How Northern Crown Capital Valuates a Business

2009 Financial Projections
Earnings Before Tax $5,865,000
Tax Rate 42%
Taxes $2,463,300
Net Earnings $3,401,700

Amount Seeking to Raise Today $3,500,000

Discounted Value of Future Opportunity, 5 Years Out
2008 P/E Ratio 15
Value of Company in 2008 $51,025,500

Discount Rate Applied 30%
Year 2009 $51,025,500
Year 2008 $35,717,850
Year 2007 $25,002,495
Year 2006 $17,501,747
Year 2005 $12,251,223

Value of Company at Investment in 2005 $12,251,223
Less: Investment Amount $3,500,000
Present Value $8,751,223

Discount for Risk & Private Company 40%
Less: Discount for Risk & Private Company $3,500,489

Private Company Value $5,250,734


Present Value (What the Owner Keeps) $5,250,734 60.00%
Financing (What the Investor Gets) $3,500,000 40.00%

Total $8,750,734 100.00%

For more information, visit www.EvanCarmichael.com.