Sample Extreme Client

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1 Take a snapshot of a projection and perform a what-if scenario on the current projection using the projection controls. Initial Current Projection 12/31/ /31/ /31/2013 Income Statement Sales (Income) $77,286,816 $77,286,816 Cost of Sales (COGS) $40,436,462 $40,436,462 Gross Profit $36,850,354 $36,850,354 Overhead or S,G,& A Expenses $0 $0 EBITDA $8,708,178 $8,708,178 Net Income $7,559,504 $7,559,504 Balance Sheet Cash (Bank Funds) $4,259,379 $4,259,379 Total Current Assets $26,621,686 $26,621,686 Net Fixed Assets $5,180,109 $5,180,109 Total Assets $42,482,922 $42,482,922 Total Current Liabilities $17,031,245 $17,031,245 Total Long Term Liabilities $5,783,680 $5,783,680 Total Equity $47,027,796 $47,027,796 Valuation Company Value $410,943,774 $410,943,774 Projection Assumptions Sales Growth 6.85% 6.85% Overhead Growth 0.00% 0.00% Gross Profit Margin 47.68% 47.68% Accounts Receivable Days 11.8 days 11.8 days Accounts Payable Days days days Inventory Days days days

2 $90,000,000 $80,000,000 $70,000,000 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $0 Sales (Income) Cost of Sales (COGS) Income Statement Gross Profit Overhead or S,G,& A Expenses EBITDA Initial 12/31/2013 Current Projection 12/31/2013 Net Income Balance Sheet $50,000,000 $45,000,000 $40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 Cash (Bank Funds) Total Current Assets Net Fixed Assets Total Assets Total Current Liabilities Total Long Term Liabilities Total Equity Initial 12/31/2013 Current Projection 12/31/2013

3 ojection Controls Loans / Debt Structure Summary For any loans highlighted in red, the system was unable to reconcile the terms of the loan, and had to make some adjustments Borrower Number Description Type Financing Balance Monthly Payment Interest Rate Existing Loans Short Term Debt Line Of Credit Senior Debt $2,995, $12, % Senior Debt Fixed Payment Senior Debt $1,059, $32, % Key Metrics See below for a summary of the key metrics; proposed loans are included in the "Proposed" column. Note: All numbers in this section are expressed ANNUALLY. Calculate the debt service for the "Current Period" below based on: Financial Statement Information Key Metrics Current Period Proposed Businesses EBITDA: $6,360,540 $6,360,540 * Estimated Debt Service: $207,835 $207,835 Discretionary Cash Flow: $6,152,705 $6,152,705 Debt Service Coverage Ratio: Interest Coverage Ratio: Total Sales (Income): $72,332,069 $72,332,069 Gross Profit: $34,502,716 $34,502,716 Gross Profit Margin: 47.70% 47.70% Total Assets: $39,757,426 $39,757,426 Total Liabilities: $25,375,265 $25,375,265 Total Equity: $41,741,960 $41,741,960 Debt to Equity Ratio: Formula Key Businesses Estimated Debt Service* = Current Portion of Long Term Debt (prior period) + Interest Expense (current period) Debt Service Coverage Ratio = EBITDA / Estimated Debt Service Interest Coverage Ratio = EBITDA / Interest Expense Debt to Equity Ratio = Total Business Liabilities / Total Business Equity * Estimated debt service for the period; if the debt is itemized, we will be able to provide a more accurate debt service.

4 Audit Historical Audit Projected Gabriel de Jesus BDO Gabriel de Jesus BDO Income Statement 12/31/ /31/ /31/ /31/ /31/ /31/ /31/2017 Sales (Income) $67,372,988 $72,332,069 $77,286,816 $82,580,963 $88,237,759 $94,282,045 $100,740,365 Cost of Sales (COGS) $35,272,775 $37,829,353 $40,436,462 $43,206,360 $46,165,996 $49,328,366 $52,707,359 Gross Profit Margin 47.65% 47.70% 47.68% 47.68% 47.68% 47.68% 47.68% Gross Profit $32,100,213 $34,502,716 $36,850,354 $39,374,603 $42,071,763 $44,953,679 $48,033,006 Depreciation $619,656 $825,758 $919,924 $919,924 $919,924 $919,924 $919,924 Amortization $0 $0 $0 $0 $0 $0 $0 Overhead or S,G,& A Expenses $0 $0 $0 $0 $0 $0 $0 Other Operating Income $1,639,988 $1,676,139 $1,676,139 $1,676,139 $1,676,139 $1,676,139 $1,676,139 Other Operating Expenses $0 $0 $0 $0 $0 $0 $0 Total Operating Expenses $619,656 $825,758 $919,924 $919,924 $919,924 $919,924 $919,924 Operating Profit $33,120,545 $35,353,097 $37,606,569 $40,130,818 $42,827,978 $45,709,894 $48,789,221 Projected Data Interest Expense $98,862 $207,835 $228,750 $48,383 $19,255 $223 $0 Other Income $0 $0 $0 $0 $0 $0 $0 Other Expenses $28,838,344 $29,818,315 $29,818,315 $29,818,315 $29,818,315 $29,818,315 $29,818,315 EBITDA $4,901,857 $6,360,540 $8,708,178 $11,232,427 $13,929,587 $16,811,503 $19,890,830 Net Profit Before Taxes $4,183,339 $5,326,947 $7,559,504 $10,264,120 $12,990,408 $15,891,356 $18,970,906 Adjusted Owner's Compensation $0 $0 $0 $0 $0 $0 $0 Adjusted Net Profit Before Taxes $4,183,339 $5,326,947 $7,559,504 $10,264,120 $12,990,408 $15,891,356 $18,970,906 Taxes Paid $0 $0 $0 $0 $0 $0 $0 Extraordinary Gain $0 $0 $0 $0 $0 $0 $0 Extraordinary Loss $504,596 $0 $0 $0 $0 $0 $0 Loss on impairment of investments $504,596 $0 $0 $0 $0 $0 $0 Net Income $3,678,743 $5,326,947 $7,559,504 $10,264,120 $12,990,408 $15,891,356 $18,970,906 Balance Sheet Assumptions Accounts Receivable Days Accounts Payable Days Inventory Days

5 Balance Sheet 12/31/ /31/ /31/ /31/ /31/ /31/ /31/2017 Cash (Bank Funds) $710,436 $2,262,342 $4,259,379 $11,312,100 $20,193,887 $31,391,588 $44,719,732 Accounts Receivable $2,458,645 $2,229,629 $2,498,587 $2,669,741 $2,852,618 $3,048,022 $3,256,812 Accounts receivable $2,498,069 $2,257,527 $2,529,850 $2,703,146 $2,888,311 $3,086,160 $3,297,563 Allowance ($39,424) ($27,898) ($31,263) ($33,403) ($35,693) ($38,138) ($40,749) Inventory $17,558,757 $18,484,295 $19,863,720 $21,224,385 $22,678,255 $24,231,715 $25,891,588 Other Current Assets $0 $0 $0 $0 $0 $0 $0 Total Current Assets $20,727,838 $22,976,266 $26,621,686 $35,206,226 $45,724,760 $58,671,325 $73,868,132 Gross Fixed Assets $7,754,332 $8,638,604 $8,638,604 $8,638,604 $8,638,604 $8,638,604 $8,638,604 Accumulated Depreciation $1,867,689 $2,538,571 $3,458,495 $4,378,419 $5,298,343 $6,218,267 $7,138,191 Net Fixed Assets $5,886,643 $6,100,033 $5,180,109 $4,260,185 $3,340,261 $2,420,337 $1,500,413 Gross Intangible Assets $0 $0 $0 $0 $0 $0 $0 Accumulated Amortization $0 $0 $0 $0 $0 $0 $0 Net Intangible Assets $0 $0 $0 $0 $0 $0 $0 Other Assets $8,264,266 $10,681,127 $10,681,127 $10,681,127 $10,681,127 $10,681,127 $10,681,127 Investments held for sale $546,740 $827,581 $827,581 $827,581 $827,581 $827,581 $827,581 Prepaid expenses $784,745 $878,349 $878,349 $878,349 $878,349 $878,349 $878,349 Due from affiliates $2,697,517 $4,292,295 $4,292,295 $4,292,295 $4,292,295 $4,292,295 $4,292,295 Investment held to maturity $260,609 $261,211 $261,211 $261,211 $261,211 $261,211 $261,211 Note receivable from affiliate $5,818,969 $6,917,725 $6,917,725 $6,917,725 $6,917,725 $6,917,725 $6,917,725 Other ($1,844,314) ($2,496,034) ($2,496,034) ($2,496,034) ($2,496,034) ($2,496,034) ($2,496,034) Total Assets $34,878,747 $39,757,426 $42,482,922 $50,147,538 $59,746,148 $71,772,789 $86,049,672 Projected Data Accounts Payable $10,512,292 $11,358,166 $12,108,782 $12,938,233 $13,824,502 $14,771,481 $15,783,327 Accounts payable and accrued liabilities $10,512,292 $11,358,166 $12,108,782 $12,938,233 $13,824,502 $14,771,481 $15,783,327 Short Term Debt $3,100,000 $2,995,976 $0 $0 $0 $0 $0 Current Portion of Long Term Debt $0 $335,895 $341,821 $370,949 $32,059 $0 $0 Term loans $0 $309,004 $314,456 $341,252 $29,492 $0 $0 Leases $0 $26,891 $27,365 $29,697 $2,567 $0 $0 Other Current Liabilities $3,680,336 $4,580,642 $4,580,642 $4,580,642 $4,580,642 $4,580,642 $4,580,642 Overdraft $580,336 $1,248,771 $1,248,771 $1,248,771 $1,248,771 $1,248,771 $1,248,771 Other $3,100,000 $3,331,871 $3,331,871 $3,331,871 $3,331,871 $3,331,871 $3,331,871 Total Current Liabilities $17,292,628 $19,270,679 $17,031,245 $17,889,824 $18,437,203 $19,352,123 $20,363,969 Notes Payable / Senior Debt $0 $723,914 $403,008 $32,059 $0 $0 $0 Term Loans $0 $639,329 $355,919 $28,313 $0 $0 $0 Leases $0 $84,585 $47,089 $3,746 $0 $0 $0 Notes Payable / Subordinated Debt $0 $0 $0 $0 $0 $0 $0 Other Long Term Liabilities $3,849,542 $5,380,672 $5,380,672 $5,380,672 $5,380,672 $5,380,672 $5,380,672 Due to affiliates $3,804,242 $4,611,458 $4,611,458 $4,611,458 $4,611,458 $4,611,458 $4,611,458 Commitments and contingencies $45,300 $45,300 $45,300 $45,300 $45,300 $45,300 $45,300 Other $0 $723,914 $723,914 $723,914 $723,914 $723,914 $723,914 Total Long Term Liabilities $3,849,542 $6,104,586 $5,783,680 $5,412,731 $5,380,672 $5,380,672 $5,380,672

6 Total Liabilities $21,142,170 $25,375,265 $22,814,925 $23,302,555 $23,817,875 $24,732,795 $25,744,641 Preferred Stock $0 $0 $0 $0 $0 $0 $0 Common Stock $3,000,000 $3,000,000 $3,000,000 $3,000,000 $3,000,000 $3,000,000 $3,000,000 Additional Paid-in Capital $0 $0 $0 $0 $0 $0 $0 Other Stock / Equity $18,704,266 $20,976,517 $20,976,517 $20,976,517 $20,976,517 $20,976,517 $20,976,517 Comprehensive income/loss ($12,552) $211,074 $211,074 $211,074 $211,074 $211,074 $211,074 Other $18,716,818 $20,765,443 $20,765,443 $20,765,443 $20,765,443 $20,765,443 $20,765,443 Ending Retained Earnings $15,716,818 $17,765,443 $23,051,279 $30,228,265 $39,311,555 $50,423,276 $63,688,313 Total Equity $37,421,084 $41,741,960 $47,027,796 $54,204,782 $63,288,072 $74,399,793 $87,664,830 Total Liabilities + Equity $58,563,254 $67,117,225 $69,842,721 $77,507,337 $87,105,947 $99,132,588 $113,409,471 Total Assets - (Total Liabilities + Equity) ($23,684,507) ($27,359,799) ($27,359,799) ($27,359,799) ($27,359,799) ($27,359,799) ($27,359,799)

7 Statement of Equity 12/31/ /31/ /31/ /31/ /31/ /31/ /31/2017 Preferred Stock $0 $0 $0 $0 $0 $0 $0 Common Stock $3,000,000 $3,000,000 $3,000,000 $3,000,000 $3,000,000 $3,000,000 $3,000,000 Additional Paid-in Capital $0 $0 $0 $0 $0 $0 $0 Other Stock / Equity $18,704,266 $20,976,517 $20,976,517 $20,976,517 $20,976,517 $20,976,517 $20,976,517 Total Stock $21,704,266 $23,976,517 $23,976,517 $23,976,517 $23,976,517 $23,976,517 $23,976,517 Projected Data Beginning Retained Earnings $15,345,638 $15,716,818 $17,765,443 $23,051,279 $30,228,265 $39,311,555 $50,423,276 Net Income $3,678,743 $5,326,947 $7,559,504 $10,264,120 $12,990,408 $15,891,356 $18,970,906 Dividends Paid / Withdrawals $1,667,575 $1,602,183 $2,273,668 $3,087,134 $3,907,118 $4,779,635 $5,705,869 Other Changes to Retained Earnings $0 $0 $0 $0 $0 $0 $0 Unexplained Changes to RE ($1,639,988) ($1,676,139) $0 $0 $0 $0 $0 Ending Retained Earnings $15,716,818 $17,765,443 $23,051,279 $30,228,265 $39,311,555 $50,423,276 $63,688,313 Ending Equity as Calculated Above $39,061,072 $43,418,099 $47,027,796 $54,204,782 $63,288,072 $74,399,793 $87,664,830 Actual Equity from Balance Sheet $37,421,084 $41,741,960 $47,027,796 $54,204,782 $63,288,072 $74,399,793 $87,664,830 Difference (Unexplained Change in Equity) ($1,639,988) ($1,676,139) $0 $0 $0 $0 $0

8 Cash Flow Statement 12/31/ /31/ /31/ /31/ /31/ /31/2017 Cash Flow from Operations Sales (Income) $72,332,069 $77,286,816 $82,580,963 $88,237,759 $94,282,045 $100,740,365 Cost of Sales (COGS) $37,829,353 $40,436,462 $43,206,360 $46,165,996 $49,328,366 $52,707,359 Gross Profit $34,502,716 $36,850,354 $39,374,603 $42,071,763 $44,953,679 $48,033,006 Depreciation $825,758 $919,924 $919,924 $919,924 $919,924 $919,924 Amortization $0 $0 $0 $0 $0 $0 Overhead or S,G,&A Expenses $0 $0 $0 $0 $0 $0 Other Operating Income $1,676,139 $1,676,139 $1,676,139 $1,676,139 $1,676,139 $1,676,139 Other Operating Expenses $0 $0 $0 $0 $0 $0 Operating Profit $35,353,097 $37,606,569 $40,130,818 $42,827,978 $45,709,894 $48,789,221 Interest Expense $207,835 $228,750 $48,383 $19,255 $223 $0 Other Income $0 $0 $0 $0 $0 $0 Other Expenses $29,818,315 $29,818,315 $29,818,315 $29,818,315 $29,818,315 $29,818,315 Net Profit Before Taxes $5,326,947 $7,559,504 $10,264,120 $12,990,408 $15,891,356 $18,970,906 Taxes Paid $0 $0 $0 $0 $0 $0 Extraordinary Gain $0 $0 $0 $0 $0 $0 Extraordinary Loss $0 $0 $0 $0 $0 $0 Net Income $5,326,947 $7,559,504 $10,264,120 $12,990,408 $15,891,356 $18,970,906 Add Back Depreciation $825,758 $919,924 $919,924 $919,924 $919,924 $919,924 Add Back Amortization $0 $0 $0 $0 $0 $0 Decrease (Increase) in Accounts Receivable $229,016 ($268,958) ($171,154) ($182,877) ($195,404) ($208,790) Decrease (Increase) in Inventory ($925,538) ($1,379,425) ($1,360,665) ($1,453,870) ($1,553,460) ($1,659,873) Decrease (Increase) in Other Current Assets $0 $0 $0 $0 $0 $0 Increase (Decrease) in Accounts Payable $845,874 $750,616 $829,451 $886,269 $946,979 $1,011,846 Increase (Decrease) in Other Current Liabilities $900,306 $0 $0 $0 $0 $0 Projected Data Cash Flow from Operations $7,202,363 $7,581,661 $10,481,676 $13,159,854 $16,009,395 $19,034,013 Cash Flow from Investments Capital Expenditures ($1,039,148) $0 $0 $0 $0 $0 Decrease (Increase) in Intangible Assets $0 $0 $0 $0 $0 $0 Decrease (Increase) in Other Assets ($2,416,861) $0 $0 $0 $0 $0 Cash Flow from Investments ($3,456,009) $0 $0 $0 $0 $0 Cash Flow from Financing Activities Increase (Decrease) in Short Term Debt ($104,024) ($2,995,976) $0 $0 $0 $0 Increase (Decrease) in Current Long Term Debt $335,895 $5,926 $29,128 ($338,890) ($32,059) $0 Increase (Decrease) in Senior Debt $723,914 ($320,906) ($370,949) ($32,059) $0 $0

9 Increase (Decrease) in Subordinated Debt $0 $0 $0 $0 $0 $0 Increase (Decrease) in Other Long Term Liabilities $1,531,130 $0 $0 $0 $0 $0 Increase (Decrease) in Preferred Stock $0 $0 $0 $0 $0 $0 Increase (Decrease) in Common Stock $0 $0 $0 $0 $0 $0 Increase (Decrease) in Additional Paid-in Capital $0 $0 $0 $0 $0 $0 Increase (Decrease) in Other Stock $2,272,251 $0 $0 $0 $0 $0 Dividends Paid / Withdrawals $1,602,183 $2,273,668 $3,087,134 $3,907,118 $4,779,635 $5,705,869 Other Changes to Retained Earnings $0 $0 $0 $0 $0 $0 Unexplained Changes to Retained Earnings ($1,676,139) $0 $0 $0 $0 $0 Cash Flow from Financing Activities $1,480,844 ($5,584,624) ($3,428,955) ($4,278,067) ($4,811,694) ($5,705,869) Net Free Cash Flow $5,227,198 $1,997,037 $7,052,721 $8,881,787 $11,197,701 $13,328,144 Beginning Total Cash $710,436 $2,262,342 $4,259,379 $11,312,100 $20,193,887 $31,391,588 Ending Total Cash $5,937,634 $4,259,379 $11,312,100 $20,193,887 $31,391,588 $44,719,732 Unexplained Change in Cash on Balance Sheet ($3,675,292) $0 $0 $0 $0 $0

10 Projection Controls $120,000,000 $100,000,000 Financial Data $80,000,000 $60,000,000 $40,000,000 $20,000,000 $0 12/31/ /31/ /31/ /31/ /31/ /31/ /31/2017 Sales (Income) $67,372,988 $72,332,069 $77,286,816 $82,580,963 $88,237,759 $94,282,045 $100,740,365 Cost of Sales (COGS) $35,272,775 $37,829,353 $40,436,462 $43,206,360 $46,165,996 $49,328,366 $52,707,359 Net Profit Before Taxes $4,183,339 $5,326,947 $7,559,504 $10,264,120 $12,990,408 $15,891,356 $18,970,906 Cash (Bank Funds) $710,436 $2,262,342 $4,259,379 $11,312,100 $20,193,887 $31,391,588 $44,719,732

11 jection Controls Rolling Mill and Other Metalworking Calculate the debt service for the historical periods below based on: Financial Statement Information Sample Extreme Client Sample Extreme Client Liquidity Ratios 12/31/ /31/ /31/ /31/ /31/ /31/2016 Current Ratio Quick Ratio Working Capital $3,435,210 $3,705,587 $9,590,441 $17,316,402 $27,287,557 $39,319,202 $53,504,163 Financial Leverage / Coverage Ratios Debt to Equity Ratio Debt to Tangible Net Worth Ratio Debt Service $98,862 $207,835 $564,645 $390,204 $390,204 $32,282 $0 Debt Service Coverage Ratio N/A Interest Coverage Ratio , N/A Senior Debt to Cash Flow Debt to Cash Flow Debt to Capitalization 36.10% 37.81% 32.67% 30.06% 27.34% 24.95% 22.70% Projected Data 12/31/2017 Profitability Ratios Operating Profit Margin 49.16% 48.88% 48.66% 48.60% 48.54% 48.48% 48.43% Net Profit Margin 6.21% 7.36% 9.78% 12.43% 14.72% 16.86% 18.83% Return on Equity 9.83% 12.76% 16.07% 18.94% 20.53% 21.36% 21.64% Return on Assets 10.55% 13.40% 17.79% 20.47% 21.74% 22.14% 22.05% Activity / Efficiency Ratios Accounts Receivable Days Days Days Days Days Days Days Days Accounts Payable Days Days Days Days Days Days Days Days Inventory Days Days Days Days Days Days Days Days Fixed Asset Turnover Performance Ratios Sales (Income) Growth Rate N/A 7.36% 6.85% 6.85% 6.85% 6.85% 6.85% Gross Profit Margin 47.65% 47.70% 47.68% 47.68% 47.68% 47.68% 47.68% Net Income Growth Rate N/A 44.80% 41.91% 35.78% 26.56% 22.33% 19.38%

12 Note: The ratios displayed in the graphs are calculated based off of the Financial Statement liabilities and equity numbers. Interest Coverage Ratio 80, , , , , , , , /31/ /31/ /31/ /31/ /31/ /31/ /31/2017 Interest Coverage Ratio = EBITDA / Interest Expense Debt Service Coverage Ratio /31/ /31/ /31/ /31/ /31/ /31/ /31/2017 Debt Service Coverage Ratio = EBITDA / Debt Service

13 Debt to Cash Flow /31/ /31/ /31/ /31/ /31/ /31/ /31/2017 Debt to Cash Flow = Long Term Liabilities / EBITDA Senior Debt to Cash Flow /31/ /31/ /31/ /31/ /31/ /31/ /31/2017 Senior Debt to Cash Flow = Senior Debt / EBITDA

14 Debt to Capitalization 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 12/31/ /31/ /31/ /31/ /31/ /31/ /31/2017 Debt to Capitalization = Total Liabilities / (Total Liabilities + Total Equity) Cash $50,000,000 $45,000,000 $40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 12/31/ /31/ /31/ /31/ /31/ /31/ /31/2017

15 ction Controls A Company Valuation for Below is a company valuation using your projected Net Free Cash Flow as a baseline. The valuation gives you an approximate value of what the business could be worth today, based on the projected Net Free Cash Flow analysis that has been performed. CAUTION: The reliability of this valuation depends heavily on the length and accuracy of the projection. We STRONGLY recommend reviewing your data in the Projection tab of this worksheet before examining the valuation below. Company Value: $410,943,774 Major Assumptions: The major assumptions made when performing this analysis have been listed in each section. You may edit / change any of the values shown in red. Cash Flow What convention would you like to use? ProfitCents Projection uses a discounted cash flow method to value a firm. The premise behind this method is that a company should not have a price higher than the amount of cash it will generate in the future. Also, the time value of money is factored in -- $100 today is worth more than $100 in ten years, or even a year. Below are the cash flows of the company -- you may make changes to these cash flows or to the discount rate used to find the present value of the cash flows. 12/31/ /31/ /31/ /31/ /31/2017 EBIT $37,606,569 $40,130,818 $42,827,978 $45,709,894 $48,789,221 Less: Taxes $0 $0 $0 $0 $0 Noncash Expenses $919,924 $919,924 $919,924 $919,924 $919,924 Less: Change in Working Capital $897,767 $702,368 $750,478 $801,885 $856,817 Less: Capital Expenditures $0 $0 $0 $0 $0 Free Cash Flow $37,628,726 $40,348,374 $42,997,424 $45,827,933 $48,852,328 Present Value of Cash Flows (End of Year) $33,246,798 $31,498,267 $29,657,420 $27,928,751 $26,304,910 Present Value of Cash Flows = Net Free Cash Flow / (1 + Discount Rate) ^ X where X = Projected Year (1, 2, 3, etc) Discount Rate = Risk Free Rate + Risk Premium 13.18% = 3.18% % Terminal Value The terminal value is a rough estimate of what the company will be worth at the end of the projection. It is usually difficult to derive a reliable terminal value because there are many factors that affect a terminal value. To account for the cash flow of future years, the last projected cash flow is treated as a perpetuity - an endless annual stream of cash flows that will grow at a specified rate. Any changes can be made to the terminal value directly or to the factors used to calculate this value. Calculation Parameters Terminal Value = (Free Cash Flow (Year 5) * (1+G)) / (DR - G) * (1 / (1+DR))^5 Terminal Value = ( * ( )) / ( ) * (1 / ( ))^5 Terminal Value = $266,149,873 Discount Rate 13.18% G (Estimated Growth Rate) 3.00% Free Cash Flow (Year 5): $48,852,328 Terminal Value $266,149,873 Valuation In addition to the discounted cash flows and the terminal value, the valuation also accounts for cash on hand, long term investments, and long term debt. Taking on debt to purchase a company diminishes its value, whereas a company with cash on hand or long term investments will be more highly valued. For example, a company that will neither generate nor lose cash flow in the future (it will just break even indefinitely) would have a cash flow value of zero. However, if that company has $1 million in cash, the valuation should reflect this. By making these adjustments, a reasonable company value can be determined. If you would like to modify any of these values, please do so by directly changing the amount listed for that variable. Preliminary Company Value = Discounted Cash Flow + Terminal Value + Cash + Long Term Investments - $410,943,774 = $148,636,146 + $266,149,873 + $2,262,342 + $0 - $6,104,586 Long Term Debt