eva_tree_model - Sales 1000 Contribution 600 EBIT 200...

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Sales 1000 Contribution 600 EBIT 200 400 Operating Profit Overhead 120 400 Profit Margin 12.0% 0.6 RONA Sales 15.0% 1000 Fixed Assets Operating Profit Assets 600 120 1.25 1000 EVA Net Assets Net Assets 42.24 800 800 Current Assets Cost of Capital 400 77.76 200 WACC 9.7% Source: www.my-controlling.de Variable Cost of Goods Sold (1-Rate of Income Tax) Total Net Asset Turnover Interest Free Liabilities - - + x - : : x x x -
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0 100 200 300 400 500 600 700 800 900 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 9.7% 1 2 2 EVA-Chart Row 5 Row 4 Column C Column C Net Assets WACC/RONA
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12% Market Risk Premium 5% Risk-Free Rate 6% 7% Cost of equity Beta Coefficient 13% 1.1 Risk-Free Rate 8% 7% 60% WACC 9.7% 8% After-Tax Cost of Debt 4.8% 100% 1.9% 60% Income Taxe Rate 40% 40% Rate of Return of a Market Index Company Risk Premium Weighted Cost of Equity Percentage of Total Capital Supplied by Equity Before-Tax Cost of Debt Before-Tax Operating Profit in % Weighted Cost of Debt After-Tax Operating Profit in % % of Total Capital Supplied by Debt - + x x x + x x
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This note was uploaded on 06/28/2010 for the course MKTG 00HP01 taught by Professor Himanshu during the Spring '10 term at Indiana Institute of Technology.

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eva_tree_model - Sales 1000 Contribution 600 EBIT 200...

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