2020 2021 2022 2023 2024 2025 Hints 200,000 Shown as positive because it is an expense that will cease to exist 5 Income Statement Finished Goods Expense Depreciation 2 Labor Overhead 1 EBIT Interest Income (5% interest rate) 3 Pretax 1 Tax (30%tax rate) Net Income 200,000 (60,000) (100,000) (10,000) 30,000 (60,000) (100,000) (10,000) 30,000 200,000 (60,000) (100,000) (10,000) 30,000 200,000 (60,000) (100,000) (10,000) 30,000 200,000 (60,000) (100,000) (10,000) 30,000 Interest Income is based on a 5% interest rate applied to prior year Net Cash (Cash minus Debt) 30,000 9,000 21,000 30,000 9,000 21,000 30,000 9,000 21,000 30,000 9,000 21,000 30,000 9,000 21,000 7 Balance Sheet (change in account) 3 Cash PP&E ) Debt 1 Equity (150,000 300,000 150,000 Cash is equal to that of the previous year plus Cash Generated PP&E is equal to that of the previous year minus CapEx (shown on Cash Flow Statement as negative) minus Depreciation Debt is equal to that of the previous year plus Issues (Retirement) of Debt Equity is equal to that of the previous year plus Net Income (there are no Dividends) Net Income from the Income Statement Investment Required spread of the useful life (5 years) 3 Cash Flow Statement 1 Net Income Depreciation 5 Cash Flow from Operations 7 Capex 3 Cash Flow from Investing Issues (Retirement) Debt Cash Flow from Financing 1 Cash Generated (300,000) (300,000) 150,000 150,000 (150,000) Debt based on Percent Debt Financed with 1/5th retired each year 2020 2021 2022 2023 2024 2025 Hints 200,000 Shown as positive because it is an expense that will cease to exist 5 Income Statement Finished Goods Expense Depreciation 2 Labor Overhead 1 EBIT Interest Income (5% interest rate) 3 Pretax 1 Tax (30%tax rate) Net Income 200,000 (60,000) (100,000) (10,000) 30,000 (60,000) (100,000) (10,000) 30,000 200,000 (60,000) (100,000) (10,000) 30,000 200,000 (60,000) (100,000) (10,000) 30,000 200,000 (60,000) (100,000) (10,000) 30,000 Interest Income is based on a 5% interest rate applied to prior year Net Cash (Cash minus Debt) 30,000 9,000 21,000 30,000 9,000 21,000 30,000 9,000 21,000 30,000 9,000 21,000 30,000 9,000 21,000 7 Balance Sheet (change in account) 3 Cash PP&E ) Debt 1 Equity (150,000 300,000 150,000 Cash is equal to that of the previous year plus Cash Generated PP&E is equal to that of the previous year minus CapEx (shown on Cash Flow Statement as negative) minus Depreciation Debt is equal to that of the previous year plus Issues (Retirement) of Debt Equity is equal to that of the previous year plus Net Income (there are no Dividends) Net Income from the Income Statement Investment Required spread of the useful life (5 years) 3 Cash Flow Statement 1 Net Income Depreciation 5 Cash Flow from Operations 7 Capex 3 Cash Flow from Investing Issues (Retirement) Debt Cash Flow from Financing 1 Cash Generated (300,000) (300,000) 150,000 150,000 (150,000) Debt based on Percent Debt Financed with 1/5th retired each year