Lemonade stand · every year on the table

Customers → operations → capital → cash → value

Ackman's lemonade stand, year by year. Watch the money move down the table: cups become revenue, the variable and fixed costs come out, the owner takes the cash that's left, and each year's cash is discounted back to today. The value is the sum of that.

Business value

$—

per share

$—

PV of cash stream

$—

own at the end

$—

return on capital (yr N)

—

Model

Setup & capital

Sharesowner 1,000 + investor 500#

Debtborrowed$

Interest rateon the debt%

Working cashleft after the first stand + stock$

Customers (the demand)

Stands, year 1#

Stands added / yrsteady reinvestment#

Final-year expansionextra stands added in yr N#

Cups per standcups

Cups growth%/yr

Price per cup$

Price growth%/yr

Operations (the costs)

COGS per cupvariable$

Labor per standfixed$

Stand cost$

Depreciation lifeyr

Tax rate%

Cash machine (yours)

Hurdle rate%

Years heldyr

How the money moves

Year by year — every actual number

Revenue → COGS (variable) → labor (fixed) → D&A (non-cash) → EBIT → interest → tax → net income → +D&A = CFO → − capex = owner cash (FCF) → discount each year back to today.