Use the provided information and the percent of sales method to forecast free$-$cash$-$flows. Use the average historical ratios in your forecast.

Assumptions

Sales growth $20\%$

Corporate tax rate $21\%$

Minimum cash balance $$5\mathrm{.}00$

Depreciation expense $$10\mathrm{.}00$

Interest rate on debt $10\%$

Actual Projection Average FCF

$123$

Balance sheet $20182019202020212022$

Cash$($plug$)$ $$16\mathrm{.}00$ $$34\mathrm{.}74$

Current Assets $$49\mathrm{.}00$ $$46\mathrm{.}00$

Fixed assets, net $$85\mathrm{.}00$ $$86\mathrm{.}00$

Total Assets $$150\mathrm{.}00$ $$166\mathrm{.}74$

Current liabilities $$37\mathrm{.}00$ $$54\mathrm{.}00$

Long$-$term debt $$48\mathrm{.}00$ $$46\mathrm{.}00$

Debt needed $($plug$)$ $$-$ $$-$

Retained Earnings $$65\mathrm{.}00$ $$66\mathrm{.}74$

Total liabilities and equity $$150\mathrm{.}00$ $$166\mathrm{.}74$

Income statement $20182019$

Sales $$57\mathrm{.}00$ $$49\mathrm{.}00$

COGS $$31\mathrm{.}00$ $$23\mathrm{.}00$

Gross margin $$26\mathrm{.}00$ $$26\mathrm{.}00$

Operating expense $$10\mathrm{.}00$ $$9\mathrm{.}00$

Depreciation $$10\mathrm{.}00$ $$10\mathrm{.}00$

EBIT $$6\mathrm{.}00$ $$7\mathrm{.}00$

Interest $$4\mathrm{.}80$ $$4\mathrm{.}80$

EBT $$1\mathrm{.}20$ $$2\mathrm{.}20$

Taxes $$0\mathrm{.}25$ $$0\mathrm{.}46$

Net income $$0\mathrm{.}95$ $$1\mathrm{.}74$

Total Assets $($except cash$)$

Plus: Minimum required cash balance

Less: Liabilities and equity $($except debt needed$)$

Debt needed or $($excess cash$)$

Financial ratios as a percentage of sales

Acutal Projection

Balance sheet $20182019202020212022$

Current Assets

Fixed assets, net

Current liabilities

Income statement

COGS

Operating expense

Estimate DNWC

Acutal Projection

$20182019202020212022$

Adj. Current assets

Less: Adj. Current liabilities

NWC

DNWC

Estimate FCF

Acutal Projection

$20182019202020212022$

EBIT$(1-$tc$)$

Plus: Depreciation expense

Less: DNWC

Less: Capital Expenditures

FCF