1 8 288-023 Cash Flows and Valuation Years 1 5: nitial Sales Growth Rate Years 6-10: Terminal Years (Year 11 on): 100.0 20.0% 10.0% 50.0% Growth Rate 15.0% 10.0% 50.0% Terminal Terminal Terminal Growth Rate EBIAT/S (FMC)/S 6.0% 10.0% 50.0% (FA UC)/S Grouth EBIAT/ FA Wc/ Year Sales Rate Sales Sales EBIAT FA WC FA W FCF/ FCF 0 100.0 1 120.0 2 144.0 50.0% 20.0% 10.0% 50.0% 12.0 60.0 20.0% 10.0% 50.0% 14.4 16.7% 16.7% 72.0 172.8 20.0% 10.0% 50.0% 17.3 06.4 4 207. 5 248.8 6 286.2 15.0% 10.0% 50.0% 28.6 143.1 18.7 10.0 24.8 34.8% 20.0% 10.0% 50.0% 20.7 103.7 17.3 20.0% 10.0% 50.0% 24.9 124. 16.7% 15.0% 10.0% 50.0% 32.9 16.5 21.5 1,4 36.3 8 378.4 15.0% 10.0% 50.0% 37.8 189.2 24.7 13.2 9 435.2 15.0% 10.0% 50.0% 43.5 217.6 28.4 15.1 64.6 34.8% .8% 34.8% 10 500.5 1 530.5 15.0% 10.0% 50.0% 50.0 250.2 32.6 6.0% 10.0% 50.0% 53.1 265.3 15. 34.8% 82.0 38.0 20.0 Total Present Value of Free Cash Flows Terminal Growth Rate Discount -- 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 10.0% 234.6 247.5 263.6 284.2 311.8 350.4 408.3 504.8 697.7 12.0% 171.2 177.5 185.2 194.5 206.1 221.1 241.0 268.9 310.8 14.0% 129.3 132.5 136.3 140.8 146.2 152.8 161.1 171.7 185.8 16.0% 100.2 101.9 103.9 106.1 108.7 111.8 115.5 120.1 125.7 18.0% 79.4 20.0% 64.1 22.0% 52.5 24.0% 43.7 43.7 43.8 43.8 43.9 43.9 44.0 44.1 26.0% 36.7 28.0% 31.3 30.0% 26.9 26.8 Panel 81.3 82.4 65.0 65.5 52.7 52.9 53.1 83.785.1 86.9 88.9 68.4 69.5 53.653.9 54.3 54 36.736.7 36.6 36.6 36.6 36.5 30.9 30.8 30.7 30.5 26.0 26.726.6 26.5 EBIAT Earnings Before Interest, But After Taxes FA Net Fixed Assets WC Operating Working Capital FCF # Total Free Cash Flow EBIAT (Change in FA and WC) Total Present Value Present Value of FCF + Present Value of Terminal Value Terminal value FCF in year 11 divided by (Discount Rate . Terminal Growth Rate) e Model