1. Year 1998 1999 2000 2001
Revenue 2% $8,500 $15,000 $35,500 $46,000
COGS 41% $3,200 $5,600 $14,000 $18,100
Gross
Profit $5,300 $9,400 $21,500 $27,900
SG&A 12% $3,406 $5,204 $6,100 $4,900
EBITDA $1,894 $4,196 $15,400 $23,000
Depreciation 1% $94 $206 $300 $400
R&D Expense 12% $1,100 $2,800 $4,100 $5,400
EBIT
$700 $1,190 $11,000 $17,200
Tax 35% $245 $417 $3,850 $6,020
NOPAT $455 $774 $7,150 $11,180
Plus Depreciation $94 $206 $300 $400
Minus Δ in inventory $400 $300 $1,050 $513
Minus Δ in AR $1,417 $1,083 $3,417 $1,750
Plus Δ in AP $533 $400 $1,400 $684
Minus CAPEX $1,000 1,600$ 1,200$ 3,200$
uFCFF ($1,735) ($1,604) $3,183 $6,801
TV 4.0x $0 $0 $0 $0
uFCFF+TV ($1,735) ($1,604) $3,183 $6,801
IFV 25% $34,046
Plus
PV
Interest
Tax
Shield10% $0
Minus
Debt $0
IEV $34,046
uFCFF ($1,735) ($1,604) $3,183 $6,801
Minus
Principal
Payments $0 $0 $0 $850
Minus
interests $0 $0 $0 $200
Plus
Interest
Tax
Shield $0 $0 $0 $602
Plus
Loans $0 $0 $0 $2,000
FCFE ($1,735) ($1,604) $3,183 $8,353
Initial
Cash
Balance $1,000 ($735) ($2,339) $845
Ending
Cash
Balance ($735) ($2,339) $845 $7,646
Inventories 400$ 700$ 1,750$ 2,263$
300$ 1,050$ 513$
Accounts Receivable 1,417$ 2,500$ 5,917$ 7,667$
1,083$ 3,417$ 1,750$
Accounts Payable 533$ 933$ 2,333$ 3,017$
400$ 1,400$ 684$
Capex 1,000$ 2,600$ 3,800$ 5,000$
1,600$ 1,200$ 1,200$

2. 2,000$
Initial Debt Balance $17,000 $0 $0 $0 $2,000
Principal Payments 20 $0 $0 $0 $850
Ending Debt Balance $0 $0 $0 $1,150
Interest Paid 10% $0 $0 $0 $200
Interest Tax Shield $0 $0 $0.00 $602.00

3. 2002 2003 2004 2005 2006 2007 2008
$52,000 $60,000 $61,200 $62,424 $63,672 $64,946 $66,245
$20,100 $24,500 $24,990 $25,490 $26,000 $26,520 $27,050
$31,900 $35,500 $36,210 $36,934 $37,673 $38,426 $39,195
$6,800 $7,200 $7,344 $7,491 $7,641 $7,794 $7,949
$25,100 $28,300 $28,866 $29,443 $30,032 $30,633 $31,245
$500 $600 $612 $624 $637 $649 $662
$6,500 $7,000 $7,344 $7,491 $7,641 $7,794 $7,949
$18,100 $20,700 $20,910 $21,328 $21,755 $22,190 $22,634
$6,335 $7,245 $7,319 $7,465 $7,614 $7,766 $7,922
$11,765 $13,455 $13,592 $13,863 $14,141 $14,423 $14,712
$500 $600 $612 $624 $637 $649 $662
$250 $550 $61 $62 $64 $65 $66
$1,000 $1,333 $200 $204 $208 $212 $216
$333 $733 $82 $83 $85 $87 $88
5,800$ 10,800$ 132$ 135$ 137$ 140$ 143$
$5,548 $2,105 $13,892 $14,170 $14,453 $14,742 $15,037
$0 $113,200 $0 $0 $0 $0 $124,982
$5,548 $115,305 $13,892 $14,170 $14,453 $14,742 $140,019
$79,502
$3,776
$17,000
$66,279
$5,548 $2,105 $13,892 $14,170 $14,453 $14,742 $15,037
$1,700 $1,700 $2,550 $2,550 $2,550 $2,550 $2,550
$615 $1,445 $1,275 $1,020 $765 $510 $255
$634 $725 $732 $746 $761 $777 $792
$5,000 $10,000 $0 $0 $0 $0 $0
$8,867 $9,685 $10,799 $11,346 $11,900 $12,459 $13,024
$7,646 $13,194 $15,299 $29,191 $43,360 $57,814 $72,556
$13,194 $15,299 $29,191 $43,360 $57,814 $72,556 $87,593
2,513$ 3,063$ 3,124$ 3,187$ 3,250$ 3,315$ 3,382$ 45 days
250$ 550$ 61$ 62$ 64$ 65$ 66$
8,667$ 10,000$ 10,200$ 10,404$ 10,612$ 10,824$ 11,041$ 60 days
1,000$ 1,333$ 200$ 204$ 208$ 212$ 216$
3,350$ 4,083$ 4,165$ 4,248$ 4,333$ 4,420$ 4,508$ 60 days
333$ 733$ 82$ 83$ 85$ 87$ 88$
5,800$ 6,600$ 6,732$ 6,867$ 7,004$ 7,144$ 7,287$
800$ 800$ 132$ 135$ 137$ 140$ 143$

4. 5,000$ 10,000$
$6,150 $14,450 $12,750 $10,200 $7,650 $5,100 $2,550
$1,700 $1,700 $2,550 $2,550 $2,550 $2,550 $2,550
$4,450 $12,750 $10,200 $7,650 $5,100 $2,550 $0
$615 $1,445 $1,275 $1,020 $765 $510 $255
$634 $725 $732 $746 $761 $777 $792

5. Balance Sheet
Assets:
Cash 1,000$ 1,000$ 4,793$ 13,907$
Accounts Receivable 1,417$ 2,500$ 5,917$ 7,667$
Inventories 400$ 700$ 1,750$ 2,263$
Other 354$ 625$ 1,479$ 1,917$
Current Assets 3,171$ 4,825$ 13,939$ 25,754$
Fixed Assets 1,000$ 2,600$ 3,800$ 5,000$
Accumulated Dep. 94$ 300$ 600$ 1,000$
Net Fixed Assets 906$ 2,300$ 3,200$ 4,000$
TOTAL ASSETS 4,077$ 7,125$ 17,139$ 29,754$
Liabilities and Shareholder's equity:
Accounts Payable 533$ 933$ 2,333$ 3,017$
Accrued Expenses 607$ 1,071$ 2,536$ 3,287$
Current Liabilities 1,140$ 2,004$ 4,869$ 6,304$
Equity 2,936$ 5,120$ 12,270$ 23,450$
TOTAL LIABILITIES AND EQUITY 4,077$ 7,125$ 17,139$ 29,754$

7. 5%
2004 2005 2006
24,699$ 37,042$
8,667$ 10,000$
2,513$ 3,063$
2,167$ 2,500$
38,046$ 52,605$
5,800$ 6,600$
1,500$ 2,100$
4,300$ 4,500$
42,346$ 57,105$
3,350$ 4,083$
3,716$ 4,287$
7,066$ 8,370$
35,280$ 48,735$
42,346$ 57,105$