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, Item 1A, Risk Factors, 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: (1) producing investment related periodical publications and making available copyright data including certain Value Line proprietary ranking system information and other proprietary information under agreements 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 (2) 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 businesses.

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 for the retail market are solicited primarily through a series of efforts that include letters, email, and telemarketing. 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 or number of users for corporate and library subscribers.

Cash received for retail and institutional orders is recorded as unearned revenue 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 unearned 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 fees from copyright data including proprietary ranking system information and other proprietary information consolidate into one segment entitled Investment Periodicals, Publications and Copyright Data. The second segment consolidates the investment management services to the Value Line Funds and other managed accounts into a business segment entitled Investment Management.

Results of Operations The recession in the U.S. was in full bloom at year end April 30, 2009, and the global economy continued to falter as well. While the Dow Jones Industrial Average and S&P 500 Index were up 2% and 6% respectively for the quarter ended April 30, 2009, they were down 36% and 37% respectively for the year then ended. The severe downturn and volatility within the financial markets throughout the fiscal year has negatively impacted the Company's assets under management and the assets attributable to third party copyright data partners. This trend can be seen across the asset management industry. According to the Investment Company Institute ("ICI"), the combined assets of the mutual funds in the United States (excluding money market funds) declined by $2.7 trillion or 32% for the twelve months ended April 30, 2009. Although we have not suffered a fundamental change in our business model, the collateral damage from the global economic decline significantly reduced our assets under management and related investment management and copyright data revenues. In response we have been diligent about continuing our expense control and have taken initiatives to reduce costs. The Company continues to be debt free with substantial liquidity sufficient to endure the current economic crisis in terms of anticipated liquidity needs.
The following table illustrates the key earnings figures for each of the past three years ended April 30, 2009, 2008, and 2007.

                                                          Key Earnings Figures
Year Ended April 30,                2009          2008          2007            Percentage Change
(in thousands, except earnings
per share)                                                                   09 vs 08        08 vs 07
Earnings Per Share                $    2.30     $    2.56     $    2.47          -10.2 %           3.6 %
Net Income                        $  22,953     $  25,550     $  24,607          -10.2 %           3.8 %
Operating Income                  $  24,223     $  34,450     $  35,636          -29.7 %          -3.3 %
Income from Securities
transactions, net                 $  11,625     $   6,294     $   4,867           84.7 %          29.3 %

For the twelve months ended April 30, 2009 the Company's net income of $22,953,000 or $2.30 per share was $2,597,000 or 10% below net income of $25,550,000 or $2.56 per share for the twelve months ended April 30, 2008. Operating income of $24,223,000 for the twelve months ended April 30, 2009 was $10,227,000 or 30% below operating income of $34,450,000 last fiscal year. The sharp decline in operating income was partially offset by Company's income from securities transactions, which at $11,625,000 for the twelve months ended April 30, 2009, was $5,331,000 or 85% above last year's level of $6,294,000 due to the sale of the equity portfolio in the second quarter of fiscal year 2009. The Company redeployed the proceeds from the equity portfolio into short term fixed income investments or cash equivalents and does not anticipate significant income from securities transactions this year. Shareholders' equity of $80,869,000 at April 30, 2009 was 8% lower than shareholders' equity of $87,854,000 at April 30, 2008.
The decline in our earnings occurred primarily during the third and fourth quarters of our fiscal year ended April 30, 2009 as the economy and financial markets declined. Net income for the third quarter ended January 31, 2009 was $3,732,000 or 56% less than the net income of $8,471,000 for the third quarter ended January 31, 2008. Net income for the fourth quarter ended April 30, 2009 was $3,617,000 or 24% less than the net income of $4,777,000 for the fourth quarter ended April 30, 2008.

Operating revenues, which consist of investment periodicals, and related publications revenues, copyright data fees, and investment management fees and services, all declined for the twelve months ended April 30, 2009.

                                                      Operating revenues and % of total by year
Year Ended April 30,             2009                    2008                    2007                 Percentage Change
 (in thousands)              $$          %           $$          %           $$          %         09 vs 08        08 vs 07
Investment periodicals
and related
publications              $ 39,935       57.7 %   $ 42,791       51.8 %   $ 45,619       54.5 %         -6.7 %          -6.2 %
Copyright Data fees       $  4,333        6.2 %   $  7,066        8.5 %   $  6,861        8.2 %        -38.7 %           3.0 %
Investment management
fees and services         $ 24,973       36.1 %   $ 32,821       39.7 %   $ 31,155       37.3 %        -23.9 %           5.3 %
   Total Operating
Revenues                  $ 69,241                $ 82,678                $ 83,635                     -16.3 %          -1.1 %

Investment periodicals and related publications revenues

Investment periodicals and related publications revenues were down $2,856,000 or 7% for the twelve months ended April 30, 2009 as compared to the twelve months of the prior fiscal year. 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 competition in the form of free or low cost investment research on the Internet and research provided by brokerage firms at no cost to their clients. As of the end of April 30, 2009, total company-wide circulation has dropped more than 12% compared to the previous year-end, and is down 23% from two years ago. Overall renewal rates for the flagship Value Line Investment Survey are 70%, down from 74% a year earlier. The Company is not adding enough new subscribers to offset the subscribers that choose not to renew. The recession and turmoil in the markets have increased the decline in subscriptions as individuals reduced many forms of discretionary spending, or have shifted investments to fixed income, for which the Company does not provide research. The Company has been fortunate that electronic investment periodicals revenues have increased $715,000 from the previous year, but the increase does not offset the lost print revenue of $3,571,000. Fiscal year institutional sales through April 2009 were in excess of $8 million, up $1.4 million from the previous fiscal year, and the month of March 2009 was the best month in the Company's history for institutional print and electronic publications with approximately $1 million in new and renewal sales.

Within investment periodicals and related publications are subscription revenues derived from print and electronic products. The following chart illustrates the year-to-year change in the revenues associated with print and electronic subscriptions.

                                                         Subscription Revenues
Year Ended April 30,                2009          2008          2007            Percentage Change
(in thousands)                                                               09 vs 08       08 vs 07
Print publication revenues        $  27,089     $  30,660     $  34,090          -11.6 %        -10.1 %
Electronic publication revenues   $  12,846     $  12,131     $  11,529            5.9 %          5.2 %
Total Investment periodicals
and related publications
revenue                           $  39,935     $  42,791     $  45,619           -6.7 %         -6.2 %
Unearned Revenues (Short and
Long Term)                        $  28,997     $  32,530     $  34,500          -10.9 %         -5.7 %

For the twelve months ended April 30, 2009 print publication revenues decreased $3,571,000 or 12% below last fiscal year for the reasons described above. Print circulation, which has always dominated our subscription base, has fallen 30% from two years earlier. Electronic publications revenues grew by $715,000 or 6% for the twelve months ended April 30, 2009 and by 23% for the twelve months ended April 30, 2008. With the exception of The Value Line Investment Survey Online Edition, all other retail electronic services have seen declines in circulation from two years ago.

The electronic publication revenues are broken down into institutional accounts and retail subscribers. For the twelve months ended April 30, 2009, institutional revenues increased $1,348,000 or 24%, while revenues from retail subscribers were down $633,000 or 10% as compared to the twelve months ended April 30, 2008. The Company has successfully expanded its institutional sales marketing efforts, and the increase in institutional revenues is a direct result of a focused effort to boost sales to colleges, libraries and money managers. 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 16%, which resulted in a $463,000 decline in revenues from this product. In March 2009, the Company released its version 4.0 of this product. The Company has received mixed results from subscribers to the product and as of June 2009, has not seen any change in the negative circulation trend for this product.

The Value Line Timeliness Ranking SystemTM ("the Ranking System") has historically been one of the key components in the Company's flagship product, The Value Line Investment Survey, and is also the foundation on which much of the Company's copyright data business is derived. Unfortunately, in the volatile market of the past year, the Ranking System has not performed up to historical standards. Although it has gone through brief periods of underperformance before, the rapid and severe price actions in the markets appear to have favored short-term investing, as investors buy well known names whose earnings have plunged but whose stock prices are cheap, hoping the stock prices will rebound. Such stocks are generally not well ranked by Value Line because the Ranking System emphasizes earnings results and price momentum. The Ranking System is designed to be predictive over a six to 12 month period.

Over the year ended June 9, 2009, the ranking system results were in perfect reverse order, with the rank 5 stocks (lowest ranks) rebounding quickly after being beaten down most of last year, to outperform the rank 1, 2, 3 and 4 stocks. If the market remains as volatile in the coming year as it was last year, or if fundamental market factors result in longer-term deterioration of the Ranking System's predictive performance, the Company believes the ranking system may continue to struggle. This may negatively impact subscription revenues and copyright data fees. The Company and its quantitative research staff are working to improve the Ranking System's predictive performance although no assurances are possible.

Copyright Data Fees

Copyright Data fees have decreased $2,733,000 or 39% for the twelve months ended April 30, 2009 as compared to the twelve months ended April 30, 2008. As of April 30, 2009, total third party sponsored assets are attributable to four contracts for copyright data and represent $2.0 billion in various products as compared to three contracts and $6.3 billion in assets last fiscal year, representing an almost 70% decline in assets year over year. The combination of the underperformance by the Ranking System and the broad and deep declines throughout the equity markets have significantly impacted assets of the third party sponsors that are customers of our copyright data business and have resulted in lower asset based fees paid to the Company. The Company is in discussion with new sponsors in an effort to increase revenues in this area. However, although no agreements were terminated in fiscal year 2009, only one new agreement has been signed. The Company believes the growth of the business is dependent upon the desire of third party marketers to use the Value Line proprietary research and other proprietary information for their products, and the marketplace's acceptance of new products. Today this market is significantly more competitive as a result of product diversification and growth of the use of indexes by portfolio managers. The copyright data of the Value Line ranking system and other proprietary information have been a critical component of the Company's plan to replace the shrinking publishing revenues. Unless the Ranking System's predictive performance improves, we anticipate copyright data revenues will underperform the previous year's revenues from that source.

Investment management fees and distribution services revenues

The financial markets have experienced unprecedented volatility and declines over the past year. Equity indexes such as the DJIA, NASDAQ, and S&P 500 are down 36%, 29%, and 37% respectively for the year ended April 30, 2009. Such market depreciation, a decline in shareholder accounts and net shareholder redemptions have resulted in a contraction in total assets within the Value Line Funds of 39% as compared to a year ago. The following tables illustrate the total fund assets as of April 30, 2009 as compared to the previous two years.

                                                   Total Net Assets
 At April 30,            2009            2008            2007             Percentage Change
 (in thousands)                                                        09 vs 08        08 vs 07
 Equity funds         $ 1,899,128     $ 3,307,879     $ 3,284,560          -42.6 %           0.7 %
 Fixed income funds   $   248,928     $   266,172     $   291,586           -6.5 %          -8.7 %
 Money Market funds   $   181,573     $   219,499     $   177,788          -17.3 %          23.5 %
 Total net assets     $ 2,329,629     $ 3,793,550     $ 3,753,934          -38.6 %           1.1 %

Overall assets under management increased approximately 2% or $50,246,000 from April 30, 2009 to June 30, 2009 compared to an increase in the DJIA and the S&P 500 of 3% and 5%, respectively. As a result of the decline in assets under management occurring over the course of the year, investment management fees and distribution services revenues for the twelve months ended April 30, 2009 were $7,848,000 or 24% below the prior fiscal year. Management fees for the fiscal year 2009 were down $5,796,000 or 24% as compared to fiscal year 2008. There was a net decrease of $1,740,000 or 25% in distribution services revenues (12b-1 fees). During the period, contractual fee waivers have existed for most of the Value Line Funds. For the twelve months ended April 30, 2009 and 2008, 12b-1 fee waivers were $2,889,000 and $3,774,000, respectively. For the twelve months ended April 30, 2009 and 2008, management fee waivers were $208,000 and $226,000, respectively. Twelve of the fourteen funds have a portion of or the full amount of the 12b-1 fees being waived and five of the fourteen funds have partial management fee waivers in place. With very limited exception, the Company and its subsidiaries have no right to recoup the previously waived management fees and 12b-1 fees.

Separately managed accounts revenues decreased $312,000 or 27% for the twelve months ended April 30, 2009 as compared to the twelve months ended April 30, 2008 primarily due to market decline in the portfolios. At the March 12, 2009 meeting of The Board of Directors for the Value Line Funds, the advisory and distribution agreements were continued for another year.

Of the 14 funds managed by the Company, 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"). The table below shows the assets in the equity funds broken down into the two channels in which the equity funds are available.

                                                     Equity Fund Net Assets (Variable Annuity and Open End Equity Funds)
At April 30,                                  2009                   2008                   2007                Percentage Change
(in thousands)                                                                                              09 vs 08        08 vs 07
Variable annuity assets (GIAC)          $        453,959       $        808,055       $        924,231           -43.8 %         -12.6 %
All other open end equity fund assets   $      1,445,169       $      2,499,824       $      2,360,329           -42.2 %           5.9 %
Total Equity fund net assets            $      1,899,128       $      3,307,879       $      3,284,560           -42.6 %           0.7 %

As of April 30, 2009, two of the six equity mutual funds, excluding SAM and Centurion, had four star ratings by Morningstar, Inc. as compared to five of the six equity funds a year earlier. The equity funds had net redemptions for the year ended April 30, 2009, as compared to net sales the previous year. Shareholder accounts for the year ended April 30, 2009 declined to 181,487 from 208,297 for the previous year, representing a 12.8% decline. The largest distribution channel for the Value Line Funds remains the fund supermarket platforms such as Charles Schwab & Co., Inc. The Company has received inquiries from various platforms concerning the SEC investigation described in the Contingencies Footnote 14. The Company believes the accounts that are held at fund supermarkets may be vulnerable based on poor performance and concerns about the SEC investigation, as investment advisors or prospects may choose to redeem existing investments or not make further investments.

The Value Line fixed income mutual fund assets (excluding the Value Line Cash Fund), represent 11% of total mutual fund assets at April 30, 2009 and are down 7% from the previous year. Value Line Cash Fund assets represent 8% of the total fund assets at April 30, 2009 and have decreased 17% from the previous year, primarily since the Company and its Parent redeployed cash into other fixed income investments such as pre-refunded bonds and U.S. Treasuries.

Shareholder transactions for the Value Line Mutual Funds are processed each business day by the third party transfer agent of the Funds. Shares can be redeemed without advance notice upon request of the shareowners each day that the New York Stock Exchange is open. Since the close of the fourth quarter and as of this filing, the financial markets continue to be volatile, but the markets have slightly improved.

The Company's separately managed accounts as of year end April 30, 2009 have $48 million in assets, down from $217 million and $237 million respectively at April 30, 2008 and April 30, 2007. Of the $48 million, $26 million is affiliated with the Parent. Assets within the separately managed accounts are held at third party custodians, are subject to the terms of each advisory agreement and do not have any advance notice requirement for withdrawals, although they have a 30 day advance notice requirement for termination of the account. As of April 30, 2009 the Company lost a $93 million account from the New York State Common Retirement Fund as their five-year contract expired and was not renewed based on a reallocation of investments by the state. The Company did not add any new accounts during the fiscal year.

Expenses

Expenses within the Company are categorized into advertising and promotion, salaries and employee benefits, production and distribution, and office and administration. Operating expenses of $45,018,000 for the twelve months ended April 30, 2009 were $3,210,000 or 7% below operating expenses of $48,228,000 last fiscal year.

Advertising and promotion
  Year Ended April 30,          2009         2008         2007           Percentage Change
  (in thousands)                                                      09 vs 08        08 vs 07
  Advertising and promotion   $ 10,874     $ 13,863     $ 14,628          -21.6 %          -5.2 %

Advertising and promotion expenses for the twelve months ended April 30, 2009 decreased $2,989,000 as compared to the comparable twelve months ended April 30, 2008. Within the investment management segment, supermarket and Guardian (GIAC) platform expenses associated with the distribution of the mutual funds decreased $1,495,000 or 20% below the prior year due to the decline in assets under management. In fiscal 2009, the Company reduced print advertising promoting the mutual funds due to the volatility in the marketplace. For the twelve months ended April 30, 2009, media advertising decreased $140,000, from the twelve months ended April 30, 2008. Within the publishing segment, costs associated with direct mail decreased $1,144,000 or 32% below last fiscal year, due to increased efficiency in the selection of direct mail lists and a reduction in the overall number of pieces mailed year to year. For the twelve months ended April 30, 2009, internet marketing costs increased $98,000 or 50% compared to the twelve months ended April 30, 2008.

Salaries and employee benefits

Year Ended April 30,                2009          2008          2007             Percentage Change
(in thousands)                                                               09 vs 08         08 vs 07
Salaries and employee benefits    $  17,676     $  18,594     $  18,409           -4.9 %            1.0 %

Over the past several years, the Company has saved money by combining the roles and responsibilities of various personnel 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. Salaries and employee benefits decreased by $918,000 from the previous year, primarily due to the Company's decision to not contribute to the Value Line Profit Sharing Plan for fiscal year 2009, which was partially offset by cost of living increases in July 2008 to the staff.

Production and distribution

   Year Ended April 30,           2009        2008        2007           Percentage Change
   (in thousands)                                                    09 vs 08        08 vs 07
   Production and distribution   $ 5,868     $ 6,251     $ 6,981          -6.1 %         -10.5 %

Production and distribution expenses for the twelve months ended April 30, 2009 were $383,000 below expenses for the twelve months ended April 30, 2008. Amortized software costs decreased $415,000 below last fiscal year due to a reduction in prior year expenditures for capitalized costs. 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 the twelve months ended April 30, 2009 was a $79,000 increase in the costs of data feeds, an 8% increase in postage rates, and an approximate 6% increase in the cost of paper during fiscal year 2009, as paper mills closed, keeping prices up. The Company continues to seek purchasing alternatives, more economical delivery methods for the products, and additional ways to reduce the costs of production and distribution.

Office and administration

   Year Ended April 30,          2009        2008        2007           Percentage Change
. . .