Stone Mountain Corporation

Re$erve Studies

FINANCIAL ANALYSIS

There are two financial analysis methods provided in our reserve studies:

● Optimized Cash Flow Analysis

● Straight-Line Depreciation Analysis

Definition:*Cash Flow Analysis* is the formal accounting method used to prove that a series of expenses can be funded over a specified time period.

In the State of California, the required period is 30 years, so reserve cash flow analyses done in California are 30-year projections.

Straight-Line Depreciation Analysis calculates how much depreciation will occur in the next year for all reserve components (roofs, streets, pools, tennis courts, etc). It is essentially a one-year projection.

Each analysis method is discussed with excerpts from our reserve studies in the following pages (click on the links above).

● Optimized Cash Flow Analysis

● Straight-Line Depreciation Analysis

Definition:

In the State of California, the required period is 30 years, so reserve cash flow analyses done in California are 30-year projections.

Straight-Line Depreciation Analysis calculates how much depreciation will occur in the next year for all reserve components (roofs, streets, pools, tennis courts, etc). It is essentially a one-year projection.

Each analysis method is discussed with excerpts from our reserve studies in the following pages (click on the links above).