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20130521ButletCompany_V1

20130521ButletCompany_V1

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Published by Munkhnaran
Harvard Business School case solution
Harvard Business School case solution

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Categories:Types, Business/Law
Published by: Munkhnaran on May 25, 2013
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01/14/2015

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Income Statement Projection

XYZ Company
In Million USDollars
Sponsor XYZ Company
2010
x Revenue $504
Growth rate 3%
Revenue start year 2013
COGS, % of revenue 25%
SG&A, % of revenue 15%
Capex $60
Asset life, in years 10
Loan amount $60
Repayment period, in years 5
Interest rate, pa 20%
Principal repayment start 2013
Tax rate 25%
Discount rate 15%
Income Statement
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Flag 0 0 0 1 1 1 1 1 1 1
Revenue $0 $0 $0 $504 $504 $504 $504 $504 $504 $504
COGS, % of revenue 0 0 0 (126) (126) (126) (126) (126) (126) (126)
Gross revenues $0 $0 $0 $378 $378 $378 $378 $378 $378 $378
SG&A 0.0 0.0 0.0 (75.6) (75.6) (75.6) (75.6) (75.6) (75.6) (75.6)
EBITDA $0 $0 $0 $302 $302 $302 $302 $302 $302 $302
Interest expense 0 0 0 (12) (10) (7) (5) (2) 0 0
Depreciation 0 0 0 (6) (6) (6) (6) (6) (6) (6)
EBIT $0 $0 $0 $284 $287 $289 $292 $294 $296 $296
Tax 0 0 0 (71) (72) (72) (73) (74) (74) (74)
Net income $0 $0 $0 $213 $215 $217 $219 $221 $222 $222
Debt Schedule 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Principal Flag 0 0 0 1 1 1 1 1 0 0
Drawdown schedule 50% 30% 20% 0% 0% 0% 0% 0% 0% 0%
Beginning balance $0 $30 $48 $60 $48 $36 $24 $12 $0 $0
Drawdowns 30 18 12 0 0 0 0 0 0 0
Principal 0 0 0 (12) (12) (12) (12) (12) 0 0
Interest 0 0 0 (12) (10) (7) (5) (2) 0 0
Debt service 0 0 0 (24) (22) (19) (17) (14) 0 0
Ending balance 30 48 60 48 36 24 12 0 0 0
Cash flow ($30) ($18) ($12) $213 $215 $217 $219 $221 $222 $222
NPV $548
IRR 114%
% of Projected
1988 1989 1990 Sales 1,991
Net sales 1,697 $ 2,013 $ 2,694 $ 3,600 $
Cost of goods sold
Beginning inventory 183 239 326 418
Plus Purchases 1,278 1,524 2,042 2,746
1,461 $ 1,763 $ 2,368 $ 3,164 $
Less Ending inventory 239 326 418 15.5% 558
Total cost of goods sold 1,222 $ 1,437 $ 1,950 $ 72.4% 2,606 $
Gross profit 475 $ 576 $ 744 $ 994 $
Less Operating expenses 425 515 658 24.4% 878
Operating income 50 $ 61 $ 86 $ 115 $
Plus: 2% discounts - - -
Less Interest expense 13 20 33 40
Net income before taxes 37 $ 41 $ 53 $ 75 $
Less Provision for income taxes 6 7 9 26
Net income 31 $ 34 $ 44 $ 49 $
Note: I simply took 1990 proportion to 1991, assuming inventory, operating expense, COGS shall have same weight.
Black - punch in #,
Blue - calculation
Income Statement
Note: I simply took 1990 proportion to 1991, assuming inventory, operating expense, COGS shall have same weight.
% of Projected
1988 1989 1990 Sales 1,991
Cash 58 $ 49 $ 41 $ 1.5% 55 $
Accounts receivable 171 222 317 11.8% 424
Inventory 239 325 418 15.5% 559
Total current assets 468 $ 596 $ 776 $ 1,038 $
Property (net) 126 140 157 5.8% 210
Total assets 594 $ 736 $ 933 $ 1,248 $
Notes payable, bank - $ 146 $ 233 $ 407 $
Notes payable, Mr. Stark 105 - - -
Accounts payable, trade 124 192 256 9.5% 342
Accrued expenses 24 30 39 1.4% 52
Current portion of long-term debt 7 7 7 7
Total current liabilities 260 $ 375 $ 535 $ 808 $
Long-term debt 64 57 50 43
Total liabilities 324 $ 432 $ 585 $ 851 $
Net worth 270 304 348 397
Total liabilities and shareholders' equity 594 $ 736 $ 933 $ 1,248 $
Note: Same here, 1990 proportion more or less would remain the same. However this assumption does not affect the overall outcome of analysis, due the underlying dynamics, so to say.
Black - punch in #,
Blue - calculation
Balance Sheet
Note: Same here, 1990 proportion more or less would remain the same. However this assumption does not affect the overall outcome of analysis, due the underlying dynamics, so to say.

950 $ $ 744 658 86 33 53 9 44 15.punch in #.694 % of Sales Projected 1.600 Net sales Cost of goods sold Beginning inventory Plus Purchases Less Ending inventory Total cost of goods sold 183 1.042 $ 2.606 $ 994 878 115 40 75 26 49 Gross profit $ Less Operating expenses Operating income $ Plus: 2% discounts Less Interest expense Net income before taxes $ Less Provision for income taxes Net income $ 24. assuming inventory.Income Statement 1988 $ 1.368 418 $ 1.524 $ 1.278 $ 1.5% 72.4% 418 2. COGS shall have same weigh Black .437 $ $ 576 515 61 20 41 7 34 326 2.222 475 425 50 13 37 6 31 239 1.461 239 $ 1.013 1990 $ 2. operating expense. Blue .991 $ 3.746 $ 3.4% $ $ $ $ $ $ $ Note: I simply took 1990 proportion to 1991.calculation .697 1989 $ 2.763 326 $ 1.164 558 $ 2.

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