M Balance Sheet and P&L statement Sales growth 10% Current assets/Sales 20% Current liabilities/Sales 15% Net fixed assets/Sales 320% Costs of goods sold/Sales 50% Depreciation rate 5% Interest eamed on cash balances 5% Tax rate 40% This sheet presents ABC Inc.'s base year (year 0) balance sheet, income statement and assumptions on financial rations/items. a) Use the data to project the financial statements for year 1. b) Extend the model to 5 years and calculate free cash flows for each year. 0 Year Income statement Sales Costs of goods sold Depreciation Interest eamed on cash Profit before tax Taxes Profit after tax Retained eamings 50,000 (25,000) (20,000) 7,000 12,000 (4,800) 7,200 7,200 140,000 10,000 Balance sheet Cash Current assets Fixed assets At cost Depreciation Net fixed assets Total assets 400,000 (240,000) 160,000 310,000 20,000 Current liabilities Debt Stock Accumulated retained eamings Total liabilities and equity 275,000 15,000 310,000 M Balance Sheet and P&L statement Sales growth 10% Current assets/Sales 20% Current liabilities/Sales 15% Net fixed assets/Sales 320% Costs of goods sold/Sales 50% Depreciation rate 5% Interest eamed on cash balances 5% Tax rate 40% This sheet presents ABC Inc.'s base year (year 0) balance sheet, income statement and assumptions on financial rations/items. a) Use the data to project the financial statements for year 1. b) Extend the model to 5 years and calculate free cash flows for each year. 0 Year Income statement Sales Costs of goods sold Depreciation Interest eamed on cash Profit before tax Taxes Profit after tax Retained eamings 50,000 (25,000) (20,000) 7,000 12,000 (4,800) 7,200 7,200 140,000 10,000 Balance sheet Cash Current assets Fixed assets At cost Depreciation Net fixed assets Total assets 400,000 (240,000) 160,000 310,000 20,000 Current liabilities Debt Stock Accumulated retained eamings Total liabilities and equity 275,000 15,000 310,000