Table 28 Net Cash Flow to Equity Calculation
As a result of the calculations presented in the above table, the three‐year weighted average of the NCFE that will be capitalized to determine the value of the Company is $862,640.
5.2.2 Discount and Capitalization Rates
Section 6 of Revenue Ruling 59‐60 states in part
In the application of certain fundamental valuation factors, such as earnings and
dividends, it is necessary to capitalize the average or current results at some
6/30/2006
6/30/2005
6/30/2004
3 Year Weighted
Average
Weighting
3 Normalized Proforma Net Income
905,208
$
775,284
$
939,042
$
Plus: Depreciation & Amortization
84,000
$
86,000
$
78,833
$ Anticipated Capital Expenditures
(130,000)
$
(73,000)
$
(171,500)
$ Change to Working Capital
(454,568)
$
(578,167)
$
(315,068)
$ Change to Long Term Debt
359,000
$
328,000
$
331,333
$
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