Terra Property Trust, Inc.

Where It Passes

Where It Falls Short

• Profitability0% pass✓ 2✗ 33▾

  No clean pass — all 16 investors flag at least one profitability criterion

  Positive EPS (10 years)2/8 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)-479.5%

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)2/8 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)-13.8%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)-3.7% (latest)

  ✗BuffettStable or rising over 10 years

  Free Cash Flow Proxy

  ✗BuffettPositive and growing

  Earnings Variance (10-yr CoV)N/A (negative mean EPS)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROE-34.1%

  ✗Lynch> 15%

  EBIT / Enterprise Value-0.3%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-0.3%, ROC=None

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets-7.92%

  ✗PiotroskiROA > 0

  ROA Change YoY-6.85% -> -7.92% (delta: -1.07%)

  ✗PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=0.54%, ROA=-7.92%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY

  ✗PiotroskiImproved YoY

  Pre-Tax Income / Revenue-77.3%

  ✗Dreman>= 8%

  Net Income / Shareholders' Equity-34.1%

  ✗Dreman> 12%

  Margin of Safety

  ✗PabraiP/FFO < 15

  Return on Equity-20.8% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency2/7 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue-119.8%

  ✗Ackman>= 15%

  Net Income / Shareholders Equity-34.1%

  ✗Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend-36.1% (2023) -> -3.7% (2025)

  ✓TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendrevenue flat/down, operating margin -36.1% -> -3.7%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization-12.97%; #4310/6340 (top 68.0%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity-34.06%; #3973/5226 (top 76.0%)

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0321; #1991/5884 (top 33.8%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years2/7 years positive

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Valuation0% pass✓ 1✗ 24▾

  No clean pass — all 13 investors flag at least one valuation criterion

  Price / FFO per ShareN/A (non-positive FFO)

  ✗Graham<= 15x✗Dreman< 12x✗Ackman<= 25

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value-0.3%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-0.3%, ROC=None

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / (CFO / Shares)159.9x

  ✗Dreman< 8x

  Valuation ReasonablenessOE Yield=-7.8%

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/FFO or FFO YieldFFO Yield=-7.8%

  ✗PabraiP/FFO < 15 or FFO Yield > 10%

  P/B or P/E vs. Historical AverageP/B=2.1x

  ✗MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Price / EPS

  ✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price vs. Trailing Low100% of trailing low ($12.57)

  ✓Templeton<= 120% of trailing low (certified split-adjusted live window)

  Price / Book Value per Share2.1x

  ✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Net income / market capitalization-12.97%; #4310/6340 (top 68.0%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization+0.3807; #3353/6449 (top 52.0%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per Share2.12x

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change-61.3%

  ✗SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+0.0578; #4528/5247 (top 86.3%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date-38.62%; #4749/6202 (top 76.6%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Growth0% pass✓ 2✗ 11▾

  No clean pass — all 8 investors flag at least one growth criterion

  EPS Growth (3-yr avg, 10-yr window)-479.5%

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthN/A (no inventory)

  ✓LynchInventory growth < Revenue growth

  EPS Growth Direction$0.60 (2019) -> $-1.14 (2025)

  ✗DremanPositive over recent years

  EPS CAGR

  ✗Dreman> 5% annualized

  Positive Net Income Frequency2/7 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth-26.8%

  ✗Ackman>= 5%

  Positive EPS Growth Frequency3/5 years with positive EPS growth

  ✓AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendrevenue flat/down, operating margin -36.1% -> -3.7%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR-6.8%

  ✗SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized
• Efficiency0% pass✓ 1✗ 10▾

  No clean pass — all 8 investors flag at least one efficiency criterion

  Current Ratio

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)-0.1%

  ✗Buffett> 10%

  ROIC - WACC-10.1%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)

  ✗Greenblatt> 25%

  Current Ratio Change YoY

  ✗PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.09x -> 0.10x

  ✓PiotroskiImproved YoY

  Current Assets / Current Liabilities

  ✗Dreman> 1.5

  Return on Invested Capital-7.3%

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=-3.0%; FY2024: ROIC=0.6%; FY2025: ROIC=-0.3%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROICN/A (non-positive net income)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)0/5 years above 12% (latest -0.3%)

  ✗SleepROIC > 12% in a majority of years
• Verdicts8% pass✓ 1✗ 12▾

  Split decision: 12 FAIL · 3 NEUTRAL · 1 PASS

  Overall verdict

  ✗GrahamFAIL (0/7)✗BuffettFAIL (0/9)✗LynchFAIL (1/7)•GreenblattNot ranked✓PiotroskiPASS (F-Score 4)✗DremanFAIL (1/10)✗MungerFAIL (1/4)✗PabraiFAIL (0/3)✗AkreFAIL (0/6)✗MarksFAIL (0/5)✗AckmanFAIL (3/9)•TempletonNEUTRAL (5/8)✗SleepFAIL (2/6)•AsnessNEUTRAL (Not ranked)✗NeffFAIL (1/6)✗SchlossFAIL (2/7)•OshaughnessyNEUTRAL (Not ranked)
• Debt & Leverage25% pass✓ 4✗ 11▾

  9 of 12 flag TPTS's debt & leverage — Graham, Buffett, Lynch +6 more

  Total Debt / Shareholders' Equity0.97

  ✗Dreman< 0.8✓Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✓SchlossD/E < 1.00x

  LT Debt vs Net Current Assets

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 0.97, IC: -2.2x

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity0.97

  ✗Lynch< 0.33

  Cash - Long-term Debt$-111.2M

  ✗LynchPositive preferred

  LT Debt / Total Assets Change60.08% -> 50.88%

  ✓PiotroskiDecreased YoY

  Current Assets / Current Liabilities

  ✗Dreman> 1.5✗SchlossCurrent ratio >= 1.50x (app cutoff)

  Debt Levels0.97

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDAIC=-0.1x, D/EBITDA=70.8x

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity0.97

  ✓Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-0.9662; #3188/4210 (top 75.7%)

  ✗AsnessTop 30% of eligible cross-section
• Cash Flow33% pass✓ 3✗ 4▾

  4 of 6 flag TPTS's cash flow — Buffett, Dreman, Neff +1 more

  Free Cash Flow Proxy

  ✗BuffettPositive and growing

  Operating Cash Flow$1.9M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=0.54%, ROA=-7.92%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)159.9x

  ✗Dreman< 8x

  Positive Operating Cash Flow frequency6/7 years positive

  ✓SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures

  ✗Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization

  ✗OshaughnessyTop 10% of eligible cross-section