After Interest and Tax) Total Equity ROE= Net Profit Margin x Equity Turnover ROE= Net Profit Net Sales x Net Sales Total Equity Return on Total Capital (ROC)= Earnings Before Interest and Tax (Net Profit+Interest Expense) Total Liabilities and Equity

(Indicates ability to retain earnings (growth) after covering costs) Ratio Groups Ratio Profitability Ratios (Indicates ability to retain earnings (growth) after covering costs) Return on Assets (ROA)= Net Profit (Earnings After Interest and Tax) Total Assets ROA= Net Profit Margin x Assets Turnover ROA= Net Profit Net Sales x Net Sales Total Assets Return on Equity (ROE)= Net Profit (Earnings After Interest and Tax) Total Equity ROE= Net Profit Margin x Equity Turnover ROE= Net Profit Net Sales x Net Sales Total Equity Return on Total Capital (ROC)= Earnings Before Interest and Tax (Net Profit+Interest Expense) Total Equity ROA provides a measure of return generated by the entity on the investment in total assets. ROA is a function of a firm’s profitability (net profit margin) and efficiency (turnover). ROE measures return of capital provided from owners. ROC (ROCE) ratio measures the overall performance of the business. To mention about the profitability of equity, the ROE ratio must be higher than ROCE ratio. Otherwise, the interest costs are high and firm can not take advantage of financial leverage. Therefore the financial leverage effects the return on equity.

(Common-size Profitability Ratios) FINANCIAL STATEMENTS RATIO ANALYSIS Ratio Groups Ratio Profitability Ratios (Common-size Profitability Ratios) Gross Profit Margin= Gross Profit Net Sales Operating Profit Margin= Operating Profit Net Sales Pretax Margin= Earnings Before Tax (Profit of Current Period) Net Sale𝑠 Net Profit Margin= Net Profit Net Sales

FINANCIAL STATEMENT ANALYSIS THE ANALYSIS OF ARCELIK CO.

THE ANALYSIS OF ARCELIK CO For example; the percentage of current assets will be calculated as follows: BALANCE SHEET OF ARÇELİK CO.   2010 % 2011 ASSETS CURRENT ASSETS 4.748.439 0,65 6.033.849 0,66 Cash and Cash Equivalents 1.317.166 0,18 1.173.889 0,13 Financial Assets 1.185 0,00 2.932 Trade Receivables 2.324.578 0,32 3.180.870 0,35 Inventories 987.526 1.530.141 0,17 Other Current Assets 117.984 0,02 146.017 NON-CURRENT ASSETS 2.573.320 3.163.904 0,34 671.140 0,09 507.394 0,06 Investments Accounted for Using the Equity Method 136.604 160.580 Non-current Assets Held for Sale 5.480 6.441 Tangible Assets 1.252.245 1.446.841 0,16 Intangible Assets 461.417 783.094 Goodwill 7.190 196.167 Deferred Tax Assets 39.244 0,01 63.387 TOTAL ASSETS 7.321.759 1,00 9.197.753

For 2011 the assets structure of the Arçelik is as follows: BALANCE SHEET OF ARÇELİK CO.   2010 % 2011 ASSETS CURRENT ASSETS 4.748.439 0,65 6.033.849 0,66 Cash and Cash Equivalents 1.317.166 0,18 1.173.889 0,13 Financial Assets 1.185 0,00 2.932 Trade Receivables 2.324.578 0,32 3.180.870 0,35 Inventories 987.526 1.530.141 0,17 Other Current Assets 117.984 0,02 146.017 NON-CURRENT ASSETS 2.573.320 3.163.904 0,34 671.140 0,09 507.394 0,06 Investments Accounted for Using the Equity Method 136.604 160.580 Non-current Assets Held for Sale 5.480 6.441 Tangible Assets 1.252.245 1.446.841 0,16 Intangible Assets 461.417 783.094 Goodwill 7.190 196.167 Deferred Tax Assets 39.244 0,01 63.387 TOTAL ASSETS 7.321.759 1,00 9.197.753 Interpretation: Considering 2010, current assets are 65% , non-current assets are %35 of Total Assets. Trade Receivables are 32%, inventories are %13 of total assets. Tangible assets accounts 17% of total assets. For 2011 the assets structure of the Arçelik is as follows: The current assets 66% non-current assets are %34 of Total Assets. Trade Receivables are 35%, inventories are %17 of total assets. Tangible assets accounts 16% of total assets.

THE ANALYSIS OF ARCELIK CO BALANCE SHEET OF ARÇELİK CO.   2010 % 2011 LIABILITIES Current Liabilities 2.341.989 0,32 3.530.620 0,38 Financial Liabilities 839.220 0,11 1.628.943 0,18 Other Financial Liabilities 129.769 0,02 183.886 Trade Payables 968.962 0,13 1.249.531 0,14 Provisions for Tax 18.970 0,00 23.250 Provisions 205.160 0,03 232.390 Other Liabilities 179.908 212.620 Non-Current Liabilities 1.572.036 0,21 1.944.953 Equity 3.407.734 0,47 3.722.180 0,40 TOTAL LIABILITIES AND EQUITY 7.321.759 1,00 9.197.753 Interpretation: Considering 2010, current Liabilities are 32% of Total Liabilities and Equity. Total Liabilities are % 53 of Total Assets. Capital employed accounts 68% of total liabilities and equity. Equity accounts 47% of Total Liabilities and Equity. It can be said that Arçelik is traditionally funded. For 2011, current Liabilities are 38% of Total Liabilities and Equity. Total Liabilities are % 59 of Total Assets. Capital employed accounts 61% of total liabilities and equity. Equity accounts 40% of Total Liabilities and Equity.

CE= Non-Current Liabilities + Equity. THE ANALYSIS OF ARCELIK CO In order to analysis the financial position of the company, the assets and liabilities must be analyzed together. Working Capital = Current assets - Current Liabilities. Capital employed (permanent capital) is presented non- current liabilities and equity. Alternatively, capital employed can be calculated as the difference between total assets and current liabilities. CE= Non-Current Liabilities + Equity. CE= Total Assets- Current Liabilities

BALANCE SHEET OF ARÇELİK CO.   2010 % 2011 ASSETS Current Assets 4.748.439 65 6.033.849 66 Non-current Assets 2.573.320 35 3.163.904 34 TOTAL ASSETS 7.321.759 100 9.197.753 BALANCE SHEET OF ARÇELİK CO.   2010 % 2011 LIABILITIES Current Liabilities 2.341.989 32 3.530.620 38 Non-current Liabilities 1.572.036 21 1.944.953 EQUITY 3.407.734 47 3.722.180 40 TOTAL LIABILITIES AND EQUITY 7.321.759 100 9.197.753 Interpretation: Considering 2010, 32% of total assets is funded by current liabilities. Working Capital of Arçelik Co. accounts 33% of total assets. Non-current assets is funded by capital employed (permanent capital). In other words, working capital is funded by capital employed. For 2011, 38% of total assets is funded by current liabilities. Working Capital of Arçelik Co. accounts 28% of total assets. Non-current assets is funded by capital employed (permanent capital). %28 of current assets is funded by capital employed. In other words, working capital is funded by capital employed.

INCOME STATEMENT OF ARCELİK CO. 2010 % 2011 Sales 6.936.420 100 8.437.239 Cost of Goods Sold (4.868.473) (70) (5.897.009) Gross Profit 2.067.947 30 2.540.230 Operating Expenses Other Operating Income 130.416 2 60.194 1 Other Operating Expense (58.341) (1) (72.857) Operating Profit 637.650 9 645.894 8 Share of the Profit/Loss of Associates Accounted for Using the Equity Method 11.907 28.378 Financial Income 287.046 4 415.558 5 Financial Expense (279.965) (4) (474.421) (6) Profit Before Tax 656.638 615.409 7 Tax Expense of Current Period (83.492) (71.996) Deferred Tax Expense (23.899) (0) (2.326) Net Profit 549.247 541.087 6 Other Comprehensive Income   Profit /Loss of The Period Revaluation Funds of Financial Assets 240.616 3 (206.280) (2) Revaluation Funds of Tangible Assets 363 423 Effects of Changes in Foreign Exchange Rates (16.611) 170.231 Comprehensive Income After Tax 224.368 (35.626) Total Comprehensive Income 773.615 11 505.461 Interpretation: It demonstrates that in 2010, Cost of Goods Sold is 70% of Sales. Gross profit is 30% of Sales. The operating profit margin is 9%. Considering 2011, the cost of goods sold accounts 70% of sales. Cost of goods sold and operating expenses accounts 78% of sales.

THE ANALYSIS OF ARCELIK CO Horizontal Analysis (Comparative Statement) : It refers to comparison of financial data of a company horizontally over a number of columns for several years. Horizontal analysis to compare financial statements from different periods.

THE ANALYSIS OF ARCELIK CO Horizontal Analysis For example; the percentage of current assets will be calculated as follows: BALANCE SHEET OF ARCELIK CO. 31.12.2010 31.12.2011 Increase/ Decrease % ASSETS Current Assets 4.748.439 6.033.849 1.285.410 27 Cash and Cash Equivalents 1.317.166 1.173.889 -143.277 -11 Financial Assets 1.185 2.932 1.747 14,7 Trade Receivables 2.324.578 3.180.870 856.292 37 Inventories 987.526 1.530.141 542.615 55 Other Current Assets 117.984 146.017 28.033 24 Non-Current Assets 2.573.320 3.163.904 590.584 23 TOTAL ASSETS 7.321.759 9.197.753 1.875.994 26

BALANCE SHEET OF ARCELIK CO. 2010 2011 Increase/ Decrease % ASSETS Current Assets 4.748.439 6.033.849 1.285.410 27 Cash and Cash Equivalents 1.317.166 1.173.889 -143.277 -11 Financial Assets 1.185 2.932 1.747 14,7 Trade Receivables 2.324.578 3.180.870 856.292 37 Inventories 987.526 1.530.141 542.615 55 Other Current Assets 117.984 146.017 28.033 24 Non-Current Assets 2.573.320 3.163.904 590.584 23 671.140 507.394 -163.746 -24 Investments Accounted for Using the Equity Method 136.604 160.580 23.976 18 Non-current Assets Held for Sale 5.480 6.441 961 Tangible Assets 1.252.245 1.446.841 194.596 16 Intangible Assets 461.417 783.094 321.677 70 Goodwill 7.190 196.167 188.977 2628 Deferred Tax Assets 39.244 63.387 24.143 62 TOTAL ASSETS 7.321.759 9.197.753 1.875.994 26 Interpretation: Current assets demonstrate a %27 increase and the increase in trade receivables accounts 37% increase. Comparing with previous period (2010), the increase in inventories accounts 55%. Non-current assets demonstrate a %23 increase and tangible assets demonstrate a %18 increase, comparing with previous period.

Horizontal Analysis of Balance Sheet Interpretation: BALANCE SHEET OF ARCELIK CO. 2010 2011 Increase/ Decrease % LIABILITIES Current Liabilities 2.341.989 3.530.620 1.188.631 51 Financial Liabilities 839.220 1.628.943 789.723 94 Other Financial Liabilities 129.769 183.886 54.117 42 Trade Payables 968.962 1.249.531 280.569 29 Provisions for Tax 18.970 23.250 4.280 23 Provisions 205.160 232.390 27.230 13 Other Liabilities 179.908 212.620 32.712 18 Non-Current Liabilities 1.572.036 1.944.953 372.917 24 1.218.072 1.528.237 310.165 25 63.681 -63.681 -100 58.136 81.519 23.383 40 Provisions for Employee Benefits 99.700 106.782 7.082 07 Deferred Tax Liabilities 128.549 226.142 97.593 76 Other Non-Current Liabilities 3.898 2.273 -1.625 -42 EQUITY 3.407.734 3.722.180 314.446 9 TOTAL LIABILITIES AND EQUITY 7.321.759 9.197.753 1.875.994 26 Horizontal Analysis of Balance Sheet Interpretation: Current liabilities demonstrate a %51 increase, comparing with previous period. The increase in current financial liabilities accounts 94%, the increase in trade payables accounts 29% comparing with previous period (2010). Non-current liabilities demonstrates a 24% increase comparing with previous period. Equity demonstrates a %9 increase and the increase in retained earnings (accounts 26%) causes 9% increase of equity.

THE ANALYSIS OF ARCELIK CO BALANCE SHEET OF ARCELIK CO. 2010 2011 Increase/ Decrease % Current Assets 4.748.439 6.033.849 1.285.410 27 Current Liabilities 2.341.989 3.530.620 1.188.631 51 TOTAL ASSETS 7.321.759 9.197.753 1.875.994 26 Working Capital 1.756.811 2.854.186 0,62 Horizontal Analysis of Balance Sheet It demonstrates 62% increase in working capital.

INCOME STATEMENT OF ARCELİK CO. 2010 2011 Increase/ Decrease % Sales 6.936.420 8.437.239 1.500.819 0,22 Cost of Goods Sold (4.868.473) (5.897.009) -1.028.536 0,21 Gross Profit 2.067.947 2.540.230 472.283 0,23 Operating Expenses (1.502.372) (1.881.673) -379.301 0,25 Other Operating Income 130.416 60.194 -70.222 -0,54 Other Operating Expense (58.341) (72.857) -14.516 Operating Profit 637.650 645.894 8.244 0,01 Share of the Profit/Loss of Associates Accounted for Using the Equity Method 11.907 28.378 16.471 1,38 Financial Income 287.046 415.558 128.512 0,45 Financial Expense (279.965) (474.421) -194.456 0,69 Profit Before Tax 656.638 615.409 -41.229 -0,06 Tax Expense of Current Period (83.492) (71.996) 11.496 -0,14 Deferred Tax Expense (23.899) (2.326) 21.573 -0,90 Net Profit 549.247 541.087 -8.160 -0,01 Horizontal Analysis of Income Statement It demonstrates 23% increase in gross profit. The increase in sales accounts 22% and the increase in cost of goods sold accounts 21%. The increase in financial costs accounts 69% comparing with previous period. The increase in liabilities is the reason of increase in financial expenses.

THE ANALYSIS OF ARCELIK CO Trend Percentage Analysis In this analysis the trend percentages are calculated for each item by taking the figure of that item for the base year. The analyst is able to see the trend of figures, whether moving upward or downward.

THE ANALYSIS OF ARCELIK CO Trend Percentage Analysis The trend percentage of current liabilities for 2009 is calculated as follows:   2008 2009 LIABILITIES Current Liabilities 2.991.628 3.179.663 100 106

THE ANALYSIS OF ARCELIK CO   2008 2009 2010 2011 ASSETS CURRENT ASSETS 4.424.227 4.157.955 4.748.439 6.033.849 100 94 107 136 Cash and Cash Equivalents 415.586 904.734 1.317.166 1.173.889 218 317 282 Financial Assets 26.039 4.444 1.185 2.932 17 5 11 Trade Receivables 2.575.499 2.233.011 2.324.578 3.180.870 87 90 124 Inventories 1.303.931 906.786 987.526 1.530.141 70 76 117 Other Current Assets 103.172 108.980 117.984 146.017 106 114 142 NON-CURRENT ASSETS 2.435.574 2.268.703 2.573.320 3.163.904 93 130 552.503 400.068 671.140 507.394 72 121 92 Investments Accounted for Using the Equity Method 123.602 129.169 136.604 160.580 105 111 Non-current Assets Held for Sale 8.788 6.344 5.480 6.441 62 73 Tangible Assets 1.272.333 1.244.109 1.252.245 1.446.841 98 Intangible Assets 402.215 439.993 461.417 783.094 109 115 195 Goodwill 10.255 7.511 7.190 196.167 1.913 Deferred Tax Assets 65.878 41.509 39.244 63.387 63 60 96 TOTAL ASSETS 6.859.801 6.426.658 7.321.759 9.197.753 134

THE ANALYSIS OF ARCELIK CO   2008 2009 2010 2011 LIABILITIES Current Liabilities 2.991.628 3.179.663 2.341.989 3.530.620 100 106 78 118 Financial Liabilities 1.914.505 1.923.727 839.220 1.628.943 44 85 Other Financial Liabilities 5.533 698 129.769 183.886 13 2.345 3.323 Trade Payables 719.734 866.935 968.962 1.249.531 120 135 174 Provisions for Tax 4.063 14.356 18.970 23.250 353 467 572 Provisions 198.294 204.659 205.160 232.390 103 117 Other Liabilities 149.499 169.288 179.908 212.620 113 142 Non-Current Liabilities 1.866.844 503.492 1.572.036 1.944.953 27 84 104 1.576.603 188.314 1.218.072 1.528.237 12 77 97 72.955 67.380 63.681 92 87 53.197 60.761 58.136 81.519 114 109 153 Provisions for Employee Benefits 60.217 85.335 99.700 106.782 166 177 Deferred Tax Liabilities 91.471 95.201 128.549 226.142 141 247 Other Non-Current Liabilities 12.401 6.501 3.898 2.273 52 31 18 EQUITY 2.001.329 2.743.503 3.407.734 3.722.180 137 170 186 TOTAL 6.859.801 6.426.658 7.321.759 9.197.753 94 107 134

THE ANALYSIS OF ARCELIK CO 2008 2009 2010 2011 Trade Receivables 100 87 90 124 Sales 155 149 157 191 Interpretation: It demonstrates and a decrease in 2009 and 2010 but demonstrates an increase in 2011 comparing with base year. On the other hand sales demonstrates an increase in the years 2010 and 2011, comparing with the base year.

THE ANALYSIS OF ARCELIK CO  BALANCE SHEET OF ARCELİK CO. 2008 2009 ASSETS Current Assets 4.424.227 4.157.955 Cash and Cash Equivalents 415.586 904.734 Financial Assets 26.039 4.444 Trade Receivables 2.575.499 2.233.011 Inventories 1.303.931 906.786 Other Current Assets 103.172 108.980 Non-Current Assets 2.435.574 2.268.703 TOTAL ASSETS 6.859.801 6.426.658   LIABILITIES Current Liabilities 2.991.628 3.179.663 2008 2009 Liquidity Analysis Current Ratio 1,48 1,31 Quick Ratio 1,01 0,99 Cash Ratio 0,14 0,28 Interpretation: Arcelik has a positive working capital and enough liquidity to pay short term debts. QR demonstrates that the current assets which can be convert into cash are enough to pay short term debts. Arcelik has cash and cash equivalents which can be used to pay 14% of short term debts for the year 2008.

THE ANALYSIS OF ARCELIK CO The Importance of Turnover Ratios in Determining The Liquidity of a Firm Working capital is a measure of liquidity of a business. The working capital comprises from Cash, A/R, Inventory and A/P. As stated before, the operating cycle is a significant issue in determining the need of working capital. As a result, Turnovers of A/R, A/P and Inventory enable to determine the operating cycle of period. If the collection period of Accounts Receivable, days to sell inventories and the pay period (day) of Accounts Payable are not harmonized, this case will affect the liquidity of a company.

THE ANALYSIS OF ARCELIK CO   2008 2009 ASSETS Current Assets 4.424.227 4.157.955 Cash and Cash Equivalents 415.586 904.734 Financial Assets 26.039 4.444 Trade Receivables 2.575.499 2.233.011 Inventories 1.303.931 906.786 Other Current Assets 103.172 108.980 Non-Current Assets 2.435.574 2.268.703 TOTAL ASSETS 6.859.801 6.426.658 LIABILITIES Current Liabilities 2.991.628 3.179.663 2008 2009 Liquidity Analysis Current Ratio 1,48 1,31 Quick Ratio 1,01 0,99 Cash Ratio 0,14 0,28 Activity Analysis Inventory Turnover 3,76 4,87 Days Inventory 96 74 Acc. Receivable Turnover 2,66 2,95 Days Acc. Receivable 135 122 Acc. Payable Turnover 9 7 Days Acc. Payable 42 51 Assets Turnover 1,0 Non-Current Assets Turnover 2,81 2,91 INCOME STATEMENT 2008 2009 Sales 6.852.289 6.591.895 Cost of Goods Sold (4.905.292) (4.417.892)

THE ANALYSIS OF ARCELIK CO Interpretation: Comparing with 2008, there is a decrease in liquidity ratios. This may be caused by two case: The operating cycle period is not compatible and Financial structure The turnover ratios indicate that in 2008, Arcelik pays its trade debts in 42 days and collects its trade receivables in 135 days. There is a gap between collectable assets and trade payables. Another component of working capital is inventories and Arcelik sells its inventories in 96 days. So, the operating cycle period is not compatible and this causes a deficit in need of working capital. As seen in 2009 ratios, Arcelik shortened the turn of inventories and days of A/R, while the days of trade payables were extended. 2008 2009 Liquidity Analysis Current Ratio 1,48 1,31 Quick Ratio 1,01 0,99 Cash Ratio 0,14 0,28 Activity Analysis Inventory Turnover 3,76 4,87 Days Inventory 96 74 Acc.Receivable Turnover 2,66 2,95 Days Acc.Receivable 135 122 Acc. Payable Turnover 9 7 Days Acc. Payable 42 51 Assets Turnover 1,0 Non-Current Assets Turnover 2,81 2,91

THE ANALYSIS OF ARCELIK CO Common-Sized Ratios (Vertical Analysis) Solvency Ratios 2008 2009 Financial Leverage 0,71 0,57 Debt-Equity 2,43 1,34 Current Assets/Total Assets 0,64 0,65 Non-Current Assets / Total Assets 0,36 0,35 Current Liabilities/Total Assets 0,44 0,49 Non-current Liabilities/Total Assets 0,27 0,08 Equity/Total Asset 0,29 0,43   31.12.2008 31.12.2009 ASSETS Current Assets 4.424.227 4.157.955 Non-Current Assets 2.435.574 2.268.703 TOTAL ASSETS 6.859.801 6.426.658 LIABILITIES Current Liabilities 2.991.628 3.179.663 Non-Current Liabilities 1.866.844 503.492 EQUITY 2.001.329 2.743.503 TOTAL LIABILITIES AND EQUITY Interpretation: Arcelik financed 71% of its assets with debt. In other words, the proportion of debt is 71% in 2008 and the proportion of debt is 57% in 2009. Compared to 2008, Arcelik shortened the usage of debt in 2009.

THE ANALYSIS OF ARCELIK CO The financial ratios of Arcelik Co. and Vestel Co. Profitability Ratios of Arcelik 2008 2009 Net Profit Margin 0,001 0,08 ROA 0,00 ROE 0,03 0,17 ROC 0,18 Financial Leverage 0,71 0,57 Profitability Ratios of Vestel 2008 2009 ROA 0,04 0,13 ROE 0,06 0,20 ROC 0,19 0,31 Financial Leverage 0,44 0,36 Interpretation: The proportion of debt is 71% in 2008 and the proportion of debt is 57% in 2009. For 2008, Arcelik did not take the advantage of financial leverage. Because the ROC ratio is higher than ROE. The interest costs are high for the year 2008. But in 2009 the proportion of debt is decreased to %57. According to the comparison of ROE and ROC, we can say that Arcelik took the advantage of financial leverage for the year 2009.

THE ANALYSIS OF ARCELIK CO INCOME STATEMENT 2008 2009 Increase/Decrease % Sales 6.852.289 6.591.895 (260.394) (0,04) Cost of Goods Sold (4.905.292) (4.417.892) 487.400 (0,10) Gross Profit 1.946.997 2.174.003 227.006 0,12 Operating Expenses Marketing and Saling Expenses (1.157.275) (1.179.358) 22.083 (0,02) General Administrative Expenses (295.616) (251.972) (43.644) 0,15 Research and Development Expenses (54.517) (48.480) (6.037) 0,11 Other Operating Income 44.934 184.966 140.032 3,12 Other Operating Expense (44.972) (130.313) 85.341 (1,90) Operating Profit 439.551 748.846 309.295 0,70 Share of the Profit/Loss of Associates Accounted for Using the Equity Method 12.473 5.567 (6.906) (0,55) Financial Income 741.036 402.124 (338.912) (0,46) Financial Expense (1.163.939) (580.094) (583.845) 0,50 Profit Before Tax 29.121 576.443 547.322 18,79 Tax Expense of Current Period (29.693) (45.910) 16.217 Deferred Tax Expense 7.128 (27.507) (20.379) (2,86) Net Profit 6.556 503.026 496.470 75,73

THE ANALYSIS OF ARCELIK CO Inter-company analysis of Arcelik Co. and Vestel Co. Profitability Ratios of Arcelik 2008 2009 Gross Profit Margin 0,28 0,33 Operating Profit Margin 0,06 0,11 Pretax Margin 0,01 0,27 Net Profit Margin 0,001 0,08 Profitability Ratios of Vestel 2008 2009 Gross Profit Margin 0,10 0,17 Operating Profit Margin 0,06 0,13 Pretax Margin 0,02 0,09 Net Profit Margin 0,024 0,091

Profitability Ratios of Arcelik THE ANALYSIS OF ARCELIK CO Sectorial analysis of Arcelik Co. and Industrial Averages Profitability Ratios of Arcelik Industrial Averages 2008 2009 Gross Profit Margin 0,28 0,33 0,24 0,17 Operating Profit Margin 0,06 0,11 0,10 0,08 Pretax Margin 0,01 0,27 Net Profit Margin 0,001