Assumption post-LBO

1. Revenue growth, years 1-2 4% 4%

Revenue growth years 3-4 4% 4%
2. Constant ratios of COGS and SG&A to Revenues
COGS/Revenue 53% 53%
SG&A/Revenue 33% 33%

3. Current interest rate (average) 5.00% 6.50%

4. Tax rate 21% 21%
5. Depreciation is included in SG&A
6. Depreciation constant fraction of revenues 4% 4%
7. Working capital = % of revenue growth 10% 10%
8. Capital expenditure forecasts
2021 1890 1890
2022 2220 2220
2023 1335 1335
2024 1300 1300

9. Dividend payout ratio 50% 0%

10. No future change in liabilities
11. No equity issuance or repurchase
12. WACC 10% 10.0%
13. Long term growth rate in cash flows 2% 2%
Income Statement
Dec-20 Dec-21 Dec-22 Dec-23 Dec-24
Revenue 24753 25743 26773 27844 28958
COGS 13035 13556 14099 14663 15249
SG&A 8235 8564 8907 9263 9634
Others 63 0 0 0 0
EBIT 3420 3622 3767 3918 4075
Interest expense 502 502 502 502 502
Other non-operating income 77 0 0 0 0
Other charges 18 0 0 0 0
Income before tax 2977 3120 3265 3416 3573
Income Taxes 625 655 686 717 750
Minority interest -33 0 0 0 0
Net income 2319 2465 2580 2699 2822

Cash Flow Statement

Dec-20 Dec-21 Dec-22 Dec-23 Dec-24
Net income 2319 2465 2580 2699 2822
Depreciation 990 1030 1071 1114 1158
Adjustment to earnings -13 0 0 0 0
Increase in net working capita -98 -99 -103 -107 -111
Cash flow from operations 3198 3396 3548 3705 3869

Capital expenditures -1235 -1890 -2220 -1335 -1300

Other cash from investing -180 0 0 0 0
Cash flow from investing -1415 -1890 -2220 -1335 -1300

Dividends paid -1159 -1233 -1290 -1349 -1411

Net issuance of stock 77 0 0 0 0
Net borrowing -87 0 0 0 0
Other cash from financing -11 0 0 0 0
Cash flow from financing -1180 -1233 -1290 -1349 -1411

Net change in cash 603 273 38 1021 1158

Balance Sheet
Dec-20 Dec-21 Dec-22 Dec-23 Dec-24
Cash and ST Investments 4133 4406 4444 5465 6623
Receivables and Inventory 7114 7213 7316 7423 7534
Other current assets 125 125 125 125 125
Current Assets 11372 11744 11885 13013 14283
Net Property, Plant and Equi 12363 13223 14372 14594 14735
Other non-current assets 25 25 25 25 25
Non-current Assets 12388 13248 14397 14619 14760
Total Assets 23760 24993 26282 27632 29043

Short-term debt 464 464 464 464 464

Accounts payable 1765 1765 1765 1765 1765
Other current liabilities 657 657 657 657 657
Total current liabilities 2886 2886 2886 2886 2886
Long-term debt 9574 9574 9574 9574 9574
Other non-current liabilities 0 0 0 0 0
Total non-current liabilities 9574 9574 9574 9574 9574
Total liabilities 12460 12460 12460 12460 12460

Total Equity 11300 12533 13822 15172 16583

Change in retained earnings 1233 1290 1349 1411

Change in equity 1233 1290 1349 1411
(Note: these two items must be the same in all years)
(This is a way to check your pro-forma forecasts)
Cash flows
2021 Dec 2022 Dec 2023 Dec 2024 Dec
EBITDA 4652 4838 5032 5233
Capital expenditures -1890 -2220 -1335 -1300
Change in NWC -99 -103 -107 -111
Taxes -580 -550 -776 -826
Cash flows 2083 1965 2813 2996

Terminal value 38194

2020 Dec
Firm (enterprise) value 33765
Total debt 10038
Cash 4133
Equity value 27860
Debt Equity (market) Leverage Cash

10038 20000 33.4% 4133 Initial

7905 20000 28.3% 2000 After debt buyback

Sources of capital Pre-LBO BS Post-LBO BS

PE cash 3000 Assets Debt Assets

New debt 21000 27905 7905 35765
Equity
Deal price 24000 20000

Leverage
New interest

Interest rate 6.5%

New interest pa 1365

Total interest pa 1760

Debt
28905
Equity
6860

0.808197
Income Statement Growth rate 2% 2% 2%
Dec-21 Dec-22 Dec-23 Dec-24 Dec-25 Dec-26 Dec-27
Revenue 25743 26773 27844 28958 29537 30127 30730
COGS 13556 14099 14663 15249 15554 15865 16182
SG&A 8564 8907 9263 9634 9826 10023 10223
Others 0 0 0 0 0 0 0
EBIT 3622 3767 3918 4075 4156 4239 4324
Interest expense 1760 1760 1760 1760 1760 1760 1760
Other non-operating income 0 0 0 0 0 0 0
Other charges 0 0 0 0 0 0 0
Income before tax 1862 2007 2158 2314 2396 2479 2564
Income Taxes 391 421 453 486 503 521 538
Minority interest 0 0 0 0 0 0 0
Net income 1471 1586 1705 1828 1893 1958 2025

Cash Flow Statement

Dec-21 Dec-22 Dec-23 Dec-24 Dec-25 Dec-26 Dec-27
Net income 1471 1586 1705 1828 1893 1958 2025
Depreciation 1030 1071 1114 1158 1181 1205 1229
Adjustment to earnings 0 0 0 0 0 0 0
Increase in net working capi -99 -103 -107 -111 -58 -59 -60
Cash flow from operations 2402 2553 2711 2875 3016 3104 3194

Capital expenditures -1890 -2220 -1335 -1300 -1326 -1353 -1380

Other cash from investing 0 0 0 0 0 0 0
Cash flow from investing -1890 -2220 -1335 -1300 -1326 -1353 -1380

Dividends paid 0 0 0 0 0 0 0
Net issuance of stock 0 0 0 0 0 0 0
Net borrowing 0 0 0 0 0 0 0
Other cash from financing 0 0 0 0 0 0 0
Cash flow from financing 0 0 0 0 0 0 0

Net change in cash 512 333 1376 1575 1690 1752 1815

Balance Sheet
Dec-21 Dec-22 Dec-23 Dec-24 Dec-25 Dec-26 Dec-27
Cash and ST Investments 2512 2845 4221 5797 7487 9239 11054
Receivables and Inventory 7213 7316 7423 7534 7592 7651 7712
Other current assets 125 125 125 125 125 125 125
Current Assets 9850 10286 11769 13456 15204 17015 18890
Net Property, Plant and Eq 13223 14372 14594 14735 14880 15027 15178
Other non-current assets 25 25 25 25 25 25 25
Non-current Assets 13248 14397 14619 14760 14905 15052 15203
Total Assets 23098 24684 26388 28216 30109 32068 34093

Short-term debt 464 464 464 464 464 464 464

Accounts payable 1765 1765 1765 1765 1765 1765 1765
Other current liabilities 657 657 657 657 657 657 657
Total current liabilities 2886 2886 2886 2886 2886 2886 2886
Long-term debt 28441 28441 28441 28441 28441 28441 28441
Other non-current liabilities 0 0 0 0 0 0 0
Total non-current liabilities 28441 28441 28441 28441 28441 28441 28441
Total liabilities 31327 31327 31327 31327 31327 31327 31327

Total Equity -8229 -6643 -4939 -3111 -1218 741 2766

Change in retained earnings 1471 1586 1705 1828 (Note: these two items must be the same in yea
Change in equity -19065 1586 1705 1828 (This is a way to check your pro-forma forecasts
 2% 2.0% …
Dec-28 Dec-29
31345
16506
10428
0
4410
1760
0
0
2650
557
0
2094

Dec-28
2094
1254
0
-61
3286

-1407
0
-1407

0
0
0
0
0

1879

Dec-28
12932
7773
125
20831
15331
25
15356
36187

464
 1765
657
2886
28441
0
28441
31327

4860

ms must be the same in years after the LBO)

ck your pro-forma forecasts)
Cash flows
2021 Dec 2022 Dec 2023 Dec 2024 Dec 2025 Dec 2026 Dec 2027 Dec 2028 Dec
EBITDA 4652 4838 5032 5233 5338 5444 5553 5664
Capital expenditures -1890 -2220 -1335 -1300 -1326 -1353 -1380 -1407
Change in NWC -99 -103 -107 -111 -58 -59 -60 -61
Taxes -580 -550 -776 -826 -842 -859 -876 -894
Cash flows 2083 1965 2813 2996 3111 3173 3237 3302

Terminal value 38194

2020 Dec
Firm (enterprise) value 33765 Leverage 0.81
Total debt 28905
Cash 2000
Equity value 6860

WACC 10.0%
Long-term growth 2.0%
Cash flows
2021 Dec 2022 Dec 2023 Dec 2024 Dec
EBITDA 4652 4838 5032 5233
Capital expenditures -1890 -2220 -1335 -1300
Change in NWC -99 -103 -107 -111
Taxes -580 -550 -776 -826
Cash flows 2083 1965 2813 2996

Terminal value 38194

2020 Dec 2024 Dec

Firm (enterprise) value 33765 38194
Total debt 28905 28905
Cash 2000 5797
Equity value 6860 15086

WACC 10.0%
Long-term growth 2.0%

2020 Dec 2021 Dec 2022 Dec 2023 Dec 2024 Dec

PE investment and payoffs -3000 0 0 0 15086

IRR 49.75%

NPV for PE fund 3860

Cash flows
2021 Dec 2022 Dec 2023 Dec 2024 Dec
EBITDA 4652 4838 5032 5233
Capital expenditures -1890 -2220 -1335 -1300
Change in NWC -99 -103 -107 -111
Taxes -580 -550 -776 -826
Cash flows 2083 1965 2813 2996

Exit value 37445

2020 Dec 2023 Dec

Firm (enterprise) value 33765 37445
Total debt 28905 28905
Cash 2000 4221
Equity value 6860 12762

WACC 10.0%
Long-term growth 2.0%

2020 Dec 2021 Dec 2022 Dec 2023 Dec

PE investment and payoffs -3000 0 0 12762

IRR 62.03%

NPV for PE fund 3860