Case 1 - Clarkson Lumber Template.xlsx

Roic nopattotal net operating capital 118 132 114 122

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ROIC = NOPAT/Total net operating capital 11.8% 13.2% 11.4% 12.2% 12.2% 12.2% Calculating Operating Profitability Ratio (OP) NOPAT $ 79 $ 102 $ 121 Sales 2,921 3,477 4,519 OP = NOPAT/Sales 2.7% 2.9% 2.7% Calculating Capital Requirement Ratio (CR) Total net operating capital $ 664 $ 772 $ 1,059 Sales 2,921 3,477 4,519 CR = Total net operating capital/sales 22.7% 22.2% 23.4% ROIC = OP x 1/CR 11.8% 13.2% 11.4% 5. Buy short-term investments or other nonoperating assets Weighted average cost of capital (WACC) a
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Calculating Market Value Added (MVA) Price per share NA NA NA Number of shares NA NA NA Market value of equity = Price x # of shares NA NA NA Book value of equity 504 372 449 MVA = market value - book value Calculating Economic Value Added (EVA) Total net operating capital $ 664 $ 772 $ 1,059 Weighted average cost of capital (WACC) 12.2% 12.2% 12.2% Dollar cost of capital $ 81.01 $ 94.18 $ 129.20 NOPAT $ 79 $ 102 $ 121 Dollar cost of capital $ 81.01 $ 94.18 $ 129.20 EVA = NOPAT - Dollar cost of capital $ (2.36) $ 7.82 $ (8.64) a Estimated to be between 10.6 and 12.2%
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casted Improve 1Improve 2 1996 1996 dividends and repurchases should be the exact same thing
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1993 1994 1995 Q1 1996 Net sales Cost of Goods Sold: Beginning inventory Purchases Ending inventory Total Cost of Goods Sold Gross profit Earnings before interest and taxes Interest expense Net income before income taxes Net income Common Size Balance Sheets at December 31, 1993-1995, and March 31, 1996 1993 1994 1995 Q1 1996 Cash Accounts receivable, net Inventory Current assets Property, net Total Assets Notes payable, trade Accounts payable Accrued expenses Current liabilities Total Liabilities Net worth Common Size Income Statements for Years Ending December 31, 1993-1995, and for First Quarter 1996 Operating expenses b Provision for income taxes c Notes payable, bank a Note payable to Holtz, current portion b Term loan, current portion c Term loan c Note payable, Mr. Holtz b
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Total Liabilities and Net Worth
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Income Statement Percentage Change Analysis Net sales Cost of Goods Sold: Beginning inventory Purchases Ending inventory Total Cost of Goods Sold Gross profit Operating expenses Earnings before interest and taxes Interest expense Net income before income taxes Provision for income taxes Net income Balance Sheet Percentage Change Analysis Cash Accounts receivable, net Inventory Current assets Property, net Total Assets Notes payable, bank Note payable to Holtz, (see below) Notes payable, trade Accounts payable Accrued expenses Term loan, current portion Current liabilities Term loan (total) Note payable, Mr. Holtz (total) Total Liabilities Net worth 1994 a 1995 b a Base year is 1993 b Base year is 1994 1994 a 1995 b
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Total Liabilities and Net Worth a Base year is 1993 b Base year is 1994
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Ratio Analysis Liquidity 1993 1994 1995 Q1 1996 Avg 93-95 Current Ratio Quick Ratio days Asset Management Total assets turnover Fixed assets turnover Days sales outstanding (DSO) days Inventory turnover Average inventory turnover Debt Management Debt-to-assets ratio % Debt-to-equity ratio % Times-interest-earned (TIE) Profitability Profit margin on sales % Basic earning power (BEP) % Return on total assets (ROA) % Return on common equity (ROE) % Market Value Price/earnings (P/E) NA - not a publicly traded company Market/book (M/B) NA - not a publicly traded company DuPont Equation ROE Profit Margin Days payables a a
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  • Spring '09
  • Balance Sheet, Generally Accepted Accounting Principles, Mr. Holtz, Mr. Clarkson

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