VALUE LINE INC - 10-K Annual Report

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

For the fiscal year ended April 30, 2001 Commission File Number 0-11306

VALUE LINE, INC.
(Exact name of registrant as specified in its charter)

New York 13-3139843
(State or other jurisdiction of (IRS Employer Identification
incorporation or organization) Number)

220 East 42nd Street, New York, N.Y. 10017-5891
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (212) 907-1500

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $.10 par value

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days.

Yes /X/ No / /

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]

The aggregate market value of the registrant's voting stock held by
non-affiliates on June 18, 2001 was $54,575,452.

There were 9,978,925 shares of the Company's Common Stock outstanding at
June 18, 2001.

DOCUMENTS INCORPORATED BY REFERENCE

None

Part I

Item 1. BUSINESS.

Value Line, Inc. (the "Company"), a New York corporation, was organized in
1982 and is the successor to substantially all of the operations of Arnold
Bernhard & Company, Inc. ("AB&Co."). As of June 28, 2001, AB & Co. owned
approximately 86% of the Company's issued and outstanding common stock.

The Company's primary businesses are producing investment related
periodical publications through its wholly-owned subsidiary, Value Line
Publishing, Inc. ("VLP"), and providing investment advisory services to mutual
funds, institutions and individual clients. VLP publishes in both print and
electronic formats The Value Line Investment Survey(TM), one of the nation's
major periodical investment services, as well as The Value Line Investment
Survey - Expanded Edition, The Value Line Investment Survey - Condensed Edition,
Value Line Select, The Value Line Mutual Fund Survey, The Value Line No-Load
Fund Advisor, The Value Line Special Situations Service, The Value Line Options
Survey and The Value Line Convertibles Survey. VLP also provides current and
historical financial databases (DataFile, Estimates & Projections, Convertibles,
Mutual Funds and other services) in standard computer formats and markets
investment analysis software, The Value Line Investment Survey FOR WINDOWS(R),
The Mutual Fund Survey FOR WINDOWS(R), Value Line Daily Options Survey and Value
Line Electronic Convertibles. These electronic products are available on CD-Rom
and offered directly on the Company's internet site, WWW.VALUELINE.COM. The
Company's print and electronic services are marketed through media, direct mail
and the internet to retail and institutional investors.

The Company is the investment adviser for the Value Line Family of Mutual
Funds, which on April 30, 2001, included 15 open-end investment companies with
various investment objectives. In addition, the Company manages investments for
private and institutional clients. The Company is registered with the Securities
and Exchange Commission as an investment adviser under the Investment Advisers
Act of 1940.

In addition to VLP, the Company's other wholly-owned subsidiaries include
a registered broker-dealer, Value Line Securities, Inc., and an advertising
agency, Vanderbilt Advertising Agency, Inc. These subsidiaries primarily provide
services used by the Company in its investment management and publishing
businesses. Compupower Corporation, another subsidiary, serves the subscription
fulfillment needs of the Company's publishing operations. Value Line
Distribution Center, Inc. ("VLDC") handles all of the mailings of the
publications to the Company's subscribers. Additionally, VLDC provides office
space for Compupower Corporation's computer operations center. The name "Value
Line," as used to describe the Company, its products, and its subsidiaries, is a
registered trademark of the Company. As used herein, except as the context
otherwise requires, the term "Company" includes the Company and its consolidated
subsidiaries.

A. Investment Information and Publications.

VLP publishes investment related publications and produces electronic
products described below:

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l. Publications:

The Value Line Investment Survey is a weekly investment related periodical
that in addition to various timely articles on current economic, financial and
investment matters ranks common stocks for future relative performance based on
computer-generated statistics of financial results and stock market performance.
Two of the more important evaluations for each stock covered are
"Timeliness(TM)" and "Safety (TM)." "Timeliness(TM)" relates to the probable
relative price performance of a stock over the next six to twelve months, as
compared to the rest of the approximately 1,700 covered stocks. Rankings are
updated each week and range from Rank 1 for the expected best performing stocks
to Rank 5 for the expected poorest performers. "Safety" rankings are a measure
of risk and are based primarily on the issuer's relative financial strength and
its stock's price stability. "Safety" ranges from Rank 1 for the least risky
stocks to Rank 5 for the riskiest. VLP employs approximately 100 analysts and
statisticians who prepare articles of interest for each periodical and who
evaluate stock performance and provide future earnings estimates and quarterly
written evaluations with weekly updates when relevant.

The Expanded Edition of The Value Line Investment Survey is a weekly
publication, introduced in 1995, that provides detailed descriptions of
approximately 1,800 additional small-and medium-capitalization stocks, many
listed on NASDAQ, beyond the 1,700 stocks of larger-capitalization companies
traditionally covered in The Value Line Investment Survey. Like The Value
Line Investment Survey, the Expanded Edition has its own "Summary & Index"
providing updated performance ranks and other data, as well as "screens" of
key financial performance measures. The "Ratings and Reports" section,
providing updated reports on about 140 stocks each week, has been organized
to correspond closely to the industries reviewed in the Standard Edition of
The Value Line Investment Survey. A combined Index, published quarterly,
allows the subscriber to easily locate a specific stock among the
approximately 3,500 stocks covered.

The Expanded Edition includes a number of unique as well as standard
features. One unique feature, The Performance Ranking System incorporates many
of the elements of the Value Line Timeliness(TM) Ranking System, modified to
accommodate the 1,800 stocks in the Expanded Edition. The Performance(TM) Rank
is based on earnings growth and price momentum and is designed to predict
relative price performance over the next six to 12 months.

The principal difference between the Expanded Edition and The Value Line
Investment Survey's Standard Edition is that the Expanded Edition does not
include Value Line's financial forecasts or analysts' comments. This
modification has allowed VLP to offer this service at a relatively low price.

The Value Line Mutual Fund Survey is a bi-weekly publication introduced
in 1993, that provides full-page profiles of 1,500 mutual funds and condensed
coverage of an additional 500 funds. Every two weeks subscribers receive an
updated issue, containing about 150 fund reports, plus a "Performance &
Index" providing current rankings and performance figures for the full
universe of more than 2,000 funds, as well as articles on investment trends
and issues concerning mutual fund investors. The Value

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Line Mutual Fund Survey also includes semi-annual profiles and analyses on 100
of the nation's major fund families. Funds are ranked for both risk and overall
risk-adjusted performance using strictly quantitative means. A large binder is
provided to house the fund reports.

The Value Line No-Load Fund Advisor is a periodical monthly newsletter for
investors who wish to manage their own portfolios of no- and low-load, open-end
mutual funds. Each issue features strategies for maximizing total return, with
special attention given to tax considerations. Also featured are in-depth
interviews with noted portfolio managers, model portfolios for a range of
investor profiles, and information about retirement planning, industry news, and
listings (with descriptions) of new funds worthy of further consideration. A
full statistical review, including latest performance, rankings and sector
weightings, is updated each month on 600 leading no-load and low-load funds.

The Value Line Special Situations Service, published periodically 24 times
a year, concentrates on fast-growing, smaller companies whose stocks are
perceived by VLP analysts as having exceptional appreciation potential.

The Value Line Options Survey, a periodical weekly service published 24
times a year, evaluates and ranks the expected performance of the most active
options listed on United States exchanges (approximately 10,000). An
electronic version of this publication, The Value Line Daily Options Survey
(available over the Internet), was introduced during the latter part of
fiscal 1995. A new enhanced version was introduced in May of 2001 on our
website at www.valueline.com. The new features consist of an interactive
database, new spreadsheets and over 25,000 options covered.

The Value Line Convertibles Survey, a periodical service published 48
times a year, evaluates and ranks for future market performance approximately
600 convertible securities (bonds and preferred stocks) and approximately 120
warrants.

Value Line Select, a monthly publication, was first published in January
1998. As a stock recommendation service with an exclusive circulation, it
focuses each month on one company that VLP analysts, economists and
statisticians recommend as an investment. Recommendations are backed by
in-depth research and subject to ongoing monitoring.

The Value Line Investment Survey - Condensed Edition is a monthly service,
which contains full-page reports on more than 600 stocks. Its reports provide
information on many actively traded, larger capitalization issues as well as
some smaller growth stocks. Since it was introduced in fiscal 1996, it has
proven to be very popular among investors who want the same type of analysis
provided in the full Investment Survey, but who don't want or need coverage of
the large number of companies contained in that publication. Readers also
receive supplemental reports as well as a monthly Index, which includes updated
statistics.

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2. Electronic Products:

Value Line Investment Survey FOR WINDOWS(R), a weekly publication, is a
powerful menu-driven software program with fast filtering, ranking, reporting
and graphing capabilities by utilizing almost 300 data fields on over 6,000
stocks, industries and indices, including the 1,700 stocks covered in VLP's
benchmark publication, The Value Line Investment Survey. The product was
introduced in June 1996. Version 3.0 of the product was released in April of
2000 with major enhancements to the user interface and the ability for users
to update data from our internet site (www.valueline.com). New features are
added continuously. Since the latter part of 1998, customers can view and
print the proprietary page format directly through the Website.

Value Line Investment Survey FOR WINDOWS(R) provides over 250 search
fields , more than 100 charting and graphing variables for comparative research,
and 10 years of historical financial data for scrutinizing performance, risk and
yield. The software includes a portfolio module that lets users create and track
their own stock portfolios. In addition to containing digital replicas of the
entire Value Line Investment Survey, the program includes up-to the-minute data
updates through its seemless integration with the Value Line website
(www.valueline.com). This product is available on CD-ROM or directly through
the internet site at www.valueline.com.

A Special Plus Stock Edition, a weekly publication is a powerful yet
economical professional tool on CD-ROM, is distributed on a monthly basis
with daily internet updates. The Plus Edition contains full financial and
business descriptions on over 6,000 stocks and industries providing over 350
data fields.

Both versions are compatible with Windows 2000, 98, NT 4.X, and 95.

Value Line Mutual Fund Survey FOR WINDOWS(R), a bi-weekly publication, is
the electronic version of the Value Line Mutual Fund Survey. The program
features powerful sorting, filtering and portfolio analysis. Version 2 was
introduced in 1998, with added features such as style attribution analysis,
portfolio stress tester, portfolio rebalancing, correlation of fund returns,
manager bios and photos and hypothetical assets to differentiate us from the
competition.

Windows is a registered trademark of Microsoft Corp. Value Line, Inc. and
Microsoft Corp. are not affiliated companies.

Value Line DataFile contains current and historic annual and quarterly
financial records for more than 6,000 companies in numerous industries,
including air transport, industrial services, beverage, machinery, bank,
insurance and finance, savings and loan associations, toys, and securities
brokers. DataFile has over 400 annual and over 80 quarterly fields for each
of the companies in the database. DataFile is sold to the institutional
market. Value Line Data File II, which includes less historical data is also
available. This version complies with Microsoft Access format for small
businesses. During fiscal 1997, Value Line introduced the Value Line Mutual
Fund Data File. We cover over 11,000 mutual funds with 20 years of historical
data which consists of almost 200 data fields. VLP also offers an Estimates
and Projections File, with year-ahead and three- to five-year estimates of
financial performance and projections of stock-price ranges, as well as a
Convertible Securities File and custom services.

5

The Total Return Service is a customized data service. It was developed to
help publicly traded companies meet the SEC's mandated executive-compensation
disclosure requirements. The service consists of a line graph comparing the
total return of a public company's stock over the last five years to a published
equity market index and a published or constructed industry index.

Technological initiatives to automate and upgrade data information
systems are currently underway. This project will increase the number of
stocks in the various Value Line publications to include all U.S. company
stocks covered on the major exchanges, and decrease the amount of time it
takes to input new company data.

3. Value Line Internet:

Most Value Line products and services are available from the company's
Website www.valueline.com. The site includes a multimedia section that features
daily market reports and updates on stocks, options, mutual funds and
convertibles as well as Webcasting of daily analyst commentary and fast-breaking
developments on companies in the news. In addition, Value Line has added a host
of new tools to chart and filter stocks and mutual funds along with tools to
build a portfolio, customize a report and receive Value Line reports.

A new Internet-only service, the Value Line Research Center, includes
on-line access to Value Line's leading publications covering stocks, mutual
funds, options and convertible securities as well as special situation stocks.
This service includes full subscriptions to The Value Line Investment Survey,
The Value Line Mutual Fund Survey, The Value Line Daily Options Survey, The
Value Line Investment Survey Expanded Edition, The Value Line Convertibles
Survey and The Special Situation Survey.

B. Investment Management.

As of April 30, 2001, the Company was the investment adviser for 15 mutual
funds registered under the Investment Company Act of 1940. Value Line
Securities, Inc., a wholly owned subsidiary of the Company, underwrites and
distributes shares of the Value Line Funds. State Street Bank and Trust Company,
an unaffiliated entity, acts as custodian of the Funds' assets. Shareholder
services for the Value Line Funds are provided by National Financial Data
Services, an unaffiliated entity associated with State Street Bank and Trust
Company.

6

Total net assets of the Value Line Funds at April 30, 2001, were:

(in thousands)

The Value Line Fund, Inc. $ 347,860
Value Line Income and Growth Fund, Inc. 203,598
The Value Line Special Situations Fund, Inc. 333,627
Value Line Leveraged Growth Investors, Inc. 552,768
The Value Line Cash Fund, Inc. 409,236
Value Line U.S. Government Securities Fund, Inc. 143,423
Value Line Centurion Fund, Inc. 628,560
The Value Line Tax Exempt Fund, Inc. 165,996
Value Line Convertible Fund, Inc. 67,258
Value Line Aggressive Income Trust 83,023
Value Line New York Tax Exempt Trust 28,724
Value Line Strategic Asset Management Trust 1,315,227
Value Line Emerging Opportunities Fund, Inc. 43,119
Value Line Asset Allocation Fund, Inc. 290,829
Value Line U.S. Multinational Company Fund, Inc. 30,978
----------
$4,644,226
==========

The investment advisory contracts between each of the Value Line Funds and
the Company provide that the Company will render investment research, advice,
and supervision to the funds. These contracts must be approved annually in
accordance with statutory procedures. The Company furnishes each fund with its
investment program, subject to such fund's fundamental investment policies and
to control and review by such fund's Board of Directors or Trustees. Each
contract also provides that the Company will furnish, at its expense, various
administrative services, office space, equipment and administrative personnel
necessary for managing the affairs of the funds. Advisory fee rates vary among
the funds and may be subject to certain limitations. Each mutual fund may use
"Value Line" in its name only so long as the Company acts as its investment
adviser.

Value Line Asset Management ("VLAM"), a division of the Company, manages
pension funds and institutional and individual portfolios by utilizing the
techniques developed for The Value Line Investment Survey. VLAM has varied
investment advisory agreements with its clients which call for payments to the
Company calculated on the basis of the market value of the securities portfolio
under management.

C. Wholly-Owned Operating Subsidiaries.

1. Vanderbilt Advertising Agency, Inc.:

Vanderbilt Advertising Agency, Inc. ("Vanderbilt") places advertising for
the Company's publications, investment advisory services, and mutual funds.
Commission income generated by Vanderbilt serves to reduce the Company's
advertising expenses.

7

2. Compupower Corporation:

Compupower provides computerized subscription fulfillment services for the
Company as well as subscriber relations services for Company publications.
Additionally, Compupower also provides microfiche and imaging services to Value
Line, its affiliates and third-party customers.

3. Value Line Securities, Inc.:

Value Line Securities, Inc. ("VLS") is registered as a broker-dealer under
the Securities Exchange Act of 1934 and is a member of the National Association
of Securities Dealers, Inc. VLS acts as the underwriter and distributor of the
Value Line Funds. Shares of the Value Line Funds are sold to the public without
a sales charge (i.e., on a "no-load" basis). Since 1986, VLS has effected
brokerage transactions in exchange-listed securities for certain of the Value
Line Funds, clearing such transactions on a fully disclosed basis through
unaffiliated broker-dealers who receive a portion of the gross commissions.
During the past two fiscal years, the Company received service and distribution
fees, pursuant to SEC rule 12B-1 from certain Value Line Funds which were used
to offset marketing and distribution costs for these funds.

4. Value Line Distribution Center, Inc.:

Value Line Distribution Center, Inc. ("VLDC") handles all of the mailings
of the publications to the Company's subscribers. Additionally, VLDC provides
office space for the Compupower Corporation's subscriber relations and data
processing departments.

D. Other Businesses.

The Company publishes the Value Line Arithmetic Composite and the Value
Line Geometric Composite, daily indices of the stock market performance of the
approximately 1,700 common stocks contained in The Value Line Investment Survey.
The calculation of both indices is done by a firm unaffiliated with the Company.
Futures contracts based upon fluctuations in the Value Line Arithmetic Composite
are traded on the Kansas City Board of Trade, and options on the Index are
traded on the Philadelphia Stock Exchange. The Company receives fees in
connection with these activities.

THE VALUE LINE STRATEGY TRUST SERIES I:

During the past year the Company licensed certain trademarks and
proprietary information for a new series of "unit investment trusts", THE VALUE
LINE STRATEGY TRUST SERIES I. The fundamental strategy for this Trust and future
Trusts in this series is to invest in the 100 Rank #1 stocks and maintain a
static portfolio position in these 100 stocks for a fourteen-month period. At
the end of the fourteen months the portfolio will be liquidated and the
investors will be invited to reinvest their distribution in the next available
VALUE LINE STRATEGY TRUST SERIES . Ranson, the underwriter of the UITs, says
it intends to introduce a new UIT Series every two months. These unit
investment trusts are sold by an extensive network of brokerage firms and
provide publicity for the ranking system within the brokerage industry. As of
June 18, 2001, a total asset value of approximately $40,000,000 has been
invested in these series trusts.

8

VALUE LINE TARGET 25 PORTFOLIO: The fundamental strategy for this Trust and
future Trusts in this series is to invest in a selected 25 stocks of the 100
Rank #1 stocks and maintain a static portfolio position in these 25 stocks
for a thirteen-month period. At the end of the thirteen months the portfolio
will be liquidated and the investors will be invited to reinvest their
distribution in the next available VALUE LINE TARGET 25 PORTFOLIO. Nike
Securities, the underwriter of this UIT, says it intends to introduce a new
UIT series every month. These unit investment trusts are sold by an extensive
network of brokerage firms and provide a unique exposure for the ranking
system within the brokerage industry. As of June 18, 2001, aggregate assets
of over $140,000,000 have been invested in these series trusts.

ENHANCED INDEX PORTFOLIO: The Enhanced Index Portfolio offered by Nike
Securities, uses the same investment strategy as the Value Line Target 25
Portfolio except that the Enhanced Index Portfolio maintains a static investment
position for a period of fifteen months. The fundamental difference is that this
portfolio only places one-third of its assets into the Value Line Target 25
portfolio strategy. (The other two-thirds of the assets use a Dow Jones Index
and the Nasdaq 100 Index strategy). As of June 18, 2001, aggregate assets of
over $15,000,000 have been invested in the Value Line Target 25 Portfolio via
this trust.

VALUE LINE 100 #1 RANKED PORTFOLIO: The fundamental strategy of this Trust
offered by both Nike and Ranson is to invest in the 100 Value Line Rank #1
stocks and maintain a static portfolio position in these stocks for a period
up to fifteen months. As of June 18, 2001, aggregate assets of $10,000,000
have been invested in these trusts.

E. Investments.

The Company invests in the Value Line Funds and in other marketable
securities.

F. Employees.

At April 30, 2001, the Company and its subsidiaries employed 291 people.

The Company, its affiliates, officers, directors and employees may from
time to time own securities which are also held in the portfolios of the Value
Line Funds or recommended in the Company's publications. The Company has imposed
rules upon itself and such people requiring monthly reports of securities
transactions for their respective accounts and restricting trading in various
types of securities in order to avoid possible conflicts of interest.

G. Assets.

The Company's assets identifiable to each of its principal business
segments were as follows:

9

H. Competition.

The investment management, and the investment information and publications
industries are very competitive. There are many competing firms and a wide
variety of product offerings. Some of the firms in these industries are
substantially larger and have greater financial resources than the Company. The
Company believes that it is one of the world's largest independent securities
research organizations and that it publishes one of the world's largest
investment periodicals service in terms of number of subscriptions, annual
revenues and number of equity research analysts.

I. Executive Officers.

The following table lists the names, ages (at June 18, 2001), and
principal occupations and employment during the past five years of the Company's
Executive Officers. All officers are elected to terms of office for one year.
Each of the following has held an executive position with the companies
indicated for at least five years.

Item 2. PROPERTIES.

On June 4, 1993, the Company entered into a lease agreement for
approximately 77,000 square feet that provided for the relocation of its office
space to 220 East 42nd Street, New York, New York. On September 14, 2000, the
Company amended its New York lease for office space and returned to the landlord
6,049 sq. ft. of excess capacity. The Company now leases approximately 71,000
square feet of office space at 220 East 42nd Street in New York. During January
1996, a subsidiary of the Company purchased for cash an approximately 85,000
square feet warehouse facility for $4,100,000. The new facility has consolidated
into a single location the distribution operations for the various Company
publications and the fulfillment operations of Compupower Corporation. The
remaining building capacity provides warehouse space, a disaster

10

recovery site and will provide for future business expansion. The Company
believes the capacity of these facilities is sufficient to meet the Company's
current and expected future requirements.

Item 3. LEGAL PROCEEDINGS.

There are no material pending legal proceedings.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No matters were submitted to a vote of the stockholders during the fourth
quarter of the fiscal year ended April 30, 2001.

Part II

Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.

The Registrant's Common Stock is traded on the over-the-counter market.
The approximate number of record holders of the Registrant's Common Stock at
April 30, 2001 was 1,268. Over-the-counter price quotations reflect inter-dealer
prices, without retail mark-up, mark-down or commission and may not necessarily
represent actual transactions. The range of the bid and asked quotations and the
dividends paid on these shares during the past two fiscal years were as follows:

11

Item 6. SELECTED FINANCIAL DATA.

Earnings per share for each of the fiscal years shown below are based on
the weighted average number of shares outstanding.

12

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

FISCAL 2001

OPERATING RESULTS

Revenues of $98,391,000 for the twelve months of fiscal year 2001 set a
new record high for the Company and exceeded last year's revenues by 2%.
Operating income of $37,811,000 for the twelve months ended April 30, 2001,
ranked third highest in the Company's history and was 4% higher than operating
income of $36,428,000 for the same period of last fiscal year. Net income for
the twelve months ended April 30, 2001 of $24,091,000, or $2.41 per share, was
below the prior year's net income of $33,698,000, or $3.38 per share due to
lower income from securities transactions that resulted from a falling equity
market and tax advantaged sales from the Company's long-term securities holdings
and trading portfolio during the fiscal year. Without the tax selling, earnings
per share would have been $2.98 for fiscal 2001. However, this strategy saved
the Company nearly $4,000,000 in current income tax payments.

Subscription revenues of $56,042,000 for fiscal 2001 compare to revenues
of $58,857,000 during the prior fiscal year. The decrease in subscription
revenues compared to the prior year is due primarily to a 6% net decrease in
revenues from THE VALUE LINE INVESTMENT SURVEY. This decrease was partially
offset by increases in revenues from related products including THE VALUE LINE
INVESTMENT SURVEY ON THE WEB and VALUE LINE SELECT. The decrease in publication
revenues resulted in part from reduced levels of advertising during the first
half of the prior fiscal year that occurred while the Company had been in the
process of revising its advertising strategy. Additionally, the availability of
free or low cost data on the Internet is believed to have had a negative impact
on revenue growth. Extremely difficult market conditions facing investors
throughout the fiscal year has also restrained demand for the Company's
investment publications. Investment management fees and services revenues of
$42,349,000 for the twelve months ended April 30, 2001, were 13% above the prior
fiscal year's revenues. Effective July 1, 2000, the Company received service and
distribution fees under rule 12b-1 of the Investment Company Act of 1940 from
thirteen of the fifteen Value Line mutual funds. The increase in revenues from
investment management fees and services, compared to the prior year, resulted
primarily from the receipt of higher service and distribution fees from the
Value Line Mutual Funds. Average assets under management in the Company's mutual
funds were 2% lower than the prior year's average net assets.

Operating expenses for the twelve months ended April 30, 2001 of
$60,580,000 were well controlled, and only 1% higher than last year's expenses
of $59,814,000. Although cost components for our direct mail campaigns such as
paper and postage, and media advertising rates have risen between 5% and 10%,
total company-wide advertising and promotional expenses of $21,342,000 were 1%
below the prior year's expenses of $21,629,000. Advertising for the Company's
publications decreased $2,476,000, primarily resulting from fewer television and
media advertisements. Additionally, last year's advertising included $953,000 of
expenses related to the employment of an outside advertising agency to promote
the Company's products. Advertising expenses for the Value Line mutual funds
increased $1,885,000. Salaries and employee benefit expenses of $22,728,000

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were 1% below expenses of $22,986,000 recorded in the prior fiscal year.
Production and distribution costs for the twelve months of fiscal 2001 of
$8,058,000 were 18% above expenses of $6,809,000 for the twelve months ended
April 30, 2000. The increase in production expenses resulted from the
amortization of new product development costs for THE VALUE LINE INVESTMENT
SURVEY FOR WINDOWS Version 3 and Version 2 of the Company's Website, expenses
associated with outsourcing a portion of the Company's stock and mutual fund
data collection services and amortization of previously deferred costs for
the development of computer software for internal use based on new accounting
methodology promulgated by the Financial Accounting Standards Board. These
increases were partly offset by lower production and distribution expenses
related to lower production runs for print publications. Office and
administration expenses of $8,452,000 were 1% higher than last year's
expenses of $8,390,000.

The Company's securities portfolios produced income of $3,118,000 for the
twelve months ended April 30, 2001 compared to income of $18,504,000 during last
fiscal year. The steady decline in the valuation of securities that started at
the beginning of fiscal year 2001 and accelerated dramatically during the third
quarter, with the NASDAQ index falling 47% during fiscal year 2001, resulted in
trading losses of $5,471,000 during the twelve months ended April 30, 2001,
versus a gain of $3,862,000 during the same period of last fiscal year. In light
of the decline in the equity markets and as part of Value Line's tax and
investment strategy, the Company realigned certain of its long term securities
holdings and trading securities which resulted in the recognition of
approximately $9,500,000 in capital losses that mostly offset previously
recognized capital gains. This tax strategy succeeded in reducing the Company's
federal, state and city income taxes by almost $4,000,000. Dividend income from
the Company's investments in the Value Line mutual funds increased 29% from
fiscal 2000.

LIQUIDITY AND CAPITAL RESOURCES

The Company had liquid resources, which are used in its business, of
$246,697,000 at April 30, 2001. In addition to $97,913,000 of working capital,
the Company had long-term securities available for sale with a market value of
$148,784,000, that, although classified as non-current assets, are also readily
marketable should the need arise.

The Company's cash flow from operations of $25,648,000 for the twelve
months ended April 30, 2001 was 31% higher than fiscal 2000's cash flow of
$19,637,000. The increase was primarily due to the tax savings strategy employed
by the Company after the substantial decline in the financial markets and from
the higher level of operating income that resulted from record high revenues.
Net cash inflows from investing activities during the twelve months of fiscal
2001 were $26,365,000 higher than net cash outflows for the twelve months of
fiscal 2000 due largely to the Company's decision to realign its long-term
securities holdings and trading portfolio in accordance with it's tax and
investment strategies.

Management believes that the Company's cash and other liquid asset
resources used in its business together with the future cash flows from
operations will be sufficient to finance current and forecasted operations.
Management anticipates no borrowing for fiscal year 2002.

14

FISCAL 2000

OPERATING RESULTS

Net income for the twelve months ended April 30, 2000 of $33,698,000, or
$3.38 per share ranked fourth highest in Value Line's history and was 24% higher
than the prior year's net income of $27,172,000, or $2.72 per share. Revenues of
$96,242,000 for fiscal year 2000, the highest in Value Line's history, were
$424,000 higher than the prior year's revenues of $95,818,000. Operating income
of $36,428,000 for the twelve months ended April 30, 2000, was the third highest
in the history of the Company and 8% lower than operating income of $39,436,000
for the same period of last fiscal year. The decrease from last fiscal year's
operating income is due largely to $3,458,000 of additional advertising expenses
related to selling arrangements for the Value Line mutual funds and expenses
related to the engagement of an outside advertising agency for the Company's
publication business. Additionally, both revenues and operating income for last
fiscal year include a gain of $518,000 from the sale of the vacant North Bergen,
New Jersey operating facility.

Total assets of $298,198,000 at April 30, 2000 increased 22% from the
balance at April 30, 1999.

Subscription revenues of $58,857,000 were 5% below revenues from the prior
fiscal year. The decrease in subscription revenues compared to the prior year is
due primarily to a 5% net decrease in revenues from THE VALUE LINE INVESTMENT
SURVEY and related products, which includes THE VALUE LINE INVESTMENT SURVEY FOR
WINDOWS, CONDENSED, EXPANDED EDITION AND VALUE LINE SELECT. The decrease in
publication revenues is largely a result of the reduced level of advertising
that occurred while the Company has been in the process of revising its
advertising strategy. Additionally, the availability of free or low cost data on
the Internet has also had a negative impact on revenue growth. The decline in
revenues from THE VALUE LINE INVESTMENT SURVEY was offset in part by increased
revenues from THE VALUE LINE INVESTMENT SURVEY FOR WINDOWS, THE VALUE LINE
INVESTMENT SURVEY - CONDENSED EDITION and VALUE LINE SELECT products. Investment
management fees and services revenues of $37,385,000 for fiscal 2000, a new
record high for the Company for any fiscal year, were $4,305,000, or 13%, above
the prior year's revenues. The higher revenues from investment management fees
and services, compared to the prior year, resulted primarily from the increase
in the year-over-year average net assets under management in the Company's
mutual funds. Reduced revenues from individually managed asset accounts
partially offset the increased revenues from the Company's mutual funds. Assets
under management in the Company's mutual funds at April 30, 2000 increased 20%
from the level at April 30, 1999.

Operating expenses for the twelve months ended April 30, 2000 of
$59,814,000 were 6% above last year's expenses of $56,382,000. Total
company-wide advertising and promotional expenses of $21,629,000 were 25% above
the prior year's expenses. When compared to the prior year, savings from the
planned reduction of television advertising through April 30, 2000 were offset
by the increase in expenses relating to a selling arrangement for two of the
Company's equity mutual funds and increased promotional fees to discount brokers
based on higher invested assets in the Value Line mutual funds. Additionally,
the Company engaged an outside advertising agency to promote its products that
failed to produce the expected results. Salaries and employee benefit expenses
of $22,986,000 were less than 1% above expenses of $22,950,000 recorded in the
prior fiscal year. The stable level of salaries and benefits resulted primarily
from savings in employee benefits and related expenses and staff reductions in
the Asset Management, Purchasing and Y2K divisions and the outsourcing of the

15

Customer Service division at the Compupower Corporation. Production and
distribution costs of $6,809,000 were 9% below expenses of $7,454,000 for the
twelve months ended April 30, 1999. The lower expenses resulted from a
decrease in maintenance and production expenses related to the Company's
web-site and a decline in paper, printing and distribution expenses that were
directly related to lower production runs for print publications. Office and
administration expenses of $8,390,000 were 3% below last year's expenses of
$8,648,000. The decline in administrative expenses from last year is the
result of reduced professional fees, telecommunication charges and
depreciation expenses. Administrative expenses for fiscal 2000 have been
reduced by $275,000 that resulted from the favorable resolution of two
litigations in which the Company was the plaintiff. Additional administrative
costs in fiscal year 2000 include expenses related to the amortization of
capitalized employee salaries and fringe benefit expenses for Value Line
software programmers associated with the adoption in the latter half of
fiscal year 1999 of SOP 98-1 "Accounting for the Costs of Computer Software
Developed for Internal Use". The new SOP 98-1 requires the Company to defer
the internal costs of developing and enhancing various computer software
programs such as those associated with the Internet site, version 3 of the
Value Line Investment Survey for Windows and other products.

The Company's securities portfolios produced income of $18,504,000 for the
twelve months ended April 30, 2000, an increase of $13,311,000 over last year's
income of $5,193,000. This was primarily due to an increase of $8,106,000 in
capital gain distributions from the Value Line mutual funds, an additional
$3,725,000 in capital gains from the Company's trading portfolio and an increase
of $959,000 in dividend income. The strong performance of the Value Line equity
mutual funds and trading portfolios in an overall favorable market environment
during fiscal 2000 was mainly responsible for the increase in income from
securities transactions.

Liquidity and Capital Resources

The Company had liquid resources, which are used in its business, of
$271,494,000 at April 30, 2000. In addition to $61,026,000 of working capital,
the Company had long-term securities available for sale with a market value of
$210,468,000, that, although classified as non-current assets, are also readily
marketable should the need arise.

The Company's cash flow from operations of $19,637,000 for the fiscal year
ended April 30, 2000 was lower than fiscal 1999's cash flow of $26,130,000. This
was primarily due to the higher volume of prepayments for subscriptions during
fiscal 1999, and the timing of payments during fiscal 2000 of certain
promotional costs. Net cash outflows for investing activities during fiscal 2000
were $711,000 lower than fiscal 1999's outflows primarily due to a decrease in
trading activity in the Company's trading and long-term securities partially
offset by increased expenditures for capitalized software.

Year 2000 (Y2K):

During the Y2K rollover, the Company's systems and those of its third
party critical vendors performed without any problems. Value Line continued all
operations without any Y2K related issues, both internally and externally
including the use of the Company's products by its clients. The effective
transition was the result of Value Line's extensive year 2000 planning.

16

The Company's expenditures for the Y2K project to ensure our computers
could handle the date 2000 were $509,000, $732,000, and $251,000 during
fiscal years 2000, 1999 and 1998, respectively. These expenditures include
new software and hardware, allocation of staff time, temporary assistance for
clerical tasks, legal counsel, testing tools and external, third-party
monitoring of the Company's Y2K implementation plan.

Management believes that the Company's cash and other liquid asset
resources used in its business together with the future cash flows from
operations will be sufficient to finance current and forecasted operations.
Management anticipates no borrowing for fiscal year 2001.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The following consolidated financial statements of the registrant and its
subsidiaries are included as a part of this Form 10K:

Quarterly Results (Unaudited):
(in thousands, except per share amounts)

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.

There have been no disagreements with the independent accountants on
accounting and financial disclosure matters.

Part III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

Information required by this item will be filed as an amendment to this
Form 10-K.

Item 11. EXECUTIVE COMPENSATION.

Information required by this item will be filed as an amendment to this
Form 10-K.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.

Information required by this item will be filed as an amendment to this
Form 10-K.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Information required by this item will be filed as an amendment to this
Form 10-K.

18

Part IV

Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8-K.

(a) 1. Financial Statements
See Item 8.

2. Schedules
Schedule I - Marketable Securities.
Schedule XIII - Other Investments. (Reg. S-X, Article 5)

All other Schedules are omitted because they are not applicable or the
required information is shown in the financial statements or notes
thereto.

3. Exhibits

3.1 Articles of Incorporation of the Company, as amended through
April 17, 1983 are Incorporated by reference to the
Registration Statement - Form S-1 of Value Line, Inc. Part II,
Item 16.(a) 3.1 filed with the Securities and Exchange
Commission on April 7, 1983.
3.2 Certificate of Amendment of Certificate of Incorporation dated
October 24, 1989.
10.8 Form of tax allocation arrangement between the Company and
AB&Co. incorporated by reference to the Registration Statement
- Form S-1 of Value Line, Inc. Part II, Item 16.(a) 10.8 filed
with the Securities and Exchange Commission on April 7, 1983.
10.9 Form of Servicing and Reimbursement Agreement between the
Company and AB&Co., dated as of November 1, 1982 incorporated
by reference to the Registration Statement - Form S-1 of Value
Line, Inc. Part II, Item 16.(a) 10.9 filed with the Securities
and Exchange Commission on April 7, 1983.
10.10 Value Line, Inc. Profit Sharing and Savings Plan as amended
and restated effective May 1, 1989, including amendments
through April 30, 1995, incorporated by reference to the
Annual Report on Form 10-K for the year ended April 30, 1996.
10.13 Lease for the Company's premises at 220 East 42nd Street, New
York, N.Y. incorporated by reference to the Annual Report on
Form 10-K for the year ended April 30, 1994.
21 Subsidiaries of the Registrant.

(b) Reports on Form 8-K.

None

(c) Exhibits.

21 Subsidiaries of the Registrant.

19

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report on Form 10-K for the
fiscal year ended April 30, 2001, to be signed on its behalf by the undersigned,
thereunto duly authorized.

VALUE LINE, INC.
(Registrant)

By: /s/ Jean Bernhard Buttner
Jean Bernhard Buttner
Chairman & Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.

By: /s/ Jean Bernhard Buttner
Jean Bernhard Buttner
Chairman & Chief Executive Officer

By: /s/ Stephen R. Anastasio
Stephen R. Anastasio
Principal Financial and Accounting
Officer

By: /s/ David T. Henigson
David T. Henigson
Vice President

Dated: July 30, 2001

20

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report on Form 10-K for the
fiscal year ended April 30, 2001, to be signed on its behalf by the undersigned
as Directors of the Registrant.

/s/ Jean Bernhard Buttner /s/ Howard A. Brecher
Jean Bernhard Buttner Howard A. Brecher

/s/ Harold Bernard, Jr. /s/ Samuel Eisenstadt
Harold Bernard, Jr. Samuel Eisenstadt

/s/ Marion N. Ruth /s/ David T. Henigson
Marion N. Ruth David T. Henigson

/s/ Dr. Herbert Pardes
Dr. Herbert Pardes

Dated: July 30, 2001

21

[HOROWITZ & ULLMANN, P.C. LETTERHEAD]

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors
and Shareholders of
Value Line, Inc.

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income and retained earnings, changes in
stockholders' equity, and cash flows present fairly, in all material respects,
the financial position of Value Line, Inc. and subsidiaries at April 30, 2001
and 2000, and the results of their operations, changes in stockholders' equity,
and their cash flows for each of the three years in the period ended April 30,
2001, in conformity with accounting principles generally accepted in the United
States of America. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits of these financial statements in accordance with
auditing standards generally accepted in the United States of America which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.

Our audits of the consolidated financial statements referred to above also
included an audit of the Financial Statement Schedules listed in item 14 (a) of
Form 10-K. In our opinion, these Financial Statement Schedules present fairly,
in all material respects, the information set forth therein when read in
conjunction with the related consolidated statements.

/s/ Horowitz & Ullmann, P.C.

July 12, 2001

22

Value Line, Inc.
Consolidated Balance Sheets
(in thousands, except share amounts)

See independent auditor's report and accompanying notes to financial statements.

23

Value Line, Inc.
Consolidated Statements of Income and Retained Earnings
(in thousands, except per share amounts)

See independent auditor's report and accompanying notes to financial statements.

24

Value Line, Inc.
Consolidated Statements of Cash Flows
(in thousands)

See independent auditor's report and accompanying notes to financial statements.

25

VALUE LINE, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE THREE YEARS ENDED APRIL 30, 2001, 2000 AND 1999
(in thousands, except share amounts)

See independent auditor's report and accompanying notes to financial statements.

26

VALUE LINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1-ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Value Line, Inc. (the "Company") is incorporated in New York State and carries
on the investment periodicals and related publications and investment management
activities formerly performed by Arnold Bernhard & Co., Inc. (the "Parent")
which owns approximately 86% of the issued and outstanding common stock of the
Company.

Principles of consolidation: The consolidated financial statements include the
accounts of the Company and all of its subsidiaries. All significant
intercompany accounts and transactions have been eliminated in consolidation.

Revenue recognition: Subscription revenues are recognized ratably over the
terms of the subscriptions. Accordingly, the amount of subscription fees to be
earned by servicing subscriptions after the date of the balance sheet is shown
as unearned revenue. The unearned revenue shown on the balance sheet is a
noncurrent deferred credit. This classification recognizes that the fulfillment
of this commitment will require the use of significantly fewer current assets
than the amount of the unearned revenues and, accordingly, combining it with
current liabilities would significantly understate the liquidity position of the
Company.

Investment management fees are recorded as revenue as the related services are
performed.

Valuation of Securities: The Company accounts for the valuation of its
securities holdings in accordance with the provisions of Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt and
Equity Securities". Its long-term securities portfolio, which consists of shares
of the Value Line Mutual Funds is classified as available for sale and valued at
market. Unrealized gains and losses on these securities are reported, net of
applicable taxes, as a separate component of Shareholders' Equity. Realized
gains and losses on sales of the securities are recorded in earnings on trade
date and are determined on the identified cost method.

Trading securities held by the Company are valued at market with unrealized
gains and losses included in earnings.

Goodwill: Goodwill represents the excess of the purchase price over the fair
value of net assets acquired and is being amortized over a period of 14 years.

27

VALUE LINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Advertising expenses: The Company expenses advertising costs as incurred.

Earnings per share: Earnings per share are based on the weighted average
number of shares of common stock and common stock equivalents outstanding during
each year.

Cash and Cash Equivalents: For purposes of the Consolidated Statements of Cash
Flows, the Company considers all cash held at banks and short term liquid
investments with an original maturity of less than three months to be cash and
cash equivalents. As of April 30, 2001 and 2000, cash equivalents included
$86,011,000 and $46,726,000, respectively, invested in the Value Line money
market funds.

Use of Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.

NOTE 2-SUPPLEMENTARY CASH FLOW INFORMATION:

Cash payments for income taxes were $17,561,000, $20,713,000,and $15,712,000,
in fiscal 2001, 2000, and 1999, respectively. Interest payments of $6,000,
$17,000, and $86,000, were made in fiscal 2001, 2000, and 1999, respectively.

28

VALUE LINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3-RELATED PARTY TRANSACTIONS:

The Company acts as investment adviser and manager for fifteen open-ended
investment companies, the Value Line Family of Funds (see Note 4). The Company
earns investment management fees based upon the average daily net asset values
of the respective funds. Effective July 1, 2000, the Company received service
and distribution fees under rule 12b-1 of the Investment Company Act of 1940
from thirteen of the fifteen mutual funds for which Value Line is the adviser.
The Company also earns brokerage commission income, net of clearing fees, on
securities transactions executed by Value Line Securities, Inc. on behalf of the
funds that are cleared on a fully disclosed basis through non-affiliated
brokers. For the years ended April 30, 2001, 2000, and 1999, investment
management fees, service and distribution fees and brokerage commission income,
net of clearing fees, amounted to $39,296,000, $33,658,000, and $28,351,000,
respectively. These amounts include service and distribution fees of $6,366,000,
$799,000 and $480,000, respectively. The related receivables from the funds for
management advisory fees and service and distribution fees included in
Receivable from affiliates were $2,697,000, and $2,972,000 at April 30, 2001 and
2000, respectively.

For the years ended April 30, 2001, 2000, and 1999, the Company was reimbursed
$549,000, $519,000, and $496,000, respectively, for payments it made on behalf
of and services it provided to the Parent. At April 30, 2001 and 2000,
receivable from affiliates included a receivable from the Parent of $46,000 and
$44,000, respectively. For the years ended April 30, 2001, 2000, and 1999, the
Company made federal income tax payments to the Parent amounting to $14,250,000,
$17,460,000, and $12,870,000, respectively. At April 30, 2001 and 2000, accrued
taxes payable include a federal tax liability owed to the Parent in the amount
of $302,000 and $401,000, respectively. These data are in accordance with the
tax sharing arrangement described in Note 6.

29

VALUE LINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4-INVESTMENTS:

Trading Securities:

Securities held by the Company had an aggregate cost of $14,981,000 and
$15,821,000; and a market value of $15,360,000 and $19,044,000 at April 30, 2001
and 2000 respectively.

Net realized trading losses amounted to $3,143,000 during the year ended April
30, 2001. Net realized trading gains related to equity securities aggregated
$3,188,000 during fiscal 2000. Net realized trading losses amounted to $587,000
for the year ended April 30, 1999. The net change in unrealized trading losses
for the year ended April 30, 2001 were $2,842,000. The net change in unrealized
gains on trading securities for the period ended April 30, 2000 and 1999 were
$1,112,000 and $1,013,000 respectively.

Long-Term Securities Available for Sale:

The aggregate cost of the long-term securities, which are invested in the
Value Line mutual funds, was $94,579,000 and $118,135,000 and the market value
was $148,784,000 and $210,468,000 at April 30, 2001 and 2000, respectively. The
decrease in gross unrealized gains on these securities of $38,125,000, net of
the decrease in deferred taxes of $13,344,000 were included in shareholders'
equity at April 30, 2001. The increase in gross unrealized gains on these
securities of $31,144,000 and $19,651,000, net of the change in deferred taxes
of $10,900,000, and $6,878,000 were included in shareholders' equity at April
30, 2000 and 1999, respectively.

Realized capital gains from the sales of these securities were $3,907,000,
$10,748,000 and $2,157,000, during fiscal years 2001, 2000 and 1999,
respectively. The proceeds received from the sales of these securities during
the fiscal years ended April 30, 2001, 2000, and 1999 were $64,408,000,
$18,467,000 and $8,980,000, respectively.

For the years ended April 30, 2001, 2000, and 1999, income from securities
transactions also included $4,996,000, $3,871,000 and $2,912,000, of dividend
income; $34,000, $36,000 and $77,000, of interest income; and $6,000, $17,000
and $86,000, of related interest expense, respectively. Investment income for
fiscal year 2001 included gains related to derivative financial futures
contracts in the amount of $513,000, and in fiscal 2000 and 1999, losses were
$439,000 and $259,000, respectively.

30

VALUE LINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5-PROPERTY AND EQUIPMENT:

Property and equipment are carried at cost. Depreciation and amortization are
provided using the straight-line method over the estimated useful lives of the
assets, or in the case of leasehold improvements, over the remaining terms of
the leases. For income tax purposes, depreciation of furniture and equipment is
computed using accelerated methods and buildings and leasehold improvements are
depreciated over prescribed, extended tax lives.

Property and equipment consist of the following:

31

VALUE LINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6-FEDERAL, STATE AND LOCAL INCOME TAXES:

The Company computes its tax in accordance with the provisions of Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes".

The provision for income taxes includes the following:

Deferred taxes are provided for temporary differences between the financial
reporting basis and the tax basis of the Company's assets and liabilities. The
tax effect of temporary differences giving rise to the Company's deferred tax
(liability)/asset are as follows:

Included in deferred income taxes in total current assets are deferred state
and local income taxes of $109,000 and $139,000 at April 30, 2001 and 2000,
respectively. At April 30, 2001, deferred income taxes in current assets also
included $633,000 of deferred federal income taxes. At April 30, 2000 accrued
taxes payable in current liabillties included $552,000 of deferred federal
income taxes.

32

VALUE LINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The provision for income taxes differs from the amount of income tax
determined by applying the applicable U.S. statutory income tax rate to pretax
income as a result of the following:

The Company is included in the consolidated federal income tax return of the
Parent. The Company has a tax sharing arrangement which requires it to make tax
payments to the Parent equal to the Company's liability as if it filed a
separate return.

33

VALUE LINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7-EMPLOYEES' PROFIT SHARING AND SAVINGS PLAN:

Substantially all employees of the Company and its subsidiaries are members of
the Value Line, Inc. Profit Sharing and Savings Plan (the "Plan"). In general,
this is a qualified, contributory plan which provides for a discretionary annual
Company contribution which is determined by a formula based upon the salaries of
eligible employees and the amount of consolidated net operating income as
defined in the Plan. Plan expense, included in salaries and employee benefits in
the Consolidated Statements of Income and Retained Earnings, for the years ended
April 30, 2001, 2000, and 1999 was $1,180,000, $1,189,000 and $1,609,000,
respectively.

NOTE 8-INCENTIVE STOCK OPTIONS:

On April 17, 1993, the Incentive Stock Option Plan expired. On the date of
expiration, 22,550 options available for grant were cancelled. Information on
the 1983 Incentive Stock Option Plan for the three years ended April 30, 2001,
is as follows:

Options outstanding at April 30, 2001 expire at various dates through March
2003. At April 30, 2001, 2,675 of the outstanding options were exercisable. Of
the common stock held in treasury at April 30, 2001, 2,675 shares were held for
exercise of stock options.

34

VALUE LINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9-TREASURY STOCK:

Treasury stock, at cost, for the three years ended April 30, 2001, consists of
the following:

NOTE 10-LEASE COMMITMENTS:

On June 4, 1993, the Company entered into a 15 year lease agreement to provide
primary office space. The lease includes free rental periods as well as
scheduled base rent escalations over the term of the lease. The total amount of
the base rent payments is being charged to expense on the straight-line method
over the term of the lease. The Company has recorded a deferred charge on its
Consolidated Balance Sheets to reflect the excess of annual rental expense over
cash payments since inception of the lease. On September 14, 2000, the Company
amended its lease for primary office space and returned to the landlord
approximately 6,000 square feet of excess office capacity, reducing the
Company's future minimum lease payments, accordingly.

Future minimum payments, exclusive of forecasted increases in real estate
taxes and wage escalations, under operating leases for office space, with
remaining terms of one year or more, are as follows:

Rental expense for the years ended April 30, 2001, 2000 and 1999 under
operating leases covering office space was $1,446,000, $1,490,000 and
$1,505,000, respectively.

35

VALUE LINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11-BUSINESS SEGMENTS:

The Company operates two reportable business segments: Publishing and
Investment Management Services. The publishing segment produces investment
related periodicals in both print and electronic form. The investment management
segment provides advisory services to mutual funds, institutional and individual
clients as well as brokerage services for the Value Line family of mutual funds.
The segments are differentiated by the products and services they offer.

The accounting policies of the segments are the same as those described in the
summary of significant accounting policies. The Company allocates all revenues
and expenses, except for depreciation related to corporate assets, between the
two reportable segments.

Disclosure of Reportable Segment Profit and Segment Assets (in thousands)

36

VALUE LINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Reconciliation of Reportable Segment Revenues,
Operating Profit and Assets
(in thousands)

37

VALUE LINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12-NET CAPITAL:

The Company's wholly owned subsidiary, Value Line Securities, Inc. is subject
to the net capital provisions of Rule 15c3-1 under the Securities Exchange Act
of 1934, which requires the maintenance of minimum net capital of $100,000 or
one-fifteenth of aggregate indebtedness, if larger. Additionally, dividends may
only be declared if aggregate indebtedness is less than twelve times net
capital.

At April 30, 2001, the net capital, as defined of Value Line Securities, Inc.
of $14,245,000 exceeded required net capital by $13,801,000 and the ratio of
aggregate indebtedness to net capital was .47 to 1.

NOTE 13-DISCLOSURE OF CREDIT RISK OF FINANCIAL INSTRUMENTS WITH OFF BALANCE
SHEET RISK:

In the normal course of business, the Company enters into contractual
committments, principally financial futures contracts for securities indices.
Financial futures contracts provide for the delayed delivery of financial
instruments for which the seller agrees to make delivery at a specified future
date, at a specified price or yield. The contract or notional amount of these
contracts reflects the extent of involvement the Company has in these contracts.
At April 30, 2001, the Company did not have an investment in financial futures
contracts. The average fair value of the committments during fiscal 2001 was
$196,000. Risk arises from the potential inability of counterparts to meet the
terms of their contracts and from movements in securities values. The Company
limits its credit risk associated with such instruments by entering exclusively
into exchange traded futures contracts.

The Company executes, as agent, securities transactions on behalf of the
Value Line mutual funds. If the Company makes an error it will correct its
mistake and therefore may be required to discharge that obligation.

No single customer accounted for a significant portion of the Company's sales
in 2001, 2000 or 1999, nor accounts receivable for 2001 or 2000.

38

VALUE LINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14-ESTIMATED FAIR VALUE OF FINANCIAL AND DERIVATIVE INSTRUMENTS:

Statement of Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities," requires disclosure of information
regarding derivative instruments, which include financial index futures
contracts.

At April 30, 2001 and 2000, the Company held no derivative financial
instruments. Net realized trading gains related to derivative financial
instruments amounted to $513,000, and trading losses, $439,000 and $259,000, for
the years ended April 30, 2001, 2000 and 1999, respectively. Income from
securities transactions in the Statement of Income are reflected net of
derivative trading activity.

NOTE 15-COMPREHENSIVE INCOME:

During the fiscal year 1999, the Company adopted FASB statement no. 130,
Reporting Comprehensive Income. Statement no. 130 requires the reporting of
comprehensive income in addition to net income from operations. Comprehensive
income is a more inclusive financial reporting methodology that includes
disclosure of certain financial information that historically has not been
recognized in the calculation of net income.

At April 30, 2001, 2000, and 1999, the Company held long term securities
classified as available for sale. The change in valuation of these securities,
net of deferred taxes has been recorded in the Company's Consolidated Balance
Sheets. The decrease in gross unrealized gains was $38,125,000 and the change in
the related deferred taxes was $13,344,000 for the year ended April 30, 2001.
The increase in gross unrealized gains was $31,144,000 and $19,651,000 and the
change in the related deferred taxes was $10,900,000, and $6,878,000 during the
years ended April 30, 2000, and 1999, respectively.

NOTE 16-ACCOUNTING FOR THE COSTS OF COMPUTER SOFTWARE DEVELOPED FOR INTERNAL
USE:

During fiscal year 1999, the Company adopted the provisions of the Statement
of Position 98-1, (SOP 98-1), "Accounting for the Costs of Computer Software
Developed for Internal Use". SOP 98-1 is effective for tax years ending after
December 31, 1998.

The SOP 98-1 requires companies to capitalize as long-lived assets many of the
costs associated with developing or obtaining software for internal use and
amortize those costs over the software's estimated useful life in a systematic
and rational manner.

At April 30, 2001 and 2000 the Company capitalized $1,032,000, and $896,000 of
costs, net of amortization, related to the development of software for internal
use. Such costs are capitalized and amortized over the expected useful life of
the asset which is approximately 3 to 5 years. Amortization expense for the
years ended April 30, 2001, 2000 and 1999 was $703,000, $276,000 and $96,000,
respectively.

39

VALUE LINE, INC.
SCHEDULE 1-MARKETABLE SECURITIES
As of APRIL 30, 2001

40

VALUE LINE, INC.
Schedule XIII-Other Investments:4/30/2001