SCORING SYSTEM

The Company Health Test (CHT) scoring system is based on a 5-point scale. That is, there are 5 possible scores for each question: 5-4-3-2-1 or 10-8-6-4-2 for "double-point" key issues.

Questions that are answered by the Respondent with a "don't know" or "not applicable" are zeroed out so that they have a neutral effect on individual percentages and group comparisons; although TMF does track these responses because they give other relevant indications about the Company.

The total number of questions is 170. The maximum score - if all questions were answered with a response other than "don't know" (D.K) or "not applicable" (N.A) - is 1000 points. This scoring system is based upon the premise that it is not appropriate for a Company who got the theoretical minimum score (1 point for each question except "double point" questions -2 points) to end up with a zero score. A company theoretically worthy of a zero score would not be in business to take the test, and would have inadequate management, products, sales, marketing, operations, finances, and personnel policies.

This scoring system is predicated on the highest score possible being 100% and the lowest possible being 20%. Therefore an average score - if all questions answered would theoretically get 3 points, or 6 for "Double Pointers" - would be 60%, not 50%.

By the same token, TMF has been giving the CHT for over 10 years and many releases, and has never seen an overall "total score" of more than 80% for any Company. The typical range is 45% to 75%. Companies that fall below 50% overall, or in any one category, tend to have very significant issues that need dealing with urgently and dramatically. Those with a 70% plus score are usually in very good shape.

This means a well-rounded management team, excellent internal departmental cooperation and inter-communication, competitive products, effective sales and marketing practices, strong operations and adequate resources. Those in the "Improvement Band" between 51% and 69% usually have certain areas of strength and certain critical weaknesses, which tend to be brought out in the individual Section scores. Most frequently scores fall into the lower end of the "Improvement Band" with scores of 51-58%.

Generally speaking, given focus on the key issues uncovered, companies in this area - providing they have adequate resources to effect change -can do so very rapidly (3-6 months).