BD_SM_c19 - Chapter 19 Valuation and Financial Modeling: A...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 19 Valuation and Financial Modeling: A Case Study 19-1. Ideko’s 2005 sales are $75 million. Find the highest and lowest EBITDA values across all three firms and the industry as a whole: EBITDA/Sales (%) EBITDA ($ mil) Oakley 17.0 12.75 Luxcottica 18.5 13.875 Nike 15.9 11.925 Industry 12.1 9.075 This implies an EBITDA range of $9.075 to $13.875 million. 19-2. First compute the projected annual market share: 2005 2006 2007 2008 2009 2010 Sales Data Growth/Yr 1 Market Size (000 units) 5.0% 10,000 10,500 11,025 11,576 12,155 12,763 2 Market Share 0.5% 10.0% 10.5% 11.0% 11.5% 12.0% 12.5% 3 Ave. Sales Price ($/unit) 2.0% 75.00 76.50 78.03 79.59 81.18 82.81 Using these projections, calculate the projected annual production volume: Production Volume (000 units) 1 Market Size 11,576 12,155 12,763 2 Market Share 10.5% 11.5% 12.0% 12.5% 3 Production Volume (1x2) 1,000 1,103 1,213 1,331 1,459 1,595 Based on these estimates, it will take to 2010 before current capacity will be exceeded and an expansion becomes necessary. 19-3. Debt & Interest Table ($000s) 1 Outstanding Debt 100,000 115,000 2 Interest on Term Loan 6.80% (6,800) 3 Interest Tax Shield 2,380
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
150 Berk/DeMarzo Corporate Finance 19-4. Year 2005 2006 2007 2008 2009 2010 INCOME STATEMENT ($000s) 1 Sales 75,000 84,341 94,631 105,956 118,413 132,105 2 Cost of Goods Sold 3 Raw Materials (16,000) (17,816) (19,794) (21,946) (24,285) (26,828) 4 Direct Labor Costs (18,000) (20,639) (23,611) (26,955) (30,715) (34,938) 5 Gross Profit 41,000 45,886 51,226 57,056 63,413 70,339 6 Sales & Marketing (11,250) (13,916) (17,034) (20,662) (23,683) (26,421) 7 Administration (13,500) (12,651) (14,195) (14,834) (15,394) (17,174) 8 EBITDA 16,250 19,319 19,998 21,560 24,337 26,745 9 Depreciation (5,500) (5,450) (5,405) (5,365) (5,328) (6,795) 10 EBIT 10,750 13,869 14,593 16,196 19,009 19,949 11 Interest Expense (net) (75) (6,800) 12 Pretax Income 10,675 7,069 7,793 9,396 12,209 13,149 13 Income Tax (3,736) (2,474) (2,728) (3,289) (4,273) (4,602) 14 Net Income 6,939 4,595 5,065 6,107 7,936 8,547 19-5. Year Working Capital ($000s) Assets 1 Accounts Receivable 18,493 13,864 15,556 17,418 19,465 21,716 2 Raw Materials 1,973 1,464 1,627 1,804 1,996 2,205 3 Finished Goods 4,192 4,741 5,351 6,029 6,781 7,615 4 Minimum Cash Balance 6,164 6,932 7,778 8,709 9,733 10,858 5 Total Current Assets 30,822 27,002 30,312 33,959 37,975 42,394 Liabilities 6 Wages Payable 1,295 1,368 1,554 1,717 1,895 2,142 7 Other Accounts Payable 3,360 3,912 4,540 5,253 5,914 6,565 8 Total Current Liabilities 4,654 5,280 6,094 6,970 7,809 8,706 Net Working Capital 26,168 21,722 24,218 26,989 30,166 33,687 9 Increase in Net Working Capital (4,446) 2,496 2,771 3,177 3,521 19-6.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 10/08/2010 for the course ENGIN 120 taught by Professor Ilan during the Spring '08 term at University of California, Berkeley.

Page1 / 8

BD_SM_c19 - Chapter 19 Valuation and Financial Modeling: A...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online