Molson Coors
Five-Minute Diagnostic
1
2012
Source Data for Revenue & Ratio Calculations:
Net Sales revenue
Cost of Sales
Gross Margin
Officer Salary
Non-Officer Wages
Total Wages
Research & Development
Total General & Administrative Expense
Total Operatin
Molson Coors
Five-Minute Diagnostic
VII - Liquidity Ratios and Analysis with comparison to industry or competitor ratios (up to 2 pages)
Jeff Winner
Sections 7-9 - All ratios (5 years of ratios) - Could be table format with competitor(s) in there
as well
Introduction to Company
Molson and Miller Coors combined as one company in 2016. Molson Coors acquired the
remaining shares of Miller Coors to become the worlds third largest brewer. Molson Coors can
be traced all the way back to the 1700s in a small vill
Molson Coors
DuPont Formula
1
2012
Net Sales Revenue
Divided by: Total Assets
Asset Turnover Ratio a
Net Income
Divided by: Net Sales
Return on Sales Ratio b
DuPont Return on Assets (a x b)
Total Assets
Divided by: Total Equity
Financial Leverage Ratio c
Scenario 1 - Management Scenario
As a financial manager of a company their responsibilities are to manage the financial health of
the company and set goals for the company to ensure the growth of the company benefits first
and foremost the stockholders, s
Molsen- Coors
I - Introduction to Company (up to 2 pages)-Jeff
A. General History and overview of growth
B. Markets served and customers targeted
History
VII - Liquidity Ratios and Analysis with comparison to industry or competitor ratios (up
to 2 pages)
EXERCISE Valuing Common Stock SOLUTION
The required rate of return on a firms common stock is 14%. The stocks dividend is expected to
grow at a constant rate of 8% per year and currently sells for $50 per share.
a. Calculate the stocks dividend yield 6.00
BOND Exercise 1
Solution
Bond L
15 yrs
5%, 8%, 12%
100
1,000
N
I
PMT
FV
Bond S
1 yr
5%, 8%, 12%
100
1,000
PV =
1,518.98
1,171.19
863.78
i=
a) 5%
b) 8%
c ) 12%
PV =
1,047.62
1,018.52
982.14
Now, try to answer the following four questions
1. Why is it that
BOND Exercise 2
N=
i=
Pmt=
FV=
PV(price)=
SOLUTION
(A)
(B)
(C)
at issue
2 years later
mkt rate up
10 periods
9.95
100
1000
8 periods
7
100
1,000
8 periods
11
100
1,000
1,003.08
1,179.14
948.69
D. Regardless of the coupon and market rates, the price of a b
Weighted Average Cost of Capital (WACC) Problem
Acme Company's common stock currently sells for $50 in the market, and last years dividend was$2.10. Flot
new common stock. Security analysts are projecting the common dividend will grow at a sustainable rat
Ratio Analysis Exercise - SOLUTION
Last year ROE was only 8% and shareholders were unhappy. But management has implemented
some improvements:
The firm has acquired new debt resulting in a Debt Ratio of 60%
Operational improvements will result in an Asse
Formulas
Current Ratio
Current Assets / Current Liabilities
(Cash + A/Receivable + Inventory) / (Acct Payable + Accrued Expenses)
Free Cash Flow
Cash flow from operating activities Capital expenditures - Dividends
After Tax Profit Margin
Net Income After
Question 1
The Sarbanes-Oxley Act was passed in an effort to
Select one:
A. protect small business from large corporations dominating the market.
B. ensure that partnerships divide profits among partners in a fair manner.
C. guarantee outside auditors can
Question 1
The term structure of interest rates or the yield curve
Select one:
A. is normal when short-term rates are higher than long-term rates.
B. is inverted when short-term rates are lower than long-term rates.
C. shows the yield to maturity for secu
Question 1
Firm X has declared a stock dividend that pays one share of stock for every 5 shares owned. After the
stock dividend, earnings per share will
Select one:
A. remain the same.
B. decline 20%.
C. decline 5%.
D. not enough information.
Question 2
W
Question 1
Assume a corporation has earnings before depreciation and taxes of $82,000, depreciation of $45,000,
and that it has a 30 percent tax bracket. What are the after-tax cash flows for the company?
Select one:
A. $70,900
1) 82,000 45,000 = 37,000
B
Question 1
The growth rate for the firm's common stock is 7%. The firm's preferred stock is paying an annual
dividend of $3. What is the preferred stock price if the required rate of return is 8%?
Select one:
A. $3.00
B. $37.50
3 / 0.8 = 37.50
C. $50.00
D
Question 1
The yield to maturity is always equal to the interest payment of a bond.
Select one:
True
False
Question 2
The longer the maturity of a bond, the greater the impact on price to changes in market interest rates.
Select one:
True
False
Question 3
Question 1
Frisch Fish Corp expects net income next year to be $750,000. Inventory and accounts receivable will
have to be increased by $650,000 to accommodate this sales level. Frisch will pay dividends of $300,000.
How much external financing will Frisc