Income Statement for the Year Ending December 31 (Millions of Dollars) 2016 Net Sales $800.0 Costs (except depreciation) $576.0 Depreciation $60.0 Total operating costs $636.0 Earning before int. & tax $164.0 Less interest $32.0 Earning before taxes $132.0 Taxes (40%) $52.8 Net income before pref. div. $79.2 Preferred div. $1.4 Net income avail. for com. div. $77.9 Common dividends $31.1 Addition to retained earnings $46.7 Number of shares (in millions) 10 Dividends per share $3.11 Balance Sheets for December 31 (Millions of Dollars) Assets 2016 Liabilities and Equity 2016 Cash $8.0 Accounts Payable $16.0 Short-term investments 20.0 Notes payable 40.0 Accounts receivable 80.0 Accruals 40.0 Inventories 160.0 Total current liabilities $96.0 Total current assets $268.0 Long-term bonds $300.0 Net plant and equipment 600.0 Preferred stock $15.0 Total Assets $868.0 "Common Stock (Par plus PIC)" $257.0 Retained earnings 200.0 Common equity $457.0 Total liabilities and equity $868.0 Projected ratios and selected information for the current and projected years are shown below. Inputs Actual Projected Projected Projected Projected 12/31/2016 12/31/17 12/31/18 12/31/19 12/31/20 Sales Growth Rate 15% 10% 6% 6% Costs/Sales 72% 72% 72% 72% 72% Depreciation/(Net PPE) 10% 10% 10% 10% 10% Cash/Sales 1% 1% 1% 1% 1% (Acct. Rec.)/Sales 10% 10% 10% 10% 10% Inventories/Sales 20% 20% 20% 20% 20% (Net PPE)/Sales 75% 75% 75% 75% 75% (Acct. Pay.)/Sales 2% 2% 2% 2% 2% Accruals/Sales 5% 5% 5% 5% 5% Tax rate 40% 40% 40% 40% 40% Weighted average cost of capital (WACC) 10.5% 10.5% 10.5% 10.5% 10.5%

Please show which formulas I would use to get the answers in Excel. .

(12-11) Build a Model: Forecasting and Valuation Start with the partial model in the file Ch12 Pl Build a Model.xlsx on the textbook's Web site, which contains Henley Corporation's most recent financial statements. Use the following ratios and other selected information for the current and projected years to answer the next questions. Projected Actual 12/31 12/31/ 12/31/ 12/31/ 12/31/ 2016 2017 20182019 2020 Sales growth rate Costs/Sales Depreciation/(Net PPE) Cash/Sales (Accounts receivable)/Sales (Inventories)/Sales (Net PPE)/Sales (Accounts payable)/Sales Accruals/Sales Tax rate Weighted average cost of capital 05 10.5 10.510.5 10.5 (WACC) 15% 10% 696 696 72 10 72 10 72 10 72% 10 72 10 10 20 10 20 10 20 10 20 10 20 75 7575 75 75 40 40 40 40 40 a. Forecast the parts of the income statement and balance sheet that are necessary for calculating free cash flow. b. Calculate free cash flow for each projected year. Also calculate the growth rates in free cash flow each year to ensure that there is constant growth (that is, the same as the constant growth rate in sales) by the end of the forecast period. c. Calculate the return on invested capital (ROIC NOPAT/Total net operating capital]) and the growth rate in free cash flow. What is the ROIC in the last year of the forecast? What is the long-term constant growth rate in free cash flow (gL is the growth rate in FCF in the last forecast period because all ratios are constant)? Do you think that Hensley's value would increase if it could add growth without reducing its ROIC? (Hint: Growth will add value if the ROIC> WACC/[1 + WACC].) Do you think that the company will have a value of operations greater than its total net operating capital? (Hint: Is ROIC> WACC/1+gL] ) d. Calculate the current value of operations. Hint: First calculate the horizon value at the end of the forecast period, which is equal to the value of operations at the end of the forecast period. Assume that the annual growth rate beyond the horizon is equal to the growth rate at the horizon.) How does the current value of operations compare with the current amount of total net operating capital? e. Calculate the intrinsic price per share of common equity as of 12/31/2016. (12-11) Build a Model: Forecasting and Valuation Start with the partial model in the file Ch12 Pl Build a Model.xlsx on the textbook's Web site, which contains Henley Corporation's most recent financial statements. Use the following ratios and other selected information for the current and projected years to answer the next questions. Projected Actual 12/31 12/31/ 12/31/ 12/31/ 12/31/ 2016 2017 20182019 2020 Sales growth rate Costs/Sales Depreciation/(Net PPE) Cash/Sales (Accounts receivable)/Sales (Inventories)/Sales (Net PPE)/Sales (Accounts payable)/Sales Accruals/Sales Tax rate Weighted average cost of capital 05 10.5 10.510.5 10.5 (WACC) 15% 10% 696 696 72 10 72 10 72 10 72% 10 72 10 10 20 10 20 10 20 10 20 10 20 75 7575 75 75 40 40 40 40 40 a. Forecast the parts of the income statement and balance sheet that are necessary for calculating free cash flow. b. Calculate free cash flow for each projected year. Also calculate the growth rates in free cash flow each year to ensure that there is constant growth (that is, the same as the constant growth rate in sales) by the end of the forecast period. c. Calculate the return on invested capital (ROIC NOPAT/Total net operating capital]) and the growth rate in free cash flow. What is the ROIC in the last year of the forecast? What is the long-term constant growth rate in free cash flow (gL is the growth rate in FCF in the last forecast period because all ratios are constant)? Do you think that Hensley's value would increase if it could add growth without reducing its ROIC? (Hint: Growth will add value if the ROIC> WACC/[1 + WACC].) Do you think that the company will have a value of operations greater than its total net operating capital? (Hint: Is ROIC> WACC/1+gL] ) d. Calculate the current value of operations. Hint: First calculate the horizon value at the end of the forecast period, which is equal to the value of operations at the end of the forecast period. Assume that the annual growth rate beyond the horizon is equal to the growth rate at the horizon.) How does the current value of operations compare with the current amount of total net operating capital? e. Calculate the intrinsic price per share of common equity as of 12/31/2016