Pinkerton.xlsx - PINKERTON CASE Ques Pl.find below the...

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PINKERTON CASE Ques + Reduced Overhead + New Pricing Strategy + NWC improvements 6. Prepare pre and post - acquisition Balance sheets for CPP Operating profit pinkerton negative Cpp 3.02% Particulars Scenario1 1988 1989 1990 No difference Sales revenue projection 90% 80% 70% of 1987 OpEx 6.00% 5.90% 5.80% Net PPE 4% of sales revenue Difference Gross profit margin 8.5 9 9.5 Improvement in CPP's Ebit -231892% -68% 70% of 1988 Net wc 8.60% 7.40% 6.20% Financing option 1 Debt of 75 mm at 11.5% Loan repayment 0 upto 7th year payement starts from 7th year all assets are collaterised Option 2 interest 13.5 maturity 7 years Pl.find below the discussion questions on the case on "PINKERTON (A)" 1. What would be the appropriate discount rate you shall use in valuing Pinkerton? 2. How many scenarios are presented in the case by the task force? What changes betwee 3. What is the value of Pinkerton under the first scenario? 4. What is the value of Pinkerton under the second or conservative] scenario?

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