Suppose today is January 1, 2022. The current market price (January 1, 2022) of stock a is $3.00. Assume that Amaan's outstanding share count is 2 million and this share does not change for the next 5 years. display excel

Using the assumptions in Table 2, forecast the next five years balance sheet and income statement for Table 3.

Table 2: Assumptions for forecasting model

Sales growth	Regression of sales on the last 10 years
Current sale	RM1500
Current assets	10% of end-of-year sales
Current liabilities	3% of end-of-year sales
Net fixed assets	70% of end-of-year sales
Costs of goods sold	50% of end-of-year sales
Depreciation	10% of the average value of assets on the books during the year.
Fixed assets at cost	Sum of net fixed assets plus accumulated depreciation.
Interest on debt	5% of the average balance of debt during the year.
Cash and marketable securities	6% of the average balances of cash and marketable securities.
Tax rate	30%
Dividend payout ratio	40%

Table 3: Financial statement model of ABC Corporation for current year is given below.

	RM (in thousands)
Year	0
Income statement
Sales	1,500
Costs of goods sold	(750)
Interest payments on debt	(32)
Interest earned on cash and marketable securities	5
Depreciation	(100)
Profit before tax	623
Taxes	(156)
Profit after tax	467
Dividends	(187)
Retained earnings	280
Balance sheet
Cash and marketable securities	80
Current assets	150
Fixed assets
At cost	1,350
Depreciation	(300)
Net fixed assets	1,050
Total assets	1,280
Current liabilities	45
Debt	635
Stock	450
Accumulated retained earnings	150
Total liabilities and equity	1,280
Year	0
Free cash flow calculation
Profit after tax
Add back depreciation
Subtract increase in current assets
Add back increase in current liabilities
Subtract increase in fixed assets at cost
Add back after-tax interest on debt
Subtract after-tax interest on cash and mkt. securities
Free cash flow