CBQ, Inc. (China Business Quotient) (fka CBQI)

[Bixmann]

JB

I Suppose Your 10-K comments and my being a clown are worth a discussion. First and formost,unless there is something you have not told the board in the past, we are not cheerleaders. We are INVESTORS.

Annual and Quarterly SEC reports fail to discuss the most important details investors must know about a company's operations(STOCK PRICE).

Neither traditional accounting data nor the modified data on 10Ks deal with stock prices. This is a serious omission, since the primary goal of management is to maximize CBQI's stock price. Most investors do not analyze a stocks price and compare it to its actual value. Many investors don't even know how to determine the value of a stock. Instead, they rely on analysts to do that. The problem with CBQI is that no analysit would sit down and waist his time trying to expose the pros and cons of this firm. There are too many company's and too few analysts to cover every organization(CBQI Included). Surely you agree, in this instance; that the closest thing that investors who lack analysis skills have to a real life analyst report are the other investors who have been researching and following a stock over time.

This is a problem when none of them understand how to conduct valuations. As indicated earlier, Valuations are calucalted two ways and both related to Shareholder wealth.

Shareholder's wealth is maximized by maximizing the difference between the market value of the firm's stock and the amount of equity capital that was supplied by sharholders. This difference is called the "Market Value Added" (MVA).

MVA = Market value of stock - Equity capital supplied by shareholders = (Shares Outstanding)(Stock Price) - Total common equity. FOR CBQI, THIS IS NEGATIVE.

While MVA measures the effects of managerial actions since the very inception of the company, Econmic Value Added (EVA), focuses on managerial effectiveness in a given year.

EVA=NOPAT (Net Operation Profit After Taxes)-After tax dollar cost of capital used to support operations = EBIT (Earnings before interest and taxes) - (Operating Capital)(After-tax percentage cost of capital)