HOW DO I SHOW FREE CASH FLOWS (FCF's) FOR D'LEON Inc PART 2.

Balance Sheets 2015 2016 2017E Assets 57,600 7,282 85,632 Cash 351,200 632,160 878,000 Accounts receivable 715,200 1,287,360 $1,926,802 1,716,480 $2,680,112 Inventories $1,124,000 Total current assets 491,000 1,202,950 1,197,160 Gross fixed assets 146,200 $ 344,800 $1,468,800 263,160 380,120 $ 817,040 Less accumulated depreciation $939,790 Net fixed assets $2,866,592 $3,497,152 Total assets Liabilities and Equity $ 145,600 $ 436,800 524,160 Accounts payable 136,000 489,600 408,000 Accruals 200,000 $ 481,600 636,808 300,000 Notes payable $1,650,568 $1,144,800 Total current liabilities 723,432 323,432 400,000 Long-term debt 460,000 460,000 1,721,176 Common stock 203,768 32,592 Retained earnings 231,176 $ 492,592 $ 663,768 $1,952,352 $3,497,152 Total equity Total liabilities and equity $1,468,800 $2,866,592 Note: E indicates estimated. The 2017 data are forecasts Income Statements Sales 2017E 2016 2015 Cost of goods sold $7,035,600 $6,034,000 5,528,000 $3,432,000 Other expenses 5,875,992 2,864,000 Total operating costs excluding depreciation and 550,000 519,988 358,672 amortization $6,425,992 s 609,608 EBITDA $ 6,047,988 $3,222,672 13,988) 209,328 Depreciation & amortization (S 116.960 116,960 18,900 EBIT (S 130,948) $ 190,428 136,012 S 422,640 (S 266,960) $ 146,600 S 492,648 Interest expense 70,008 43,828 EBT Taxes (40 %) 169,056 $ 253.584 (106,784)" 58,640 Net income (S 160,176) S 87,960 EPS 1.014 (5 1.602) 0.880 OPS Book value per share Stock price Shares outstanding S 0.220 $ 7.809 S 0.110 S 0220 $ 6638 $ 8.50 $ 4.926 S 2.25 $12.17 250,000 100,000 100,000 Tax rate 40.00 % 40.00% 40.00% Lease payments Sinking fund payments $40,000 $40,000 $40,000 0 0 0 Note: E indicates estimated. The 2017 data are forecasts. The firm had sufficient taxable income in 2014 and 2015 to obtain its full tax refund in 2016. TABLE IC 4.3 Ratio Analysis Industry Average 2017E 2016 2015 Current 1.2x 2.3x 2.7x Quick 0.4x 0.8x 1.0x inventory turnover 4.7x 4.8x 6.1x Days sales outstanding (DSO) 38.2 37.4 32.0 Fixed assets turnover 6.4x 10.0x 7.0x Total assets turnover 2.1x 2.3x 2.6x Debt-to-capital ratio 73.4% 44.1% 40.0% TIE 4.3x -1.0x 6.2x Operating margin Profit margin -2.2 % 5.5% 7.3% -2.7% 2.6% 3.5% Basic earning power 4.6% 13.0% 19.1 % ROA -5.6% 6.0% 9.196 ROE -32.5% 13.3% 18.2% ROIC -4.2 % 9.6% 14.5% Price/earnings -14x 9.7x 14.2x Market/book 0.5x 1.3x 2,4x Book value per share $4.93 $6.64 n.a. Note: E indicates estimated. The 2017 data are forecasts. Calculation is based on a 365-day year. 1ancia