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Free Cash Flow for the Firm

Exhibit 6
Particulars / Year

2007

Consolidated Revenue
Less: Operating Expenses (Including Depreciation)
Less: Corporate Overhead
9
Less: Tax (@ 40%)
Net Profit (PAT)
Add: Estimated Depreciation
Less: Increase / Decrease in Estimated NWC
Less: Estimated Capital Expenditure
Free Cash Flow For The Firm (FCFF)

479329
423837
8487
47005
18802
28203
9587
11084
11983
14723

2008

2009

489028 532137
427333 465110
8659
9422
53036
57605
21214.4 23042
31821.6 34563
9781
10643
2614
9434
12226
13303
26762.6 22469

Industry Performance & Averages


Exhibit 3
Comparable Companies /
Particulars:

Equity Market Value

Net Debt

D/E

Equity
Beta

D&B Shoe Company


Marina Wilderness
General Shoe Corp.
Kinsley Coulter Products
Victory Athletic
Surfside Footwear
Alpine Company
Heartland Outdoor Footware
Templeton Athletic
Average

420098
1205795
533463
165560
35303250
570684
1056033
1454875
397709
4567496

125442
-91559
171835
82236
7653207
195540
300550
-97018
169579
945535

29.9%
-7.6%
32.2%
49.7%
21.7%
34.3%
28.5%
-6.7%
42.6%
24.9%

2.68
1.94
1.92
1.12
0.97
2.13
1.27
1.01
0.98
1.56

Equity Beta
CAPM Ke
WACC

1.60
13%
11.06%

2008

2009

Present Value of FCFF


Particulars / Year

2007

Free Cash Flow For The Firm (FCFF)


WACC
Present Value of FCFF
Year

Present Value

2007
2008

13257.31
21699.32

2009

16404.41

2010

16961.55

2011

17628.78

Net Value

85951.37

Present value of FCFF


Terminal cash flow
Value of the enterprise

85951.37
240293.3498
326244.72

14723
11.06%

26762.6
11.06%

22469
11.06%

Net Working Capital


Exhibit 4&7
2006
2007

2010

2011

Particulars / Year

570319
498535
10098
61686
24674.4
37011.6
11406
8359
14258
25800.6

597717
522522
10583
64612
25844.8
38767.2
11954
5998
14943
29780.2

Current Assets
cash & cash equivalent
Accounts Receivable
Inventory
Prepaid Expenses
Total Current Assets

10676
45910
73149
10172
129231

4161
47888
83770
14474
146132

Current Liabilities
Accounts Payable
Accrued Expenses

16981
18810

18830
22778

Total Current Liabilities

35791

41608

Net Working Capital


Increase / Decrease

93440
0

104524
11084

1.28
0
5%
4.93%

20 years

rages
Equity /
Value

Debt /
Value

Asse
t
Beta

77.0%
108.2%
75.6%
66.8%
82.2%
74.5%
77.8%
107.1%
70.1%
82.2%

23.0%
-8.2%
24.4%
33.2%
17.8%
25.5%
22.2%
-7.1%
29.9%
17.8%

2.06
2.10
1.45
0.75
0.80
1.59
0.99
1.08
0.69
1.28

2010

2011

Assumptions

Asset Beta
Debt Beta
Risk Premium
Risk Free Rate
Given
Tax Rate
Cost of Debt
Debt to Value Ratio

40%
6%
20%

25800.6 29780.2
11.06% 11.06%
Projected Balance Sheet
Particulars

2007

2008

Total Assets

283374

288810

Total Current & NonCurrent Liabilities

62342

62685

Owner's Equity
(Balancing Figure)

221032

226125

ROC

12.76%

14.07%

Reinvestment
NOPAT
Reinvestment rate
Reinvestment capital
ROC
Exp Growth rate

8987
38767.2
0.23182
259352
0.14948
0.03465

Net Working Capital


2008

2009

2010

2011

4195
48857
85465
14767
149089

4566
53164
92999
16069
162232

4894
5130
56978 59715
99672 104460
17222 18049
173872 182224

18985
22966

20664
24996

22149
26792

23214
28081

41951

45660

48941

51295

107138
2614

116572
9434

124931 130929
8359
5998

ected Balance Sheet


2009

2010

2011

304984

319804

331381

66394

69675

72029

238590

250129

259352

14.49%

14.80%

14.95%

Free Cash Flow for the Firm


exhibit 6
Particulars / Year
Consolidated Revenue
Less: Operating Expenses (Including Depreciation)
Less: Corporate Overhead
Consolidated Operating Income (EBIT / EBT)
Less: Tax (@ 40%)
Net Profit (PAT)
Add: Estimated Depreciation
Less: Increase / Decrease in Estimated NWC
Less: Estimated Capital Expenditure
Free Cash Flow For The Firm (FCFF)

2007

2008

2009

2010

479329
423837
8487
47005
18802
28203
9587
4569
11983
21238

489028
427333
8659
53036
21214.4
31821.6
9781
2648
12226
26728.6

532137
465110
9422
57605
23042
34563
10643
9805
13303
22098

570319
498535
10098
61686
24674.4
37011.6
11406
8687
14258
25472.6

Industry Performance & Averages


Exhibit 3
Comparable Companies /
Equity Market Value Net Debt
Particulars:
D&B Shoe Company
Marina Wilderness
General Shoe Corp.
Kinsley Coulter Products
Victory Athletic
Surfside Footwear
Alpine Company
Heartland Outdoor Footware
Templeton Athletic
Average

420098
1205795
533463
165560
35303250
570684
1056033
1454875
397709
4567496

125442
-91559
171835
82236
7653207
195540
300550
-97018
169579
945535

D/E

29.9%
-7.6%
32.2%
49.7%
21.7%
34.3%
28.5%
-6.7%
42.6%
24.9%

Equity Equity /
Beta
Value
2.68
1.94
1.92
1.12
0.97
2.13
1.27
1.01
0.98
1.56

77.0%
108.2%
75.6%
66.8%
82.2%
74.5%
77.8%
107.1%
70.1%
82.2%

2011

Particulars / Year

597717
522522
10583
64612
25844.8
38767.2
11954
6234
14943
29544.2

Current Assets
cash & cash equivalent
Accounts Receivable
Inventory
Prepaid Expenses
Total Current Assets
Current Liabilities
Accounts Payable
Accrued Expenses

Asset
Beta

23.0%
-8.2%
24.4%
33.2%
17.8%
25.5%
22.2%
-7.1%
29.9%
17.8%

2.06
2.10
1.45
0.75
0.80
1.59
0.99
1.08
0.69
1.28

2009

10676
4161
4195
4566
45910
47888
48857
53164
73149
83770
85465
92999
10172
14474
14767
16069
139907 150293 153284 166798

16981
18810

18830
22778

18985
22966

20664
24996

Total Current Liabilities 35791

41608

41951

45660

Net Working Capital


Increase / Decrease

Debt /
Value

Net Working Capital


Exhibit 4
2006
2007
2008

104116 108685 111333 121138


0
4569
2648
9805

Assumptions

Asset Beta
Debt Beta
Risk Premium
Risk Free Rate

1.28
0
5%
4.93%

Given
Tax Rate
Cost of Debt
Debt to Value Ratio

40%
6%
20%

20 years

2010

2011

4894
5130
56978
59715
99672 104460
17222
18049
178766 187354

22149
26792

23214
28081

48941

51295

129825 136059
8687
6234