Current Values Income Statement Projections Residual Value

Year 0 1 2 3 4 4+
Sales 2000 2240 2509 2810 3147 3147
Gross Margin (20%) 400 448 502 562 629 629
S & G.A (8%) 160 179 201 225 252 252
PBT 240 269 301 337 378 378
Tax (30%) 72 81 90 101 113 113
Net Profit 168 188 211 236 264 264
Balance Sheet Projections
Fixed Asset 600 673 753 844 945 945
Current Asset 600 673 753 844 945 945
Total Asset 1200 1341 1502 1683 1884 1884
Equity 1200 1341 1502 1683 1884 1884
Cash Flow Projections
PAT 188 211 236 264 264
Depreciation (10%) 60 67 75 84 95
Capital Expenditure 133 148 166 186 95
Increase in Cash Flow 73 81 90 101 0
Operating Cash Flow 43 49 55 62 264
Present Value Factor 0.87 0.756 0.658 0.572

Present Value of the operating cash flow 37 37 36 35

PV of the operatinng cash flow (at year 0) 146

Residual value (at year 4) 1760

PV of the residual value (at year 0) 1007
Total shareholder value 1153
Pre strategy value 1120
Value of strategy 33