The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to help a reader understand Value Line, its operations and business factors. The MD&A should be read in conjunction with Item 1, Business, and in conjunction with the consolidated financial statements and the accompanying notes contained in Item 8 of this report.

The MD&A includes the following subsections:

· Executive Summary of the Business

· Results of Operations

· Liquidity and Capital Resources

· Critical Accounting Estimates and Policies

Executive Summary of the Business

The Company's primary businesses are producing investment related periodical publications and data, licensing certain Value Line trademarks and Value Line proprietary ranking system information to third parties for use in selecting securities for third party marketed products, such as unit investment trusts, closed-end fund products and exchange traded funds, and providing investment management services to the Value Line Funds and other managed accounts.

The Company's target audiences within the investment related periodical publications field are individual investors, colleges, libraries, and investment management professionals. Individuals come to Value Line for complete research in one package. Institutional subscribers, such as libraries and universities, offer the Company's detailed research to their patrons and students. Investment management professionals use the research and historical information in their day to day business.

Depending upon the product, the Company offers three months or less, annual, or multi-year subscriptions. Generally, all subscriptions are paid for in advance of fulfillment. Renewal orders are solicited primarily through a series of renewal efforts that include letters, email, and telesales efforts. New orders are generated primarily from targeted direct mail campaigns for specific products. Other sales channels used by the Company include advertising in media publications, the Internet, cross selling via telesales efforts and Internet promotions through third parties.

Institutional subscribers consist of investment management companies, colleges, and libraries. The Company has a dedicated department that solicits institutional subscriptions. Fees for institutional services are based on university or college enrollment and number of users.

Cash received for retail and institutional orders is recorded as unearned revenues until the order is fulfilled. As the subscriptions are fulfilled, the Company recognizes revenue in equal installments over the life of the particular subscription. Subscription revenues are recognized on a straight line basis over the life of the subscription. Accordingly, the amount of subscription fees to be earned by fulfilling subscriptions after the date of the balance sheet is shown as unearned revenue within current and long-term liabilities. Changes in unearned revenue generally indicate the trend for subscription revenues over the following year as the current portion of deferred revenue is expected to be recognized as revenue within 12 months.

The Company's businesses consolidate into two business segments. The investment related periodical publications (retail and institutional) and licensing of trademarks and proprietary ranking system information consolidate into one segment entitled Investment Periodicals, Publications and Licensing. The second segment consolidates the investment management services to the Value Line Funds and other managed accounts into a business segment entitled Investment Management.

The following table illustrates the key earnings figures for each of the past three years ended April 30, 2008, 2007, and 2006.

Year Ended April 30,                          2008       2007       2006        Percentage Change
(in thousands, except earnings per share)                                     08 vs 07      07 vs 06
Earnings Per Share                          $   2.56   $   2.47   $   2.35          3.6 %         5.1 %
Net Income                                  $ 25,550   $ 24,607   $ 23,439          3.8 %         5.0 %
Operating Income                            $ 34,450   $ 35,636   $ 35,180         -3.3 %         1.3 %
Income from Securities transactions, net    $  6,294   $  4,867   $  3,869         29.3 %        25.8 %

Operating revenues

Year Ended April 30, 2008 2007 2006 Percentage Change Operating revenues and % of total by

year (in thousands)                       $$          %            $$          %            $$          %           08 vs 07     07 vs 06
Investment periodicals and related
publications                           $ 42,791      51.8 %     $ 45,619      54.5 %     $ 47,703      56.0 %           -6.2 %        -4.4 %
Licensing Fees                         $  7,066       8.5 %     $  6,861       8.2 %     $  5,016       5.9 %            3.0 %        36.8 %
Investment management fees and
related services                       $ 32,821      39.7 %     $ 31,155      37.3 %     $ 32,467      38.1 %            5.3 %        -4.0 %
Total Operating Revenues               $ 82,678                 $ 83,635                 $ 85,186                         -1 %        -1.8 %

Investment periodicals and related publications revenues

The investment periodicals and related publications revenues were down $2,828,000 or 6% for the twelve months ended April 30, 2008 as compared to the twelve months ended April 30, 2007. As a percentage of total operating revenues, investment periodicals and related publications revenues have decreased from 56% at the end of fiscal year 2006 to 52% at the end of fiscal year 2008. While the Company continues to attract new subscribers through various marketing channels, primarily direct mail and the Internet, total product line circulation continues to decline. Factors that have contributed to the decline in the investment periodicals and related publications revenues include the increasing amount of competition in the form of free and lower cost investment research on the Internet and research provided by brokerage firms at no cost to their clients.

Within investment periodicals and related publications are subscription revenues to print and electronic products.

Year Ended April 30,                   2008        2007        2006          Percentage Change
(in thousands)                                                            08 vs 07       07 vs 06
Print publication revenues           $  30,660   $  34,090   $  36,756         -10.1 %        -7.3 %
Electronic publication revenues *    $  12,131   $  11,529   $  10,947           5.2 %         5.3 %
Total Investment periodicals and
related publications revenue         $  42,791   $  45,619   $  47,703          -6.2 %        -4.4 %

Unearned Revenues (Short and Long
Term)                                $  32,530   $  34,500   $  37,500          -5.7 %        -8.0 %

* Institutional Sales increased while Retail business decreased.

Value Line's electronic publications revenues derive 47% from institutional accounts and 53% from retail subscribers. For the twelve months ended April 30, 2008, institutional revenues increased $1,092,000 or 23%, while revenues from retail subscribers were down $490,000 or 7% as compared to the twelve months ended April 30, 2007. The decrease in electronic retail publications revenues is primarily attributable to the decrease in circulation within the Company's software products. Circulation of The Value Line Investment Analyzer decreased 11%, which resulted in a $527,000 decline in revenues from this product, partially offset by an increase in the circulation and revenues from online subscriptions to The Value Line Investment Survey. For the year ended April 30, 2008 print publication revenues decreased $3,430,000 or 10% below last fiscal year as a result of the decrease in advertising and increased competition in the form of free and paid investment research.

Licensing revenues
Licensing revenues have grown $205,000, $1,845,000 and $2,475,000, respectively, each of the last three years ended April 30, 2008, 2007 and 2006. As of April 30, 2008, total third party sponsored assets attributable to the licensing business represent $6.3 billion in various products. The recent credit crisis, corporate action by certain closed-end fund shareholders, and a broad market decline has impacted overall assets attributable to the licensing business revenues. However, total assets are relatively unchanged from the previous year end due to the ability of third parties to raise assets to offset the market erosion on their products. In fiscal year 2008 the company signed one new sponsor, which has significant distribution capabilities in the UIT market place. The new sponsor has tested several product related portfolio strategies and we believe will launch an ETF Unit Investment Trust in July 2008. The Company believes the growth of the business is dependent upon the desire of third party marketers to use the Value Line trademarks and proprietary research for their products, signing new licensing agreements, and the marketplace's acceptance of new products. As stated in the past, Value Line believes it was an early entrant into this new market six years ago. Today this market has significantly broadened as a result of product diversification and growth of Index utilization by portfolio managers. Simultaneously, the Company and its third party sponsors face greater competition in the marketplace from Index providers.

Investment management fees and distribution services revenues The investment management fees and distribution services revenues were up $1,666,000 or 5% for the twelve months ended April 30, 2008 as compared to the twelve months ended April 30, 2007 after being down $1,312,000 or 4% for the year ended April 30, 2007 compared to year ended April 30, 2006. During the period, voluntary and contractual fee waivers exist for certain of the Value Line Funds. For the twelve months ended April 30, 2008, 2007, and 2006, 12b-1 fee waivers were $3,774,000, $3,127,000, and $282,000. For the twelve months ended April 30, 2008, 2007, and 2006, total management fee waivers were $226,000, $250,000, and $40,000. The Company and its subsidiary, VLS, have no right to recoup the previously waived amounts of management fees and 12b-1 fees.

The table below illustrates the total fund assets for the twelve months ended April 30, 2008 as compared to the previous two fiscal years. The second table shows the two channels through which the equity funds are available. Shares of Value Line Strategic Asset Management Trust ("SAM") and Value Line Centurion Fund are available to the public only through the purchase of certain variable annuity and variable life insurance contracts issued by The Guardian Insurance & Annuity Company, Inc. ("GIAC").

Year Ended April 30,                      2008          2007          2006          Percentage Change
(in thousands)                                                                    08 vs 07      07 vs 06

Equity funds                           $ 3,307,879   $ 3,284,560   $ 3,290,291          0.7 %        -0.2 %
Fixed income funds                     $   266,172   $   291,586   $   314,022         -8.7 %        -7.1 %
Money Market funds                     $   219,499   $   177,788   $   166,142         23.5 %         7.0 %
Total net assets                       $ 3,793,550   $ 3,753,934   $ 3,770,455          1.1 %        -0.4 %

Equity fund assets sold through GIAC   $   808,055   $   924,231   $ 1,055,069        -12.6 %       -12.4 %
Equity fund assets sold though VLS     $ 2,499,824   $ 2,360,329   $ 2,235,222          5.9 %         5.6 %
Total Equity fund net assets           $ 3,307,879   $ 3,284,560   $ 3,290,291          0.7 %        -0.2 %

The Company believes that the 5.9% growth in equity fund assets for the twelve months of fiscal 2008 and 5.6% growth in equity fund assets for fiscal 2007 excluding SAM and Centurion Funds sold through GIAC, has been in large part due to the good performance for certain Value Line Funds at various intervals in terms of short, mid and long-term returns. As of April 30, 2008, 80% of the equity funds, excluding SAM and Centurion, had four or five-star ratings by Morningstar, Inc.® similar to fiscal 2007. The largest distribution channel for the Value Line Funds remains the fund supermarket platforms including, but not limited to, Charles Schwab & Co., Inc., TD Ameritrade, Inc., and National City Bank.

The Company's fixed income fund assets, representing 7% of total fund assets at April 30, 2008, are down 8.7% from the previous year end. The decline in fixed income assets reflects the challenge of competing against equity funds and other larger fixed income families in a low interest rate environment. The cash fund assets, representing 6% of the total fund assets at April 30, 2008, have increased 23% from the previous year end.. The increase is due primarily to additional cash fund purchases by the Parent company in the fourth quarter. The Parent has made no representations to Value Line as to how long the cash will remain in the Value Line Cash Fund.

Expenses

Advertising and promotion

Year Ended April 30,          2008       2007       2006        Percentage Change
(in thousands)                                                08 vs 07     07 vs 06
Advertising and promotion   $ 13,863   $ 14,628   $ 13,671         -5.2 %        7.0 %

Advertising and promotion expenses for the twelve months ended April 30, 2008 decreased $765,000 as compared to the twelve months ended April 30, 2007. Costs associated with direct mail decreased $1,507,000 or 30% below last fiscal year, due to a targeted reduction in the overall number of pieces mailed year to year. Promotion expense for the twelve months ended April 30, 2008 declined by $381,000 as a result of the reversal of deferred advertising charges related to the SAM and Centurion Funds. Expenditures for print media promoting the Value Line Funds in select markets increased by $424,000 for the twelve months ended April 30, 2008. The major increase of $1,084,000 is due to fees paid to third party intermediaries (supermarkets), such as, Charles Schwab & Co., Inc. to market the Value Line Funds. This expense will fluctuate based on assets invested in the Value Line Funds by clients of the mutual fund supermarkets, and the change in market value of such assets. The Company anticipates third party intermediary expenses will continue to increase as more shareholders come into the Value Line Funds through intermediaries rather than by opening direct accounts.

Salary and employee benefits

Year Ended April 30,               2008       2007       2006        Percentage Change
(in thousands)                                                    08 vs 07      07 vs 06
Salaries and employee benefits   $ 18,594   $ 18,409   $ 19,025         1.0 %        -3.2 %

Over the past several years, the Company has increased productivity by combining the roles and responsibilities and by selective outsourcing. Some duplication of effort has been eliminated and certain tasks, such as some data entry, have been outsourced to third party vendors that the Company believes can provide better controls and results at a favorable cost. As of April 30, 2008 the Company employed 204 employees as compared to 206 employees at year-end April 30, 2007, and 228 at year-end April 30, 2006.

Production and distribution

Year Ended April 30,           2008      2007      2006         Percentage Change
(in thousands)                                               08 vs 07       07 vs 06
Production and distribution   $ 6,251   $ 6,981   $ 7,073         -10.5 %        -1.3 %

Production and distribution expenses for the twelve months ended April 30, 2008 were $730,000 below expenses for the twelve months ended April 30, 2007 and production and distribution expenses for the fiscal year ended April 30, 2007 were $92,000 below expenses for fiscal year ended 2006. Amortized software costs decreased $403,000 below last fiscal year due to a decrease in expenditures for capitalized projects. In addition, the decline in expenses was due to volume reductions in paper, printing and mailing that resulted primarily from a decrease in circulation of the print products. Partially offsetting the savings during fiscal 2008 was an approximate 8% increase in the cost of paper mid fiscal year and an increase in postage rates. The Company anticipates paper prices will increase over the upcoming fiscal year as raw material prices increase.

Office and administration

Year Ended April 30,         2008      2007       2006       Percentage Change
(in thousands)                                             08 vs 07     07 vs 06
Office and administration   $ 9,520   $ 7,981   $ 10,237        19.3 %      -22.0 %

Office and administration expenses for the twelve months ended April 30, 2008 were $1,539,000 above expenses for the twelve months ended April 30, 2007. For the fiscal year ended April 30, 2007 office and administration expenses were $2,256,000 below expenses for fiscal 2006. During the last fiscal quarter of fiscal 2007, the Company amended its lease in midtown New York extending the lease expiration date to May 2013 on negotiated terms in place of the Company's renewal option at market rate, which resulted in significantly higher rent as a result of market conditions compared to the original square footage terms negotiated in 1993. In addition, under the terms of its original lease, the Company received a rent concession in the amount of $767,950 credited equally to the rent obligation during the six months beginning December 2007. This concession had no earnings impact since prepaid rent was amortized in the period but did positively impact the Company's cash flow. During fiscal year 2008 professional fees significantly increased as compared to fiscal year 2007 primarily as a result of the ongoing SEC investigation. Professional fees fluctuate year to year based on the level of operations, litigation or regulatory activity requiring the use of outside professionals.

Income from securities transactions, net

For the year ended April 30, 2008 the Company's income from securities transactions, net, of $6,294,000 is $1,427,000 higher than income from securities transactions, net, of $4,867,000 for the year ended April 30, 2007. Income from securities transactions, net, includes dividend and interest income of $3,419,000 at April 30, 2008 that is $569,000 or 20% higher than income of $2,850,000 for the twelve months ended April 30, 2007 due to a 41% increase in the net assets invested in fixed income securities. Capital gains, net of capital losses during the fiscal 2008 are $2,874,000, of which $2,793,000 represents distributions from the Value Line Funds. This compares to capital gains of $2,052,000, net of capital losses in fiscal 2007, of which $2,065,000 represented distributions from the Value Line Funds.

For the year ended April 30, 2007, the Company's income from securities transactions, net, is $998,000 higher than the year ended April 30, 2006. Income from securities transactions, net, includes dividend and interest income that is $1,005,000 higher than the previous year due to an increase in interest rates. Capital gains, net of capital losses, for the year ended April 30, 2007 is $2,052,000 of which $2,065,000 represents distributions from the Value Line Funds. This compares to capital gains, net of capital losses, of $2,079,000 during the fiscal year ended April 30, 2006, of which $2,355,000 represents distributions from the Value Line Funds.

The Company had working capital of $88,057,000 as of April 30, 2008 and $75,174,000 as of April 30, 2007. Cash and short-term securities totaled $125,855,000 as of April 30, 2008 and $97,427,000 as of April 30, 2007.

Cash from operating activities

The Company's cash flow from operations of $20,356,000 for the twelve months ended April 30, 2008 was 19% below cash flow from operations of $25,181,000 for the twelve months ended April 30, 2007. The primary change was the timing of purchases and maturity of fixed income government debt securities within the company's trading portfolio, and the decrease in accounts receivable. In addition, beginning December 2007, the Company received a rent concession in the amount of $767,950 credited equally to the rent obligation over 6 months. The concession amounted to $640,000 during fiscal 2008.

Cash from investing activities

The Company's cash outflow from investing activities of $20,027,000 for the twelve months ended April 30, 2008 was 124% above cash outflow from investing activities of $8,927,000 for the twelve months ended April 30, 2007 due to the maturity of fixed income securities during the prior fiscal year and the redeployment of cash holdings to equity securities and fixed income during fiscal 2008.

Cash from financing activities

The Company's net cash outflow from financing activities of $11,979,000 for the year ended April 30, 2008 increased 9% as compared to the prior fiscal year due to the payment of a higher quarterly dividend per common share of $0.30 in fiscal 2008 as compared to $0.25 paid during the first and the second quarters and $0.30 during the last two quarters of fiscal 2007.

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 does not anticipate any borrowing in fiscal 2009.

The Company prepares its consolidated financial statements in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent and the Company evaluates its estimates on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions. The Company believes the following critical accounting policies reflect the significant judgments and estimates used in the preparation of its Consolidated Financial Statements:

† Revenue recognition

† Income taxes

Revenue Recognition

The majority of the Company's revenues come from the sale of print and electronic subscriptions, investment management and service and distribution fees, and licensing proprietary information. The Company recognizes

subscription revenue in equal amounts over the term of the subscription, which generally ranges from three months to one year or longer, varying based on the product or service. Investment management fees and service and distribution fee revenues for the Value Line Funds are recognized each month based upon the daily net asset value of each fund. Licensing fees are calculated monthly based on market fluctuation and billed quarterly. The Company believes that the estimates related to revenue recognition are critical accounting estimates, and to the extent that there are material differences between its determination of revenues and actual results, its financial condition or results of operations may be affected.

Income Taxes

The Company's effective annual income tax expense rate is based on the U.S. federal and state and local jurisdiction tax rates on income and losses that are part of its Consolidated Financial Statements. Tax-planning opportunities and the blend of business income and income from securities transactions will impact the effective tax rate in the various jurisdictions in which the Company operates. Significant judgment is required in evaluating the Company's tax positions.

Tax law requires items to be included in the tax return at different times from when these items are reflected in the Company's Consolidated Financial Statements. As a result, the effective tax rate reflected in its Consolidated Financial Statements is different from the tax rate reported on the Company's tax return (the Company's cash tax rate). Some of these differences are permanent, such as non-taxable income that is not includable in the Company's tax return and expenses that are not deductible in the Company's tax return, and some differences reverse over time, such as depreciation and amortization expenses. These timing differences create deferred tax assets and liabilities. Deferred tax assets and liabilities are determined based on temporary differences between the financial reporting and the tax basis of assets and liabilities.

As of April 30, 2008, the Company had $7.8 million of deferred tax liabilities and $155,000 of short-term deferred tax assets. In assessing the Company's deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

In assessing the need for a valuation allowance, the Company considers both positive and negative evidence, including tax-planning strategies, projected future taxable income, and recent financial performance. If after future assessments of the realizability of the deferred tax assets the Company determines a lesser allowance is required, the Company would record a reduction to the income tax expense and to the valuation allowance in the period this determination was made. This would cause the Company's income tax expense, effective tax rate, and net income to fluctuate.

In addition, the Company establishes reserves at the time that it determines that it is more likely than not that it will need to pay additional taxes related to certain matters. The Company adjusts these reserves, including any impact of the related interest and penalties, in light of changing facts and circumstances such as the progress of a tax audit. A number of years may elapse before a particular matter for which the Company has established a reserve is audited and finally resolved. The number of years with open tax audits varies depending on the tax jurisdiction. Such liabilities are recorded as income taxes payable in the Company's Consolidated Balance Sheets. Settlement of any particular issue would usually require the use of cash. Favorable resolutions of tax matters for which the Company has previously established reserves are recognized as a reduction to the Company's income tax expense when the amounts involved become known.

Assessing the future tax consequences of events that have been recognized in the . . .