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Exhibit 4.1 Common-size Balance Sheets for Diaz Manufacturing ($ millions) 2017 2016 % Industry 26.80% 12% 10.74% Assets: Cash and marketable sec $ Account receivables Inventories Other current assets Total current assets $ Plant and equipments Goodwill and other asse Total assets $ 288.5 306.2 423.8 21.3 1,039.8 399.4 450.0 1,889.2 Profitability ratios: Gross profit margin Operating profit margin Net Profit margin Basic eaming power (BEP) ROA ROE Return on invested capital (ROIC) EPS $ 16.6 268.8 372.7 29.9 $ 688.0 394.2 411.6 $ 1,493.8 2017 30.88% 10.77% 7.58% 8.91% 6.30% 12.64% 8.05% $2.17 9.34% 2016 2015 29.70% (Sales-COGS)/Sales 10.04% EBIT/Sales 7.58% NI/Sales 9.32% EBIT/TA 7.00% NI/TA 12.48% NI/TE 10.48% EBIT*(1-t)/(NP+LTD+TE) $1.93 NI/shares 13.07% $ 1.65 I Market valuation ratios: PE Market-to-book ratio - 18.1 2.84 22.38 2.83 P/EPS (P"shares)/TE Liquidity ratios: Current ratio Quick ratio 2.1 1.5 2.75 1.63 1.99 CA/CL 0.91 (CA-Inventory/CL Liabilities and Stockholders' Equities Accounts payable and a $ 349.3 Notes payable 10.5 Accrued income taxes 18 Total current liabilities $ 377.8 Long-term debt 574 Total liabilities $ 951.8 Common stock 0.5 Additional paid in capit 892.4 Retained eamings 67.8 Less: Treasury stock -23.3 Total stockholders' eq $ 937.4 Total liabilities and equi $ 1,889.2 $ 325.0 4.2 16.8 $ 346.0 305.6 $ 651.6 0.5 892.4 -50.7 0 $ 842.2 $ 1,493.8 I Leverage ratios: Total debt ratio Debt-equity ratio Equity multiplier Debt-Capital ratio Interest coverage (TLE) Cash coverage 0.18 0.4 2.02 50.40% 1.02 2.02 38.40% 30.07 44.91 43.60% TL/TA 0.77 TL/TE 1.77 TA/TE 26.90% (NPHLTD/(NP+LTD+TE) 7.73% EBIT/Interest exp. 11.92% (EBIT+Dep/Interest exp. 7 7.5 2017 2016 Exhibit 4.1 Common-size Income statements for Diaz Manufacturing ($ ml Asset Management Efficiency ratios: Inventory tumover 5.4 2.55 2.62 COGS/Inventory; Sales/inventory Day's sales in inventory 365/Inventory tumover (conversion period) 67.59 143.08 139.55 Net sales $ 1,563.7 $ 1,386.7 AR tumover 4.9 5.11 5.16 Sales/AR Cost of goods sold 1,081.1 974.8 Day's sales outstanding (DSO) 76.7 71.47 70.75 365/AR turnover Selling and administrative 231.1 197.4 FA tumover 3.5 1.84 1.72 Sales/FA Earnings before interest, t $ 251.5 $ 214.5 TA tumover 0.87 0.83 0.93 Sales/TA Depreciation 83.1 75.3 Earnings before interest ar $ 168.4 $ 139.2 Du-Pont Equations decompose the company's profit generation into linterest expense 5.6 18 profit margin, asset management and financia leverage Earnings before taxes (EBT $ 162.8 $ 121.2 Taxes 44.3 16.1 TROA= Profit margin x TA tumover 6.27% Net income $ 118.5 $ 105.1 TROEROA x Equity Multiplier = Profit margin x TA Turnover x Equity Mu 12.64% Dividends 0 0 0 Additions to retained earr $ $ 118.5 $ 105.1 Diaz Manufacturing has shares outstanding Its stock price at the end of 2017 was._---__-48.61 - 1. Do creditors and shareholders have equal interest in the company's financial position? 2. How does the company compare with the industry with respect to financial leverage 3. How does the company'd utilization of assets stack up against other firms in the same industry? 3. What can we say about the company's profitability? 4. Do investors have high or low opinion about the company? 5. What are the company's major strength and weakness? Exhibit 4.1 Common-size Balance Sheets for Diaz Manufacturing ($ millions) 2017 2016 % Industry 26.80% 12% 10.74% Assets: Cash and marketable sec $ Account receivables Inventories Other current assets Total current assets $ Plant and equipments Goodwill and other asse Total assets $ 288.5 306.2 423.8 21.3 1,039.8 399.4 450.0 1,889.2 Profitability ratios: Gross profit margin Operating profit margin Net Profit margin Basic eaming power (BEP) ROA ROE Return on invested capital (ROIC) EPS $ 16.6 268.8 372.7 29.9 $ 688.0 394.2 411.6 $ 1,493.8 2017 30.88% 10.77% 7.58% 8.91% 6.30% 12.64% 8.05% $2.17 9.34% 2016 2015 29.70% (Sales-COGS)/Sales 10.04% EBIT/Sales 7.58% NI/Sales 9.32% EBIT/TA 7.00% NI/TA 12.48% NI/TE 10.48% EBIT*(1-t)/(NP+LTD+TE) $1.93 NI/shares 13.07% $ 1.65 I Market valuation ratios: PE Market-to-book ratio - 18.1 2.84 22.38 2.83 P/EPS (P"shares)/TE Liquidity ratios: Current ratio Quick ratio 2.1 1.5 2.75 1.63 1.99 CA/CL 0.91 (CA-Inventory/CL Liabilities and Stockholders' Equities Accounts payable and a $ 349.3 Notes payable 10.5 Accrued income taxes 18 Total current liabilities $ 377.8 Long-term debt 574 Total liabilities $ 951.8 Common stock 0.5 Additional paid in capit 892.4 Retained eamings 67.8 Less: Treasury stock -23.3 Total stockholders' eq $ 937.4 Total liabilities and equi $ 1,889.2 $ 325.0 4.2 16.8 $ 346.0 305.6 $ 651.6 0.5 892.4 -50.7 0 $ 842.2 $ 1,493.8 I Leverage ratios: Total debt ratio Debt-equity ratio Equity multiplier Debt-Capital ratio Interest coverage (TLE) Cash coverage 0.18 0.4 2.02 50.40% 1.02 2.02 38.40% 30.07 44.91 43.60% TL/TA 0.77 TL/TE 1.77 TA/TE 26.90% (NPHLTD/(NP+LTD+TE) 7.73% EBIT/Interest exp. 11.92% (EBIT+Dep/Interest exp. 7 7.5 2017 2016 Exhibit 4.1 Common-size Income statements for Diaz Manufacturing ($ ml Asset Management Efficiency ratios: Inventory tumover 5.4 2.55 2.62 COGS/Inventory; Sales/inventory Day's sales in inventory 365/Inventory tumover (conversion period) 67.59 143.08 139.55 Net sales $ 1,563.7 $ 1,386.7 AR tumover 4.9 5.11 5.16 Sales/AR Cost of goods sold 1,081.1 974.8 Day's sales outstanding (DSO) 76.7 71.47 70.75 365/AR turnover Selling and administrative 231.1 197.4 FA tumover 3.5 1.84 1.72 Sales/FA Earnings before interest, t $ 251.5 $ 214.5 TA tumover 0.87 0.83 0.93 Sales/TA Depreciation 83.1 75.3 Earnings before interest ar $ 168.4 $ 139.2 Du-Pont Equations decompose the company's profit generation into linterest expense 5.6 18 profit margin, asset management and financia leverage Earnings before taxes (EBT $ 162.8 $ 121.2 Taxes 44.3 16.1 TROA= Profit margin x TA tumover 6.27% Net income $ 118.5 $ 105.1 TROEROA x Equity Multiplier = Profit margin x TA Turnover x Equity Mu 12.64% Dividends 0 0 0 Additions to retained earr $ $ 118.5 $ 105.1 Diaz Manufacturing has shares outstanding Its stock price at the end of 2017 was._---__-48.61 - 1. Do creditors and shareholders have equal interest in the company's financial position? 2. How does the company compare with the industry with respect to financial leverage 3. How does the company'd utilization of assets stack up against other firms in the same industry? 3. What can we say about the company's profitability? 4. Do investors have high or low opinion about the company? 5. What are the company's major strength and weakness

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