finance hw
DESCRIPTION
kjkkkjTRANSCRIPT
Project number: 4
Date:
Class: FINC 3132
Dr. Axel Grossmann
Group:
Name 1:Name 2:Name 3:Name 4:
A) Sales Growth
Here are the company's historical sales. Hint: Use the Trend function to forecast sales for 2015.(in thousands of dollars)
Year Sales Growth Rate
2009 1 102,0112010 2 133,9012011 3 200,2522012 4 288,0652013 5 380,6922014 6 445,1502015 7
B) Pro-Format Statements for 2015
Key Input Data: Used in the forecast
Tax rate 30%Dividend growth rate 15%Interest on Short-term Securities 1%
3%Interest rate on long-term debt 5%
December 31 Income Statements:(in thousands of dollars)
2014 Forecasting
basis RatiosSales $445,150 GrowthExpenses (excluding depr. & amort.) $378,378 % of sales 85.0000% EBITDA $66,773Depreciation and Amortization $7,388 % of fixed assets 11.00% EBIT $59,385Net Interest Expense $8,575 Interest rate x beginning of year debt EBT $50,810Taxes (30%) $15,243 Net Income $35,567Common dividends $12,554 Growth
$23,013
Cumberland Industries December 31 Balance Sheets(in thousands of dollars)
Forecasting
2014 basis RatiosAssets:Cash and cash equivalents $71,450 % of sales 16.051%Short-term investments $11,400 PreviousAccounts Receivable $103,365 % of sales 23.220%Inventories $38,444 % of sales 8.636% Total current assets $224,659 Fixed assets $67,165 % of sales 15.088%Total assets $291,824
Liabilities and equityAccounts payable $25,761 % of sales 5.787%Accruals $25,477 % of sales 5.723%Notes payable $16,717 Previous Total current liabilities $67,955Long-term debt $71,264 Previous Total liabilities $139,219Common stock $100,000 PreviousRetained Earnings $52,605
Interest rate on Short-term debt rd
Addition to retained earnings (DRE)
Previous + DRE
Total common equity $152,605Total liabilities and equity $291,824
Quick Ratio 2.74Debt Ratio 24%
Required assets =Specified sources of financing (Liabilities and Equity)=Additional funds needed (AFN) =
C) FCF for 2013
EBIT x ( 1 - T )= =
Operating CA - Operating CL= =
Operating CA - Operating CL= =
=
= =
NOPAT - -= =
D) WACC
Input Data:Current Bond Value $1,048Par Value $1,000Years to Maturity 20Coupon Rate 6%Flotation Costs 3%
NOPAT15=
NOWC15 =
NOWC14 =
DNOWC NOWC15 = NOWC14 =
DFA Fixed Assets15 Fixed Assets14
FCF15 = DNOWC
Cost of Debt:YTM
PV (1,048.00)FV 1,000
PMT 30N 40
I (semiannual) 2.80%YTM
Adjusted for Flotation Cost:
PV -970.00FV 1000.00
PMT 0.00N 40.00I 0.08%
Cost of Debt (rd)
Cost of Retained Earnings:Input Data:Risk-free 2%Market Return 12%Beta 1.1rs
Input Data:Wd 40%Ws 60%Tax rate 30%
WACC
E) Intrinsic Value per Share
Input Data:Growth rate g 7%# of Shares Outstanding (in thousands) 5,000
Free Cash Flow 2015Free Cash Flow 2016WACC WACC
Operating Value in 2015Operating Value in 2014Total market ValueIntrinsic Value per Share
FCF1
FCF2
V1
V0
TMV0
P0
Overvalued/Undervalued
F) Market Value Added (MVA)
Input Data:Current market value $60.00
Book Value of EquityBased on current stock price MVABased on Intrinisc Value MVA
B) Pro-Format Statements for 2015
2015
Forecast
Include interest earned!!
2015 2015 adj.
Without AFN AFN With AFN
C) FCF for 2013
D) WACC
DFA
E) Intrinsic Value per Share
F) Market Value Added (MVA)