E15.8. Integrity of Pro Formas (Hard) An analyst developed the following set of pro forma financial statements as an input into a valuation:

(in millions of dollars) 2009A 2010E 2011E 2012E Sales 454.0 481.2 510.8 Operating expenses 408.6 433.1 459.1 Operating income 45.4 48.1 51,0 Net financial expenses 64 10.5 12.9 Comprehensive income 39.0 37.6 381 Net operating assets 227.0 240.6 255.1 270,4 Net financial obligations 130.0 130.0 130.0 130.0 Common equity 97.0 110.5 125.1 140.4 Net dividends 25.0 25.0 25.0 Free cash flow (19.0) 28.0 29.6

a. Spot the errors in the pro forma.

b. The analyst forecasts from these pro formas that residual operating income will grow at a rate of 8 percent per year. Do the pro formas justify this prediction?