Woof Junction Inc.

2011 2012 2013 2014 2015

Balance Sheet
ASSETS 2011 2012 2013 2014 2015
Cash and Equivalents $ 32 $ 46 $ 38 $ 67 $ 193
Accounts Receivable, Net 9 6 6 10 8
Inventory 195 193 244 248 314
Other Current Assets 23 13 29 40 51
Total Current Assets 259 258 317 365 566
Gross PP&E 234 286 352 528 738
Accumulated Depreciation 77 95 114 144 190
Net PP&E 157 191 238 384 548
Intangible Assets 18 32 25 28 33
Total Assets $ 434 $ 481 $ 580 $ 777 $ 1,147

LIABILITIES & EQUITY 2011 2012 2013 2014 2015

Accounts Payable $ 68 $ 81 $ 94 $ 115 $ 158
Taxes Payable 6 15 15 33 32
Other Current Liabilities 48 54 75 103 137
Total Current Liabilities 122 150 184 251 327
Long-term Debt 19 22 21 18 81
Other Liabilities 20 33 37 42 62
Total Liabilities 161 205 242 311 470
Total Stockholder's Equity 273 276 338 466 677
Total Liabilities and Equity $ 434 $ 481 $ 580 $ 777 $ 1,147

Income Statement 2011 2012 2013 2014 2015

Sales $ 1,062 $ 1,252 $ 1,587 $ 1,934 $ 2,519
Cost of Goods Sold 654 814 1,009 1,190 1,499
Gross Profit 408 438 578 744 1,020
Selling, General, and Admin Exp 254 271 364 454 576
Operating Income before Depr 154 167 214 290 444
Depreciation and Amortization 25 31 38 52 70
Operating Profit 129 136 176 238 374
Interest Expense 4 3 3 1 4
Other Gains and Losses 0 7 10 0 (1)
Pretax Income 125 126 163 237 371
Income Tax Expense 55 52 65 92 141
Net Income $ 70 $ 74 $ 98 $ 145 $ 230
 Ratios

Woof Junction Ooh La Lab Specialty Pet Retail Group

Ratio Analysis 2012 2013 2014 2015 Avg 2012 2013 2014 2015 Avg 2012 2013 2014 2015 Avg

Return on Equity 27.0% 31.9% 36.1% 40.2% 33.8% 29.3% 31.7% 28.5% 23.5% 28.3% 23.0% 22.6% 21.1% 19.6% 21.6% Return on Equity = Net Income / Avg. Stockholders' Equity

Return on Assets 16.6% 18.8% 21.5% 24.2% 20.3% 15.2% 16.7% 16.3% 14.0% 15.6% 13.4% 13.1% 12.2% 11.4% 12.5% Return on Assets = De-levered Net Income / Avg. Total Assets
Financial Leverage 1.67 1.73 1.69 1.68 1.69 2.23 2.09 1.89 1.83 2.01 1.86 1.87 1.89 1.87 1.87 Financial Leverage = Avg. Total Assets / Avg. Stockholders Equity
Correction Factor 0.98 0.98 1.00 0.99 0.99 0.87 0.91 0.92 0.91 0.90 0.92 0.92 0.92 0.92 0.92 Correction Factor = Net Income / De-levered Net Income

Return on Assets
Return on Sales 6.1% 6.3% 7.5% 9.2% 7.3% 6.8% 8.0% 8.0% 7.0% 7.5% 6.1% 6.0% 5.7% 5.3% 5.8% Return on Sales = De-levered Net Income / Sales
Asset turnover 2.74 2.99 2.85 2.62 2.80 2.23 2.08 2.03 2.00 2.08 2.19 2.18 2.15 2.14 2.16 Asset turnover = Sales / Avg. Total Assets

Profitability
Gross margin 35.0% 36.4% 38.5% 40.5% 37.6% 34.6% 36.0% 36.0% 34.2% 35.2% 36.8% 37.0% 36.5% 36.2% 36.6% Gross Margin = (Sales - Cost of Goods Sold) / Sales
SG&A as % of Sales 21.6% 22.9% 23.5% 22.9% 22.7% 20.0% 19.4% 19.6% 19.3% 19.6% 25.3% 25.1% 25.3% 25.2% 25.2% SG&A as a % of Sales = SG&A Expense / Sales
Operating Margin 10.9% 11.1% 12.3% 14.8% 12.3% 11.2% 13.2% 13.0% 11.3% 12.2% 9.1% 9.4% 8.7% 8.4% 8.9% Operating Margin = Operating Income / Sales
Interest Expense as % of Sales 0.2% 0.2% 0.1% 0.2% 0.2% 1.1% 1.3% 1.4% 1.6% 1.4% 2.1% 1.9% 2.2% 2.4% 2.2% Interest Expense as % of Sales = Interest Expense / Sales
Effective Tax Rate 41.3% 39.9% 38.8% 38.0% 39.5% 36.8% 39.5% 34.2% 40.1% 37.7% 38.1% 38.3% 38.4% 38.3% 38.3% Effective Tax Rate = Income Taxes / Pre-tax Income

Asset Turnover Ratios

Accounts Receivable Turnover 166.9 264.5 241.8 279.9 238.3 13.3 8.4 8.5 8.9 9.8 17.6 14.6 14.8 15.3 15.6 Accounts Receivables Turnover = Sales / Avg. Accounts Receivable
Inventory Turnover 4.2 4.6 4.8 5.3 4.7 7.1 6.8 6.4 6.3 6.7 4.6 4.6 4.6 4.5 4.6 Inventory Turnover = Cost of Goods Sold / Avg. Inventory
Accounts Payable Turnover 10.9 12.1 11.4 11.5 11.5 14.3 13.1 12.9 13.2 13.4 15.2 14.9 15.4 16.2 15.4 Accounts Payable Turnover = Purchases / Avg. Accounts Payable
Fixed Asset Turnover 7.2 7.4 6.2 5.4 6.6 4.3 4.6 4.1 4.3 4.3 9.8 11.1 10.9 10.5 10.6 Fixed Asset Turnover = Sales / Avg. Net Property, Plant and Equipment

Days Turnover Ratios

Days Receivables 2.2 1.4 1.5 1.3 1.6 27.5 43.3 43.0 40.9 38.7 20.7 25.1 24.6 23.8 23.6 Days Receivables = 365 * (Avg. Accounts Receivable / Sales)
Days Inventory 87.0 79.0 75.5 68.4 77.5 51.1 53.4 56.6 58.1 54.8 78.9 79.2 80.1 81.9 80.0 Days Inventory = 365 * (Avg. Inventory / Cost of Goods Sold)
Days Payables 33.5 30.1 31.9 31.8 31.8 25.5 27.9 28.3 27.7 27.3 24.0 24.5 23.7 22.5 23.7 Days Payable = 365 * (Avg. Accounts Payable / Purchases)
Net Trade Cycle 55.7 50.3 45.0 37.9 47.2 53.1 68.8 71.3 71.3 66.1 75.7 79.8 81.0 83.2 79.9 Net Trade Cycle = Days Receivable + Days Inventory - Days Payable

Liquidity Analysis
Current Ratio 1.72 1.72 1.45 1.73 1.66 1.63 1.92 1.77 1.59 1.73 1.01 1.21 0.99 1.12 1.08 Current Ratio = Current Assets / Current Liabilities
Quick Ratio 0.35 0.24 0.31 0.61 0.38 0.23 0.26 0.22 0.19 0.23 0.11 0.13 0.09 0.13 0.12 Quick Ratio = (Cash + Accts Rec) / Current Liabilities
CFO-to-Current Liabilities 1.18 0.64 1.15 1.11 1.02 0.93 0.86 1.01 1.11 0.98 0.87 0.98 0.76 0.86 0.87 CFO-to-Current Liabilities = Cash from Operations / Avg. Current Laibilities

Interest Coverage 55.67 71.33 290.00 111.00 132.00 6.55 7.08 6.43 4.56 6.15 2.43 2.84 2.14 1.83 2.31 Interest Coverage = Operating Income before Depreciation / Interest Expense
Cash Interest Coverage 52.50 57.67 161.50 154.67 106.58 5.12 6.56 5.99 4.59 5.57 2.54 2.43 2.31 1.76 2.26 Cash Interest Coverage = (Cash from Operations + Cash Interest + Cash Taxes) / Cash Interest Paid

Debt to Equity 0.74 0.72 0.67 0.69 0.71 1.21 1.34 1.41 1.53 1.37 1.43 1.56 1.78 1.89 1.67 Debt to Equity = Total Liabilities / Total Stockholders Equity
Long-Term-Debt to Equity 0.08 0.06 0.04 0.12 0.08 0.53 0.58 0.67 0.71 0.62 0.67 0.78 0.86 0.95 0.82 Long-Term-Debt to Equity = Total Long-Term Debt / Total Stockholders Equity
Long-Term Debt to Tangible Assets 0.05 0.04 0.02 0.07 0.05 0.43 0.48 0.51 0.54 0.49 0.54 0.69 0.77 0.81 0.70 Long-Term Debt to Tangible Assets = Total Long-Term Debt / (Total Assets - Intangible Assets)

Other Information
Sales Growth 17.9% 26.8% 21.9% 30.2% 24.2% 14.9% 14.3% 13.2% 16.8% 14.8% 14.3% 13.3% 13.2% 15.1% 14.0% Sales Growth = Change in Sales / Prior Year Sales
Statutory Tax Rate 38.0% 38.0% 38.0% 38.0% 38.0% 38.0% 38.0% 38.0% 38.0% 38.0% 38.4% 38.6% 38.5% 38.3% 38.5% Federal Statutory Rate + State and Foreign Statutory Rates (excludes permanent differences)
De-levered Net Income $ 76 $ 100 $ 146 $ 232 De-levered Net Income = Net Income + (Interest Exp. * (1 - Statutory Tax Rate))
Purchases $ 812 $ 1,060 $ 1,194 $ 1,565 Purchases = Ending Inventory + COGS Beginning Inventory
Weighted Avg Depreciation Rate 10.9% 10.9% 11.1% 10.6% 10.9% Weighted Avg Depreciation Rate = Depreciation & Amortization / (Avg. Gross PP&E + Avg. Intangible Assets)
Weighted Avg Interest Rate 14.6% 14.0% 5.1% 8.1% 10.4% Weighted Avg Interest Rate = Interest Expense / Avg. Long-Term Debt

Other Ratios
Sales Growth 0.17891 0.26757 0.21865 0.30248 0.2419
Sales per Square Foot 389 438 481 436

Page 2
Woof Junction Inc. 2011 2012 2013 2014 2015
Balance Sheet
ASSETS 2011 2012 2013 2014 2015
Cash and Equivalents 0.07 0.10 0.07 0.09 0.17
Accounts Receivable, Net 0.02 0.01 0.01 0.01 0.01
Inventory 0.45 0.40 0.42 0.32 0.27
Other Current Assets 0.05 0.03 0.05 0.05 0.04
Total Current Assets 0.60 0.54 0.55 0.47 0.49
Gross PP&E 0.54 0.59 0.61 0.68 0.64
Accumulated Depreciation 0.18 0.20 0.20 0.19 0.17
Net PP&E 0.36 0.40 0.41 0.49 0.48
Intangible Assets 0.04 0.07 0.04 0.04 0.03
Total Assets 1.00 1.00 1.00 1.00 1.00

LIABILITIES & EQUITY 2011 2012 2013 2014 2015

Accounts Payable 0.16 0.17 0.16 0.15 0.14
Taxes Payable 0.01 0.03 0.03 0.04 0.03
Other Current Liabilities 0.11 0.11 0.13 0.13 0.12
Total Current Liabilities 0.28 0.31 0.32 0.32 0.29
Long-term Debt 0.04 0.05 0.04 0.02 0.07
Other Liabilities 0.05 0.07 0.06 0.05 0.05
Total Liabilities 0.37 0.43 0.42 0.40 0.41
Total Stockholder's Equity 0.63 0.57 0.58 0.60 0.59
Total Liabilities and Equity 1.00 1.00 1.00 1.00 1.00

Income Statement 2011 2012 2013 2014 2015

Sales 1.00 1.00 1.00 1.00 1.00
Cost of Goods Sold 0.62 0.65 0.64 0.62 0.60
Gross Profit 0.38 0.35 0.36 0.38 0.40
Selling, General, and Admin Exp 0.24 0.22 0.23 0.23 0.23
Operating Income before Depr 0.15 0.13 0.13 0.15 0.18
Depreciation and Amortization 0.02 0.02 0.02 0.03 0.03
Operating Profit 0.12 0.11 0.11 0.12 0.15
Interest Expense 0.00 0.00 0.00 0.00 0.00
Other Gains and Losses 0.00 0.01 0.01 0.00 0.00
Pretax Income 0.12 0.10 0.10 0.12 0.15
Income Tax Expense 0.05 0.04 0.04 0.05 0.06
Net Income 0.07 0.06 0.06 0.07 0.09
Avg

Avg
0.10
0.01
0.37
0.05
0.53
0.61
0.18
0.43
0.04
1.00

Avg
0.15
0.03
0.12
0.30
0.04
0.06
0.40
0.60
1.00

Avg
1.00
0.62
0.38
0.23
0.15
0.03
0.12
0.00
0.00
0.12
0.05
0.07
 Assumptions Underlying The Forecasting Analysis

Woof Junction Inc. 1 2 3 4 5 6 7 8 9 10

Assumptions for Projected Fin Stmts 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

I/S Projection Assumptions

Sales growth Historical avg. growth for 5 years, then industry avg. 0.242 0.242 0.242 0.242 0.242 0.050 0.050 0.050 0.050 0.050
Cost of goods sold Historical average ratio of cgs / sales (common size IS) 0.622 0.622 0.622 0.622 0.622 0.622 0.622 0.622 0.622 0.622
Selling, General, and Admin Exp Historical avg. ratio of sg&a / sales (common size IS) 0.230 0.230 0.230 0.230 0.230 0.230 0.230 0.230 0.230 0.230
Depreciation and Amortization Historical avg. depreciation rate of avg. gross pp&e 0.109 0.109 0.109 0.109 0.109 0.109 0.109 0.109 0.109 0.109
Interest Expense Forecasted interest rate (2015) 0.081 0.081 0.081 0.081 0.081 0.081 0.081 0.081 0.081 0.081
Other Gains and Losses Historical avg. ratio of G&L / sales (common size IS) 0.002 0.002 0.002 0.002 0.002 0.002 0.002 0.002 0.002 0.002
Income Tax Expense Historical statutory income tax rate 0.380 0.380 0.380 0.380 0.380 0.380 0.380 0.380 0.380 0.380

B/S Projection Assumptions

Cash and Equivalents Historical average ratio of account / TA (common size BS) 0.098 0.098 0.098 0.098 0.098 0.098 0.098 0.098 0.098 0.098
Accounts Receivable, Net Historical average ratio of account / TA (common size BS) 0.013 0.013 0.013 0.013 0.013 0.013 0.013 0.013 0.013 0.013
Inventory Historical average ratio of account / TA (common size BS) 0.373 0.373 0.373 0.373 0.373 0.373 0.373 0.373 0.373 0.373
Other Current Assets Historical average ratio of account / TA (common size BS) 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.045
Gross PP&E Historical average ratio of account / TA (common size BS) 0.613 0.613 0.613 0.613 0.613 0.613 0.613 0.613 0.613 0.613
Accumulated Depreciation Historical average ratio of account / TA (common size BS) 0.184 0.184 0.184 0.184 0.184 0.184 0.184 0.184 0.184 0.184
Intangible Assets Historical average ratio of account / TA (common size BS) 0.043 0.043 0.043 0.043 0.043 0.043 0.043 0.043 0.043 0.043
Total asset turnover Historical average 2.799 2.799 2.799 2.799 2.799 2.799 2.799 2.799 2.799 2.799

Accounts Payable Historical average ratio of account / TA (common size BS) 0.155 0.155 0.155 0.155 0.155 0.155 0.155 0.155 0.155 0.155
Taxes Payable Historical average ratio of account / TA (common size BS) 0.028 0.028 0.028 0.028 0.028 0.028 0.028 0.028 0.028 0.028
Other Current Liabilities Historical average ratio of account / TA (common size BS) 0.121 0.121 0.121 0.121 0.121 0.121 0.121 0.121 0.121 0.121
Long-term Debt 2015 ratio of debt / TA (common size BS) 0.071 0.071 0.071 0.071 0.071 0.071 0.071 0.071 0.071 0.071
Other Liabilities Historical average ratio of account / TA (common size BS) 0.057 0.057 0.057 0.057 0.057 0.057 0.057 0.057 0.057 0.057
Total equities Plug (TA - TL)

Supplemental Calculations
Calculation of smoothed total assets
Average total assets (initial est) $ 1,118 $ 1,388 $ 1,724 $ 2,141 $ 2,658 $ 2,791 $ 2,931 $ 3,077 $ 3,231 $ 3,393
Ending total assets (initial est) $ 1,147 $ 1,088 $ 1,688 $ 1,760 $ 2,522 $ 2,795 $ 2,787 $ 3,074 $ 3,081 $ 3,382 $ 3,404
Annual compound growth rate 0.18 0.05
Growth rate in total assets 0.18 0.18 0.18 0.18 0.18 0.05 0.05 0.05 0.05 0.05
Ending total assets (final est) $ 1,147 $ 1,357 $ 1,605 $ 1,899 $ 2,247 $ 2,658 $ 2,791 $ 2,931 $ 3,077 $ 3,231 $ 3,393
Average total assets (final est) $ 1,252 $ 1,481 $ 1,752 $ 2,073 $ 2,453 $ 2,725 $ 2,861 $ 3,004 $ 3,154 $ 3,312

Accumulated depreciation
Beginning balance 77 95 114 144 190 250 296 350 415 490 515 541 568 596
+ Depreciation expense 31 38 52 70 85 99 117 138 163 182 191 200 210 221
- Ending balance (95) (114) (144) (190) (250) (296) (350) (415) (490) (515) (541) (568) (596) (626)
Retirements (plug) 13 19 22 24 25 53 63 74 88 157 165 173 182 191

Gross PP&E
Ending balance 286 352 528 738 831 984 1,164 1,377 1,629 1,710 1,796 1,886 1,980 2,079
+ Retirements 13 19 22 24 25 53 63 74 88 157 165 173 182 191
- Beginning balance (234) (286) (352) (528) (738) (831) (984) (1,164) (1,377) (1,629) (1,710) (1,796) (1,886) (1,980)
Net Purchases (plug) 65 85 198 234 118 205 243 287 340 239 250 263 276 290

Dividends and Repurchases (net of stock issues)

Beginning balance Stockholders' Equity 273 276 338 466 677 771 913 1,080 1,277 1,511 1,587 1,666 1,749 1,837
+ Net Income 74 98 145 230 225 284 357 448 562 583 612 643 675 709
- Ending balance Stockholders' Equity (276) (338) (466) (677) (771) (913) (1,080) (1,277) (1,511) (1,587) (1,666) (1,749) (1,837) (1,929)
Dividends and net share repurchases (plug) 71 36 17 19 131 143 190 250 328 508 533 560 588 617

Page 5
Woof Junction Inc. 1 2 3 4 5
Projected Fin Stmts 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

ASSETS
Cash and Equivalents $ 32 $ 46 $ 38 $ 67 $ 193 $ 133 $ 157 $ 186 $ 220 $ 260
Accounts Receivable, Net 9 6 6 10 8 17 20 24 28 34
Inventory 195 193 244 248 314 506 599 708 838 991
Other Current Assets 23 13 29 40 51 61 73 86 102 120
Total Current Assets 259 258 317 365 566 717 849 1,004 1,188 1,405
Gross PP&E 234 286 352 528 738 831 984 1,164 1,377 1,629
Accumulated Depreciation 77 95 114 144 190 250 296 350 415 490
Net PP&E 157 191 238 384 548 581 687 813 962 1,138
Intangible Assets 18 32 25 28 33 59 69 82 97 115
Total Assets $ 434 $ 481 $ 580 $ 777 $ 1,147 $ 1,357 $ 1,605 $ 1,899 $ 2,247 $ 2,658

LIABILITIES & EQUITY

Accounts Payable $ 68 $ 81 $ 94 $ 115 $ 158 $ 210 $ 248 $ 294 $ 347 $ 411
Taxes Payable 6 15 15 33 32 38 45 54 63 75
Other Current Liabilities 48 54 75 103 137 164 194 230 272 321
Total Current Liabilities 122 150 184 251 327 412 488 577 682 807
Long-term Debt 19 22 21 18 81 96 113 134 159 188
Other Liabilities 20 33 37 42 62 78 92 109 129 152
Total Liabilities 161 205 242 311 470 586 693 820 970 1,147
Total Stockholder's Equity 273 276 338 466 677 771 913 1,080 1,277 1,511
Total Liabilities and Equity $ 434 $ 481 $ 580 $ 777 $ 1,147 $ 1,357 $ 1,605 $ 1,899 $ 2,247 $ 2,658

INCOME STATEMENT 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Sales $ 1,062 $ 1,252 $ 1,587 $ 1,934 $ 2,519 $ 3,128 $ 3,885 $ 4,825 $ 5,992 $ 7,442
Cost of Goods Sold 654 814 1,009 1,190 1,499 1,947 2,418 3,003 3,730 4,632
Gross Profit 408 438 578 744 1,020 1,181 1,467 1,822 2,262 2,810
Selling, General, and Admin Exp 254 271 364 454 576 719 892 1,108 1,376 1,709
Operating Income before Depr 154 167 214 290 444 463 575 714 886 1,101
Depreciation and Amortization 25 31 38 52 70 85 99 117 138 163
Operating Profit 129 136 176 238 374 377 476 597 748 937
Interest Expense 4 3 3 1 4 7 8 10 12 14
Other Gains and Losses 0 7 10 0 (1) 7 9 11 14 17
Pretax Income 125 126 163 237 371 363 458 576 722 906
Income Tax Expense 55 52 65 92 141 138 174 219 275 344
Net Income $ 70 $ 74 $ 98 $ 145 $ 230 $ 225 $ 284 $ 357 $ 448 $ 562
STATEMENT OF CASH FLOWS 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Operations
Net Income $ 74 $ 98 $ 145 $ 230 $ 225 $ 284 $ 357 $ 448 $ 562
Depreciation and Amortization 31 38 52 70 85 99 117 138 163
Other Gains and Losses 7 10 0 (1) 7 9 11 14 17
Chg. in Accounts Receivable, Net 3 0 (4) 2 (9) (3) (4) (4) (5)
Chg. in Inventory 2 (51) (4) (66) (192) (93) (110) (130) (153)
Chg. in Other Current Assets 10 (16) (11) (11) (10) (11) (13) (16) (19)
Chg. in Accounts Payable 13 13 21 43 52 38 45 54 64
Chg. in Taxes Payable 9 0 18 (1) 6 7 8 10 12
Chg. in Other Current Liabilities 6 21 28 34 27 30 36 42 50
Chg. in Other Liabilities 6 (6) 5 21 9 5 6 6 6
Net Cash from Operations 161 107 250 321 200 366 453 562 696

Investing
Acquisition of PP&E (65) (85) (198) (234) (118) (205) (243) (287) (340)
Change in Other Assets (14) 7 (3) (5) (26) (11) (13) (15) (18)
Net Cash from Investing Activities (79) (78) (201) (239) (144) (216) (255) (302) (357)

Financing
Net Proceeds from Issuing Debt 3 (1) (3) 63 15 18 21 25 29
Dividends (71) (36) (17) (19) (131) (143) (190) (250) (328)
Net Cash from Financing Activities (68) (37) (20) 44 (116) (125) (169) (226) (299)

Change in cash 14 (8) 29 126 (60) 24 29 34 40

Change in cash (BS) 14 (8) 29 126 (60) 24 29 34 40

 6 7 8 9 10
2021 2022 2023 2024 2025

$ 273 $ 287 $ 301 $ 316 $ 332

35 37 39 41 43
1,041 1,093 1,147 1,205 1,265
126 132 139 146 153
1,475 1,549 1,627 1,708 1,793
1,710 1,796 1,886 1,980 2,079
515 541 568 596 626
1,195 1,255 1,318 1,384 1,453
121 127 133 140 147
$ 2,791 $ 2,931 $ 3,077 $ 3,231 $ 3,393

$ 431 $ 453 $ 476 $ 500 $ 524

79 83 87 91 96
337 354 372 390 410
848 890 935 981 1,030
197 207 217 228 240
160 168 176 185 194
1,205 1,265 1,328 1,395 1,464
1,587 1,666 1,749 1,837 1,929
$ 2,791 $ 2,931 $ 3,077 $ 3,231 $ 3,393

2021 2022 2023 2024 2025

$ 7,814 $ 8,204 $ 8,615 $ 9,045 $ 9,498
4,863 5,107 5,362 5,630 5,912
2,950 3,098 3,253 3,415 3,586
1,795 1,884 1,979 2,078 2,181
1,156 1,213 1,274 1,338 1,405
182 191 200 210 221
974 1,023 1,074 1,127 1,184
16 16 17 18 19
18 19 20 21 22
940 987 1,037 1,089 1,143
357 375 394 414 434
$ 583 $ 612 $ 643 $ 675 $ 709
 2021 2022 2023 2024 2025

$ 583 $ 612 $ 643 $ 675 $ 709

182 191 200 210 221
18 19 20 21 22
(2) (2) (2) (2) (2)
(50) (52) (55) (57) (60)
(6) (6) (7) (7) (7)
21 22 23 24 25
4 4 4 4 5
16 17 18 19 20
(10) (11) (11) (12) (13)
755 793 833 874 918

(239) (250) (263) (276) (290)

(6) (6) (6) (7) (7)
(244) (256) (269) (283) (297)

9 10 10 11 11
(508) (533) (560) (588) (617)
(498) (523) (549) (577) (605)

13 14 14 15 16

13 14 14 15 16
Woof Junction Inc. 1 2 3 4 5 6 7 8 9
Valuation Analysis 2016 2017 2018 2019 2020 2021 2022 2023 2024

Discount rate 15%

Residual Income Valuation Model

Actual earnings $ 225 $ 284 $ 357 $ 448 $ 562 $ 583 $ 612 $ 643 $ 675
Expected earnings (r * SE) 102 116 137 162 192 227 238 250 262
Abnormal earnings $ 123 $ 169 $ 220 $ 286 $ 370 $ 356 $ 374 $ 393 $ 413
PV of AE at end of 2015 107 127 145 163 184 154 141 128 117

Book value of equity at end of 2015 $ 677

PV of AE during forecast period 1,375
Terminal value:
Base AE for terminal growth 433
Terminal growth rate for AE 5.00%
PV of perpet AE at end of 2025 4,549
PV of perpet AE at end of 2015 1,124
Estimated market value $ 3,176
Number of shares at end of 2015 143
Estimated value per share $ 22.21

Dividend Valuation Model

Dividends $ 131 $ 143 $ 190 $ 250 $ 328 $ 508 $ 533 $ 560 $ 588
PV of dividends at end of 2015 114 108 125 143 163 219 200 183 167

PV of divs during forecast period 1,575

Terminal value:
Base dividend for terminal growth 617
Terminal dividend growth rate 5.00%
PV of dividends at end of 2025 6,477
PV of dividends at end of 2015 1,601
PV of dividends in arrears $ 3,176
Number of shares at end of 2015 143
Estimated value per share $ 22.21

Free Cash Flow Valuation

1992 1993 1994 1995 1996 1997 1998 1999 2000
Operating Cash Flow 200 366 453 562 696 755 793 833 874
Investing Cash Flow (239) (144) (216) (255) (302) (357) (244) (256) (269)

Free Cash Flow (39) 222 237 306 394 398 549 576 605
PV of FCF at end of 2015 (34) 168 156 175 196 172 206 188 172

PV of FCF during forecast period 1,557

Terminal value:
Base FCF for terminal growth 635
Terminal dividend growth rate 5.00%
PV of FCF at end of 2025 6,672
PV of FCF at end of 2015 1,649
PV of FCF in arrears 3,206
Initial financial assets $ 193
Estimated value of equity 3,399
Number of shares at end of 2015 143
Estimated value per share $ 23.77
 10
2025

$ 709
276
$ 433
107

$ 617
152
2001
918
(283)

635
157