Year Sales Annual Growth Rate

2006 $2,058
2007 $2,534
2008 $2,472
2009 $2,850
2010 $3,000
Average

CAGR
Compounded Annual Growth Rate
 Year Sales Annual Growth Rate
2006 $2,058 $3,000
2007 $2,534 23.13%
2008 $2,472 -2.45% 100
2009 $2,850 15.29% 5%
2010 $3,000 5.26% 105
Average 10.31%

CAGR 9.88%
Compounded Annual Growth Rate
Balance Sheet 2010 2011

Assets

Cash 10.00
Accounts Receivable 375.00
Inventories 615.00
Current Assets 1,000.00 -

Net Plant and Equipment 1,000.00

Non Current Assets 1,000.00 -

Total Assets 2,000.00 -

Liabilities + Equity

Accounts Payable 60.00

Accruals 140.00
Notes Payable 110.00
Current Liabilities 310.00 -

Long Term Bonds 754.00

Non Current Liabilities 754.00 -

Preferred Stock 40.00

Common Stock 130.00
Retained Earnings 766.00
Total Equity 936.00 -

Total Liabilities and Equity 2,000.00 -

Check - -

Investor Supplied Capital 1,800.00

Income Statement 2010 2011

Sales 3,000.00 3,300.00 Sales growth expected of 10%

Costs Except Depreciation 2,616.20

Depreciation 100.00
Total Costs 2,716.20 -

EBIT 283.80 3,300.00

Interest on Notes 9.90

Interest on Bonds 78.10

EBT 195.80 3,300.00

Taxes (40%) 78.32

Net Income before Preferred Dividends 117.48 3,300.00

Less: Preferred Dividends 4.00

Net Income for Common Shareholders 113.48 3,300.00

Dividends Paid Out 57.50

Addition to Retained Earnings 55.98 3,300.00

Number of Shares 50.00

Earnings per Share 2.35
Dividend per Share 1.15

Financing Structure 2010 2011

Notes Payable 6.11%

Bonds 41.89%
Preferred Stock 2.22%
Common Stock 49.78%
Total 100.00%

Interest Rates & Payout Ratios 2010 2011

Notes Payable 9.00%

Bonds 10.36%
Preferred Dividends 10.00%
Commnon Stock 50.67%

AFN Calculation 2010 2011

A*
So
∆ in Sales

Required Assets Increase

L*
So
∆ in Sales

Spontaneous Liability Increase

M = Profit Margin
S1
D=Payout Ratio

Increase in Retained Earnings

Additional Financing Needed

Balance Sheet 2010 2011

Assets

Cash 10.00
Accounts Receivable 375.00
Inventories 615.00
Current Assets 1,000.00 -

Net Plant and Equipment 1,000.00

Non Current Assets 1,000.00 -

Total Assets 2,000.00 -

Liabilities + Equity

Accounts Payable 60.00

Accruals 140.00
Notes Payable 110.00
Current Liabilities 310.00 -

Long Term Bonds 754.00

Non Current Liabilities 754.00 -

Preferred Stock 40.00

Common Stock 130.00
Retained Earnings 766.00
Total Equity 936.00 -

Total Liabilities and Equity 2,000.00 -

Check - -

Investor Supplied Capital 1,800.00

Income Statement 2010 2011

Sales 3,000.00 3,300.00 Sales growth expected of 10%

Costs Except Depreciation 2,616.20

Depreciation 100.00
Total Costs 2,716.20 -

EBIT 283.80 3,300.00

Interest on Notes 9.90

Interest on Bonds 78.10

EBT 195.80 3,300.00

Taxes (40%) 78.32

Net Income before Preferred Dividends 117.48 3,300.00

Less: Preferred Dividends 4.00

Net Income for Common Shareholders 113.48 3,300.00

Dividends Paid Out 57.50

Addition to Retained Earnings 55.98 3,300.00

Number of Shares 50.00

Earnings per Share 2.35
Dividend per Share 1.15

Financing Structure 2010 2011

Notes Payable 6.11%

Bonds 41.89%
Preferred Stock 2.22%
Common Stock 49.78%
Total 100.00%

Interest Rates & Payout Ratios 2010 2011

Notes Payable 9.00%

Bonds 10.36%
Preferred Dividends 10.00%
Commnon Stock 50.67%

AFN Calculation 2010 2011

A* 2,000.00
So 3,000.00 Company A
∆ in Sales 300.00 20 Products
Payable 1000
Required Assets Increase 200.00
Raw Material
L* 200.00 50
So 3,000.00 20
∆ in Sales 300.00 1000

Spontaneous Liability Increase 20.00

M = Profit Margin 3.78%

S1 3,300.00
D=Payout Ratio 50.67%

Increase in Retained Earnings 61.58

Additional Financing Needed 118.42

Company B
3 months
Balance Sheet 2010 2011

Assets

Cash 10.00 Same

Accounts Receivable 375.00 Same % as of 2010 12.50%
Inventories 615.00 Same % as of 2010 20.50%
Current Assets 1,000.00 -

Net Plant and Equipment 1,000.00 Same % as of 2010 33.33%

Non Current Assets 1,000.00 -

Total Assets 2,000.00 -

Liabilities + Equity

Accounts Payable 60.00 Same % as of 2010 2.00%

Accruals 140.00 Same % as of 2010 4.67%
Notes Payable 110.00 % of Investor Supplied Capital
Current Liabilities 310.00 -

Long Term Bonds 754.00 % of Investor Supplied Capital

Non Current Liabilities 754.00 -

Preferred Stock 40.00 % of Investor Supplied Capital

Common Stock 130.00 % of Investor Supplied Capital
Retained Earnings 766.00 % of Investor Supplied Capital
Total Equity 936.00 -

Total Liabilities and Equity 2,000.00 -

Check - -

Investor Supplied Capital 1,800.00

Income Statement 2010 2011

Sales 3,000.00 3,300.00 Sales growth expected of 10%

Costs Except Depreciation 2,616.20 Same % as of 2010 87.21%

Depreciation 100.00 Same % as of 2010 10.00%
Total Costs 2,716.20 -

EBIT 283.80 3,300.00

Interest on Notes 9.90

Interest on Bonds 78.10

EBT 195.80 3,300.00

Taxes (40%) 78.32

Net Income before Preferred Dividends 117.48 3,300.00

Less: Preferred Dividends 4.00

Net Income for Common Shareholders 113.48 3,300.00

Dividends Paid Out 57.50

Addition to Retained Earnings 55.98 3,300.00

Number of Shares 50.00 New Shares would be issued at $23

Earnings per Share 2.35
Dividend per Share 1.15

Financing Structure 2010 2011

Notes Payable 6.11% 6.11%

Bonds 41.89% 41.89%
Preferred Stock 2.22% 2.22%
Common Stock 49.78% 49.78%
Total 100.00% 100.00%

Interest Rates & Payout Ratios 2010 2011

Notes Payable 9.00% 9.00%

Bonds 10.36% 10.36%
Preferred Dividends 10.00% 10.00%
Commnon Stock 50.67% 50.67%

AFN Calculation 2010 2011

A* 2,000.00
So 3,000.00 3,096.29
∆ in Sales 300.00 96.29

Required Assets Increase 200.00

L* 200.00
So 3,000.00
∆ in Sales 300.00

Spontaneous Liability Increase 20.00

M = Profit Margin 3.78%

S1 3,300.00
D=Payout Ratio 50.67%

Increase in Retained Earnings 61.58

Additional Financing Needed 118.42

Self Supporting Growth Rate 2010 2011

M 3.78%
1-POR 49.33%
So 3,000.00
55.98

Ao* 2,000.00
Lo* 200.00
M * (1-POR) * So 55.98
1,744.02
Self Supporting Growth Rate 3.21%
Balance Sheet 2010 2011

Assets

Cash 10.00 10.00 Same

Accounts Receivable 375.00 412.50 Same % of Sales as of 2010 12.50% 412.50
Inventories 615.00 676.50 Same % of Sales as of 2010
Current Assets 1,000.00 1,099.00

Net Plant and Equipment 1,000.00 1,100.00 Same % of Sales as of 2010

Non Current Assets 1,000.00 1,100.00

Total Assets 2,000.00 2,199.00

Liabilities + Equity 1,979.00

Accounts Payable 60.00 66.00 Same % of Sales as of 2010

Accruals 140.00 154.00 Same % of Sales as of 2010
Notes Payable 110.00 120.94 % of Investor Supplied Capital
Current Liabilities 310.00 340.94

Long Term Bonds 754.00 828.98 % of Investor Supplied Capital

Non Current Liabilities 754.00 828.98

Preferred Stock 40.00 43.98 % of Investor Supplied Capital

Common Stock 130.00 157.51 % of Investor Supplied Capital
Retained Earnings 766.00 827.59 % of Investor Supplied Capital concept 2
Total Equity 936.00 1,029.08

Total Liabilities and Equity 2,000.00 2,199.00 985.10

Check - - 1,979.00 concept 1

Investor Supplied Capital 1,800.00 1,979.00

Income Statement 2010 2011

Sales 3,000.00 3,300.00 Sales growth expected of 10%

Costs Except Depreciation 2,616.20 2,877.82 Same % of Sales as of 2010

Depreciation 100.00 110.00 Sames as % of Property Plant
Total Costs 2,716.20 2,987.82

EBIT 283.80 312.18

Interest on Notes 9.90 10.88

Interest on Bonds 78.10 85.87

EBT 195.80 215.43

Taxes (40%) 78.32 86.17

Net Income before Preferred Dividends 117.48 129.26

Less: Preferred Dividends 4.00 4.40

Net Income for Common Shareholders 113.48 124.86

Dividends Paid Out 57.50 63.27

Addition to Retained Earnings 55.98 61.59

Number of Shares 50.00 51.20 New Shares would be issued at $23

Earnings per Share 2.35 2.52
Dividend per Share 1.15 1.24

Financing Structure 2010 2011

Notes Payable 6.11% 6.11% Same

Bonds 41.89% 41.89% Same
Preferred Stock 2.22% 2.22% Same
Common Stock 49.78% 49.78% Same
Total 100.00% 100.00%

Interest Rates & Payout Ratios 2010 2011

Notes Payable 9.00% 9.00%

Bonds 10.36% 10.36%
Preferred Dividends 10.00% 10.00%
Commnon Stock 50.67% 50.67%
Balance Sheet 2010 2011

Assets

Cash 10.00 10.00 Same

Accounts Receivable 375.00 412.50 Same % as of 2010 12.50%
Inventories 615.00 676.50 Same % as of 2010 20.50%
Current Assets 1,000.00 1,099.00

Net Plant and Equipment 1,000.00 1,100.00 Same % as of 2010 33.33%

Non Current Assets 1,000.00 1,100.00

Total Assets 2,000.00 2,199.00

Liabilities + Equity

Accounts Payable 60.00 66.00 Same % as of 2010 2.00%

Accruals 140.00 154.00 Same % as of 2010 4.67%
Notes Payable 110.00 120.94 % of Investor Supplied Capital
Current Liabilities 310.00 340.94

Long Term Bonds 754.00 828.98 % of Investor Supplied Capital

Non Current Liabilities 754.00 828.98

Preferred Stock 40.00 43.98 % of Investor Supplied Capital

Common Stock 130.00 157.51 % of Investor Supplied Capital
Retained Earnings 766.00 827.59 % of Investor Supplied Capital
Total Equity 936.00 1,029.08

Total Liabilities and Equity 2,000.00 2,199.00

Check - -

Investor Supplied Capital 1,800.00 1,979.00

Income Statement 2010 2011

Sales 3,000.00 3,300.00 Sales growth expected of 10%

Costs Except Depreciation 2,616.20 2,877.82 Same % as of 2010 87.21%

Depreciation 100.00 110.00 Same % as of 2010 10.00%
Total Costs 2,716.20 2,987.82

EBIT 283.80 312.18

Interest on Notes 9.90 10.88

Interest on Bonds 78.10 85.87

EBT 195.80 215.43

Taxes (40%) 78.32 86.17

Net Income before Preferred Dividends 117.48 129.26

Less: Preferred Dividends 4.00 4.40

Net Income for Common Shareholders 113.48 124.86

Dividends Paid Out 57.50 63.27

Addition to Retained Earnings 55.98 61.59

Number of Shares 50.00 51.20 New Shares would be issued at $23

Earnings per Share 2.35 2.52
Dividend per Share 1.15 1.24

Financing Structure 2010 2011

Notes Payable 6.11% 6.11%

Bonds 41.89% 41.89%
Preferred Stock 2.22% 2.22%
Common Stock 49.78% 49.78%
Total 100.00% 100.00%

Interest Rates 2010 2011

Notes Payable 9.00% 9.00%

Bonds 10.36% 10.36%
Preferred Dividends 10.00% 10.00%
Commnon Stock 50.67% 50.67%