How to calculate cash flow from income statement and balance sheet? Discount rate is 16%

Historical Balance Sheets Years Ending December 31, Except as Noted Sin 000's Actual 2000 Actual 2001 Actual 2002 Actual 2003 Actual 2004 Actual 6/30/05 SO 533 S18 5471 $41 S205 SO $329 S8 5419 -S47 S459 58 5638 5196 S162 57 57 5717 S678 5770 S716 $1,065 5813 ASSETS Current Assets Cash Accounts Receivable-Trade Other Accounts Receivable inventory Prepaid Expenses Prepaid Income Taxes/Income Taxes Receivable Total Current Assets Property & Equipment Machines, Equipment & Tooling Office Furniture, Equipment & Vehicle Lanschold Improvements Total Property & Equipment Accumulated Depreciation Net Property & Equipment Other Assets Other Intangible Assets Goodwill Total Other Assets Accumulated Amortization Net Other Assets TOTAL ASSETS 546 5836 548 573 5957 $375 $859 S49 573 $892 S58 $73 573 $869 $53 573 5995 5551 $444 5881 556 $73 S1,010 5589 S421 5932 5298 5981 $465 $1,023 5648 5634 5582 5516 $375 $58 $65 569 $5) S155 SI55 S62 5155 5217 555 SI55 S210 S55 9156 S211 S109 S220 S224 536 S220 S1.480 5217 $1,377 S210 $1,316 S211 $1,697 $1.424 SIASIO $40 5271 $14 $391 50 $277 $370 S10 $199 S22 $16 $107 S13 S22 5156 $23 $366 S22 $171 525 549 $1 $2 SS $117 LIABILITIES & EQUITY Current Liabilities Bank Line of Credit Current Portion of Long Term Debt Accounts Payable Accrued Payroll & Accrued Payroll Taxes Other Accrued Expenses Income Taxes Payable Total Current Liabilities Long-Term Debt - Less Current Portion Deferred Income Taxes Total Liabilities Stockholders' Equity Common Stock Retained Earnings Total Stockholders' Equity TOTAL LIABILITIES & EQUITY S607 S265 $437 5291 $100 SR28 5282 590 5979 $534 5248 590 $319 S219 $76 5614 5586 $231 $90 $907 590 S1.039 5872 $681 $21 $575 $596 $1,424 $21 $480 $501 $1,480 S21 $450 S471 $1,510 S21 $484 $505 $1,377 S21 5769 5790 $1,697 $702 $1,316 Exhibit 3 Page 8 Plastic Molding Company, Inc. Historical (Unadjusted) Income Statements Sin 000's 2004 2000 Actual $6,074 2001 Actual $4,256 2002 Actual $4,614 2003 Actual $4,382 Actual 1st 6 Mo. 05 Actual $2,089 $4,255 $3,116 $1,091 $2,101 $837 $2,222 5819 $2,040 $651 $1,879 S580 5857 S301 $61 S620 $681 $4,888 $1,186 19.5% $75 $545 S620 $3,558 S698 16.4% $76 S554 $630 $3,671 943 20.4% 583 S502 $585 $3,276 S1,106 25.2% $85 S506 $591 $3,050 $1.205 28.3% $39 S266 $305 $1,463 5626 30.0% S18 $14 13 S7 S7 5884 $909 15.00 Net Sales Cost of Goods Sold Material Direct Labor Overhead Depreciation Factory Eq. & Tooling All Other Overhead Total Overhead Cost of Goods Sold - Total Gross Profit % of Net Sales Selling, General & Admin. Expenses Depreciation Office Related Amortization All Other S, G&A Expenses Total Selling, General & Admin. Expenses % of Net Sales Income from Operations % of Net Sales Other Income (Expense) Bad Debt Expense Interest Expense All Other Other Income (Expense) Total Other Income (Expense) Net Income Before Income Taxes Provision for Income Taxes Net Income After Income Taxes % of Net Sales Retained Earnings Beginning of Period Retained Earnings End of Period EBIT % of Net Sales Plus Depreciation & Amortization EBITDA Officer Salaries Estimated Normal General Management Salaries Adjustments to income for owner salaries $840 5861 20.2% -S163 -3.8% $937 $957 20.7% -S14 -0.3% $16 $7 $930 $953 21.7% $153 3.5% S13 $7 $901 $921 21.6% $284 6.7% S4 $476 5487 23.3% $139 6.7 5277 4.6% SO SO -$92 -S30 -S2 $14 S13 $3 $119 $34 -S22 $255 $98 S157 2.6% $418 $575 5301 50% -S42 S31 -S11 -$174 -$79 -$95 -2.2% $575 $480 -S132 -3.1% $96 -$36 $350 $92 S258 SO -S36 SIO -$26 -S40 -S10 -530 -0.7% $480 $450 -54 -0.1% 597 $93 S34 0.8% $450 5484 564 1.5% $106 $170 $444 $97 -S3 $32 S51 $16 $300 $103 $197 4.6% $484 S681 $332 8.2% $105 $437 S309 $100 S209 $136 $51 585 4.1% S681 5766 S150 8296 $50 $200 S154 $50 S104 586 S247 $387 S315 589 S226 $253 $347 Historical Balance Sheets Years Ending December 31, Except as Noted Sin 000's Actual 2000 Actual 2001 Actual 2002 Actual 2003 Actual 2004 Actual 6/30/05 SO 533 S18 5471 $41 S205 SO $329 S8 5419 -S47 S459 58 5638 5196 S162 57 57 5717 S678 5770 S716 $1,065 5813 ASSETS Current Assets Cash Accounts Receivable-Trade Other Accounts Receivable inventory Prepaid Expenses Prepaid Income Taxes/Income Taxes Receivable Total Current Assets Property & Equipment Machines, Equipment & Tooling Office Furniture, Equipment & Vehicle Lanschold Improvements Total Property & Equipment Accumulated Depreciation Net Property & Equipment Other Assets Other Intangible Assets Goodwill Total Other Assets Accumulated Amortization Net Other Assets TOTAL ASSETS 546 5836 548 573 5957 $375 $859 S49 573 $892 S58 $73 573 $869 $53 573 5995 5551 $444 5881 556 $73 S1,010 5589 S421 5932 5298 5981 $465 $1,023 5648 5634 5582 5516 $375 $58 $65 569 $5) S155 SI55 S62 5155 5217 555 SI55 S210 S55 9156 S211 S109 S220 S224 536 S220 S1.480 5217 $1,377 S210 $1,316 S211 $1,697 $1.424 SIASIO $40 5271 $14 $391 50 $277 $370 S10 $199 S22 $16 $107 S13 S22 5156 $23 $366 S22 $171 525 549 $1 $2 SS $117 LIABILITIES & EQUITY Current Liabilities Bank Line of Credit Current Portion of Long Term Debt Accounts Payable Accrued Payroll & Accrued Payroll Taxes Other Accrued Expenses Income Taxes Payable Total Current Liabilities Long-Term Debt - Less Current Portion Deferred Income Taxes Total Liabilities Stockholders' Equity Common Stock Retained Earnings Total Stockholders' Equity TOTAL LIABILITIES & EQUITY S607 S265 $437 5291 $100 SR28 5282 590 5979 $534 5248 590 $319 S219 $76 5614 5586 $231 $90 $907 590 S1.039 5872 $681 $21 $575 $596 $1,424 $21 $480 $501 $1,480 S21 $450 S471 $1,510 S21 $484 $505 $1,377 S21 5769 5790 $1,697 $702 $1,316 Exhibit 3 Page 8 Plastic Molding Company, Inc. Historical (Unadjusted) Income Statements Sin 000's 2004 2000 Actual $6,074 2001 Actual $4,256 2002 Actual $4,614 2003 Actual $4,382 Actual 1st 6 Mo. 05 Actual $2,089 $4,255 $3,116 $1,091 $2,101 $837 $2,222 5819 $2,040 $651 $1,879 S580 5857 S301 $61 S620 $681 $4,888 $1,186 19.5% $75 $545 S620 $3,558 S698 16.4% $76 S554 $630 $3,671 943 20.4% 583 S502 $585 $3,276 S1,106 25.2% $85 S506 $591 $3,050 $1.205 28.3% $39 S266 $305 $1,463 5626 30.0% S18 $14 13 S7 S7 5884 $909 15.00 Net Sales Cost of Goods Sold Material Direct Labor Overhead Depreciation Factory Eq. & Tooling All Other Overhead Total Overhead Cost of Goods Sold - Total Gross Profit % of Net Sales Selling, General & Admin. Expenses Depreciation Office Related Amortization All Other S, G&A Expenses Total Selling, General & Admin. Expenses % of Net Sales Income from Operations % of Net Sales Other Income (Expense) Bad Debt Expense Interest Expense All Other Other Income (Expense) Total Other Income (Expense) Net Income Before Income Taxes Provision for Income Taxes Net Income After Income Taxes % of Net Sales Retained Earnings Beginning of Period Retained Earnings End of Period EBIT % of Net Sales Plus Depreciation & Amortization EBITDA Officer Salaries Estimated Normal General Management Salaries Adjustments to income for owner salaries $840 5861 20.2% -S163 -3.8% $937 $957 20.7% -S14 -0.3% $16 $7 $930 $953 21.7% $153 3.5% S13 $7 $901 $921 21.6% $284 6.7% S4 $476 5487 23.3% $139 6.7 5277 4.6% SO SO -$92 -S30 -S2 $14 S13 $3 $119 $34 -S22 $255 $98 S157 2.6% $418 $575 5301 50% -S42 S31 -S11 -$174 -$79 -$95 -2.2% $575 $480 -S132 -3.1% $96 -$36 $350 $92 S258 SO -S36 SIO -$26 -S40 -S10 -530 -0.7% $480 $450 -54 -0.1% 597 $93 S34 0.8% $450 5484 564 1.5% $106 $170 $444 $97 -S3 $32 S51 $16 $300 $103 $197 4.6% $484 S681 $332 8.2% $105 $437 S309 $100 S209 $136 $51 585 4.1% S681 5766 S150 8296 $50 $200 S154 $50 S104 586 S247 $387 S315 589 S226 $253 $347