The following is supporting analysis for Exhibit 12.
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CASH FLOW PROJECTIONS ($000,000)
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Sales growth rate
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7.2%
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Tax rate
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41%
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1989
|
1990
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1991
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1992
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1993
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1994
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1995
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1996
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1997
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1998
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1. Sales
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3,582
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3,840
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4,116
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4,413
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4,730
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5,071
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5,436
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5,828
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6,247
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6,697
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2. Operating margin
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9.20%
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9.30%
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9.40%
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9.50%
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9.60%
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9.70%
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9.80%
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9.90%
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10.00%
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10.10%
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3. Operating earnings (1x2)
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330
|
357
|
387
|
419
|
454
|
492
|
533
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577
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625
|
676
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Plus: other income
|
29
|
29
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29
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29
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29
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29
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29
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29
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29
|
29
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Less: corporate expense
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43
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43
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43
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43
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43
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43
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43
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43
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43
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43
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4. EBIT
|
316
|
343
|
373
|
406
|
440
|
478
|
519
|
563
|
611
|
663
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5. Taxes
|
129
|
140
|
153
|
166
|
180
|
195
|
212
|
230
|
250
|
271
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6. Net income
|
187
|
203
|
221
|
240
|
260
|
283
|
307
|
333
|
361
|
392
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7. Change in NWC
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-
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-
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-
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-
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-
|
40
|
42
|
45
|
49
|
52
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8. Cash flow (6-7)
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187
|
203
|
221
|
240
|
260
|
243
|
265
|
288
|
313
|
340
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Note: The tax rate is the same as in first quarter 1988. Other income and corporate expense is the same as in year ending Feb. 29, 1988. Corporate expense was inferred from Exhibit 8, using interest expense and other income data from Exhibit 7.
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The following compares historical operating results to the projections.
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HISTORICAL
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PROJECTED
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1986
|
1987
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1988
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1989
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1990
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1991
|
1992
|
1993
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1994
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1995
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1996
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1997
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1998
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Net sales
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2,832
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2,947
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3,341
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Operating earnings
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252
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264
|
301
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Operating margin
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8.9%
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9.0%
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9.0%
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Curent assets
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1,216
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1,287
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1,359
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Current liabilities
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250
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358
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373
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Net working capital
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966
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928
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986
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NWC as % of sales
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34%
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32%
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30%
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Cash
|
17
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17
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21
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Marketable securities
|
127
|
64
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11
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NWC less cash and securities
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822
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848
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954
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Adjusted NWC as % of sales
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29%
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29%
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29%
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Sales growth rate
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4.0%
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13.4%
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Net property plant and equipment
|
442
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485
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479
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Change (=investment less depreciation)
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43
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(6)
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-
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-
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-
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-
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-
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-
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-
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-
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-
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-
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