In order to calculate the expected values, we apply statistical techniques to the company's historical data. If there are only two periods of historical data, we perform a simple trend analysis.
Example:
Using historical values for sales from 2003 and 2004, what is the predicted value for sales in 2005?12/15/2005 12/15/2004 12/15/2003 Sales $8 $5 $3
The trend analysis is as follows:
Expected % Change = ($5  $3) / $3 = 66.66%
Expected 2005 Sales = $5 * 1.66 = $8.3
If there are three or more periods of historical data, we use either Simple Exponential Smoothing or the adjusted HoltWinters Exponential Smoothing model to calculate the expected values. For more information about each algorithm, please see the prediction algorithms section. The following table lists each Analytical Procedures account with its corresponding method of prediction:
Account  Prediction Algorithm 
Sales  Adjusted HoltWinters Exponential Smoothing 
Cost of Sales  Calculated 
Gross Profits  Calculated 
Gross Profit Margin  Exponential Smoothing 
Depreciation Percent  Adjusted HoltWinters Exponential Smoothing 
Depreciation  Calculated 
Amortization Percent  Adjusted HoltWinters Exponential Smoothing 
Amortization  Calculated 
Other Overhead or S,G,&A Expense  Adjusted HoltWinters Exponential Smoothing 
Other Operating Income  Adjusted HoltWinters Exponential Smoothing 
Other Operating Expenses  Adjusted HoltWinters Exponential Smoothing 
Operating Profit  Calculated 
Interest Percent  Adjusted HoltWinters Exponential Smoothing 
Interest Expense  Calculated 
Other Income  Adjusted HoltWinters Exponential Smoothing 
Other Expenses  Adjusted HoltWinters Exponential Smoothing 
Net Profit before Taxes  Calculated 
Adjusted Owner's Compensation  Most recent historical value 
Adjusted Net Profit before Taxes  Calculated 
Net Profit Margin  Calculated 
EBITDA  Calculated 
Extraordinary Gain  Adjusted HoltWinters Exponential Smoothing 
Extraordinary Loss  Adjusted HoltWinters Exponential Smoothing 
Taxes Paid  Calculated 
Net Income  Calculated 
Cash  Calculated 
Accounts Receivable  Calculated 
Accounts Receivable Days  Adjusted HoltWinters Exponential Smoothing 
Inventory  Calculated 
Inventory Days  Adjusted HoltWinters Exponential Smoothing 
Other Current Assets  Adjusted HoltWinters Exponential Smoothing 
Total Current Assets  Calculated 
Gross Fixed Assets  Adjusted HoltWinters Exponential Smoothing 
Accumulated Depreciation  Calculated 
Net Fixed Assets  Calculated 
Gross Intangible Assets  Adjusted HoltWinters Exponential Smoothing 
Accumulated Amortization  Calculated 
Net Intangible Assets  Calculated 
Other Assets  Adjusted HoltWinters Exponential Smoothing 
Total Assets  Calculated 
Accounts Payable  Calculated 
Accounts Payable Days  Adjusted HoltWinters Exponential Smoothing 
Short Term Debt  Adjusted HoltWinters Exponential Smoothing 
Current Portion of Long Term Debt  Adjusted HoltWinters Exponential Smoothing 
Other Current Liabilities  Adjusted HoltWinters Exponential Smoothing 
Total Current Liabilities  Calculated 
Notes Payable / Senior Debt  Calculated 
Notes Payable / Subordinated Debt  Calculated 
Other Long Term Liabilities  Calculated 
Long Term Liabilities  Calculated 
Total Liabilities  Calculated 
Preferred Stock  Calculated 
Common Stock  Calculated 
Additional Paidin Capital  Calculated 
Other Stock / Equity  Calculated 
Ending Retained Earnings  Calculated 
Total Equity  Calculated 
Number of Employees  Adjusted HoltWinters Exponential Smoothing 
ZScore  Calculated 
Analytical Procedures for Nonprofits 

Program Service Revenue  Adjusted HoltWinters Exponential Smoothing 
Contributions  Adjusted HoltWinters Exponential Smoothing 
Government Grants  Adjusted HoltWinters Exponential Smoothing 
Investment Revenue  Adjusted HoltWinters Exponential Smoothing 
Other Operating Income  Adjusted HoltWinters Exponential Smoothing 
Membership Dues  Adjusted HoltWinters Exponential Smoothing 
Net Assets Released From Restrictions  Adjusted HoltWinters Exponential Smoothing 
Total Unrestricted Revenue  Direct Calculation: Sum of Expected Unrestricted Revenue Accounts 
Program Service Expenses  Direct Calculation: Total Unrestricted Revenue Expected * (1  Gross Program Margin Expected) 
Gross Yield  Direct Calculation: Total Unrestricted Revenue Expected  Program Service Expenses Expected 
Gross Program Margin  Exponential Smoothing 
Fundraising Expenses  Adjusted HoltWinters Exponential Smoothing 
Administration Expenses  Adjusted HoltWinters Exponential Smoothing 
Other Operating Expenses  Adjusted HoltWinters Exponential Smoothing 
Total Operating Expenses  Direct Calculation: Sum of Expenses Expected 
Operating Yield  Direct Calculation: Gross Yield Expected  Total Operating Expenses Expected 
Operating Margin  Direct Calculation: Operating Yield Expected / Total Unrestricted Revenue Expected 
Other Inflows  Adjusted HoltWinters Exponential Smoothing 
Other Outflows  Adjusted HoltWinters Exponential Smoothing 
Total Change in Net Assets  Direct Calculation: Operating Yield Expected + Other Inflows Expected  Other Outflows Expected 
Total Cash & Cash Equivalents  Direct Calculation: Prior Period Cash + Total Change in Net Assets Expected  Change in Total Receivables Expected  Change in Inventory Expected  Change in Other Current Assets Expected  Change in Investment Assets Expected  Change in Other Assets Expected  Change in Net Fixed Assets Expected + Change in Payables Expected + Change in Other Current Liabilities Expected + Change in Total Long Term Liabilities Expected 
Restricted Cash  Percent of Total Cash and Cash Equivalents 
Unrestricted Cash  Percent of Total Cash and Cash Equivalents 
Total Receivables  Direct Calculation: Sum of Receivable Sub Accounts 
Other Receivables  (Other Receivables Days Expected * Total Unrestricted Revenue Expected * Annualization Factor) / 365 
Contributions Receivable  (Contributions Receivable Days Expected * Total Unrestricted Revenue Expected * Annualization Factor) / 365 
Accounts Receivable  Direct Calculation: (Accounts receivable Days Expected * Total Unrestricted Revenue Expected * Annualization Factor) / 365 
Receivable Days  Adjusted HoltWinters Exponential Smoothing 
Inventory  (Inventory Days Expected * Total Unrestricted Revenue Expected * Annualization Factor) / 365 
Inventory Days  Adjusted HoltWinters Exponential Smoothing 
Other Current Assets  Adjusted HoltWinters Exponential Smoothing 
Total Current Assets  Direct Calculation: Sum of Current Asset Accounts Expected 
Gross Fixed Assets  Adjusted HoltWinters Exponential Smoothing 
Accumulated Depreciation  Direct Calculation: Prior Period Accumulated Depreciation + Total Depreciation Expected 
Net Fixed Assets  Direct Calculation 
Long Term Investment Assets  Adjusted HoltWinters Exponential Smoothing 
Other Assets  Adjusted HoltWinters Exponential Smoothing 
Total Assets  Direct Calculation 
Payables  Direct Calculation: (Payable Days Expected * Total Unrestricted Revenue Expected * Annualization Factor) / 365 
Accounts Payable  Direct Calculation: (Accounts Payable Days Expected * Total Unrestricted Revenue Expected * Annualization Factor) / 365 
Payable Days  Adjusted HoltWinters Exponential Smoothing 
Short Term Debt  Adjusted HoltWinters Exponential Smoothing 
Current Portion of Long Term Debt  Adjusted HoltWinters Exponential Smoothing 
Other Current Liabilities  Adjusted HoltWinters Exponential Smoothing 
Total Current Liabilities  Direct Calculation 
Total Long Term Liabilities  Direct Calculation: Prior Period Total Long Term Liabilities + Change in Gross Fixed Assets + Change in Investment Assets + Change in Other Assets 
Total Liabilities  Direct Calculation: Total Current Liabilities Expected + Total Long Term Liabilities Expected 
Total Net Assets  Direct Calculation: Total Assets Expected  Total Liabilities Expected 
Number of Employees (FTE)  Adjusted HoltWinters Exponential Smoothing 