P. 1
Reeby Sports SARY1

Reeby Sports SARY1

|Views: 24|Likes:
Published by Santanu Das
Reeby Sports SARY1Reeby Sports SARY1Reeby Sports SARY1Reeby Sports SARY1Reeby Sports SARY1Reeby Sports SARY1Reeby Sports SARY1Reeby Sports SARY1Reeby Sports SARY1Reeby Sports SARY1Reeby Sports SARY1
Reeby Sports SARY1Reeby Sports SARY1Reeby Sports SARY1Reeby Sports SARY1Reeby Sports SARY1Reeby Sports SARY1Reeby Sports SARY1Reeby Sports SARY1Reeby Sports SARY1Reeby Sports SARY1Reeby Sports SARY1

More info:

Categories:Types, Comics
Published by: Santanu Das on Nov 17, 2013
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as XLSX, PDF, TXT or read online from Scribd
See more
See less

07/18/2015

pdf

text

original

2002 2003 2002 2003

Cash & Securities 3.12 3.60 Current Liabilities 2.90 3.20
Other current assets 15.08 16.93 Equity 36.05 40.71
Net fixed assets 20.75 23.38
Total 38.95 43.91 Total 38.95 43.91
2004 2005 2006 2007 2008
Cash flow 10.47 11.87 7.74 8.40 9.95
Depreciation 2.40 3.10 3.12 3.17 3.26
Pretax profits 8.08 8.77 4.62 5.23 6.69
Tax 2.83 3.07 1.62 1.83 2.34
Aftertax profits 5.25 5.70 3.00 3.40 4.35
Dividends 2.00 2.00 2.50 2.50 2.50
Retained profits 3.25 3.70 0.50 0.90 1.85
2004 2005 2006 2007 2008
Gross investment in fixed assets 4.26 10.50 3.34 3.65 4.18
Investments in net working capital 1.39 0.60 0.28 0.42 0.93
Total 5.65 11.10 3.62 4.07 5.11
Cost of Capital 10%
Current shares outstanding 0.2 mn 0.09
Shares After equity addition 0.29 mn
ROE 12%
DPR 40%
Growth rate
ROE*(1-
DPR) 7.20%
GIVEN DATA
Expectations for 2011
Assets Liabilities
Forecasted investment expenditures (figures in $ millions)
Forecasted profits and dividends (figures in $ millions)
Balance Sheet
2009 2010
12.67 15.38
3.44 3.68
9.23 11.69
3.23 4.09
6.00 7.60
2.50 3.00
3.50 4.60 18.30
2009 2010
5.37 6.28
1.57 2.00
6.94 8.28
GIVEN DATA
Forecasted investment expenditures (figures in $ millions)
Forecasted profits and dividends (figures in $ millions)
Balance Sheet
Question 1:
2004 2005 2006 2007 2008 2009
EBIT=PBT 8.08 8.77 4.62 5.23 6.69 9.23
Less :Tax (2.83) (3.07) (1.62) (1.83) (2.34) (3.23)
Depreciation 2.40 3.10 3.12 3.17 3.26 3.44
Less :Capex change (4.26) (10.50) (3.34) (3.65) (4.18) (5.37)
Less: Change in WC (1.39) (0.60) (0.28) (0.42) (0.93) (1.57)
FCFF 2.00 (2.30) 2.50 2.50 2.50 2.50
Dividends 2.00 2.00 2.50 2.50 2.50 2.50
Dividend Payout Ratio 0.38 0.35 0.83 0.74 0.57 0.42
NPV of explicit period $8.01 $7.68
Present value of free
cash flows in 2003 for
forecasted cash flows
from 2004 to 2010= $8.01 millions 58.94
$66.95
Question 3:
Book Value calculations
2004 2005 2006 2007 2008 2009
Start Equity book value 40.71 43.96 51.96 52.46 53.36 55.21
Investment 5.65 11.10 3.62 4.07 5.11 6.94
Less:Depreciation (2.40) (3.10) (3.12) (3.17) (3.26) (3.44)
End Equity book value 43.96 51.96 52.46 53.36 55.21 58.71
Calculations for 2011: $8.14
Net Profit $7.60 mn 67.11 8.0532
Dividend $3.04 mn $3.80 67.87
$3.26
Using Constant growth DCF Formula 2005 If company do not Declare Dividend
Growth Rate 7.20% 6% $9.79
PV at horizon in 2010 $108.5 mn $94.97 $58.97
PV at 2003 $63.7 mn 56.74 $ $68.75
Share price expected $318.5 283.71 $ 322.25 342.2661
figures in mn
Free cash flow calcultion (figures in $ millions)
Since company is debt free, interests costs is zero. Hence EBIT+PBT
No of
share to be 13343.6773 876.511
Assuming no growth post 2010:
PV at horizon in 2010 $76.0 mn
PV at 2003 $47.0 mn
Share price expected $235.0
Question 2:
Comparable Analysis conclusions from Molly Sports' ratios:
Ratio Name Ratio Value 2010 Valuation
2003
Valuation Share Price
Market to Book Value 50% $94.97 $56.74 $283.71
Price to Earnings 12 $91.20 $54.81 $274.05 Conservative
Dividend Yield 3% $101.30 $59.99 $299.95
Question 4:
If $4.3 mn is raised with issue of shares in 2005, then book value will change in 2005:
Book Value calculations
2004 2005 2006 2007 2008 2009
Start Equity book value 40.71 43.96 56.26 56.76 57.66 59.51
Investment 5.65 11.1 3.62 4.07 5.11 6.94
Less:Depreciation -2.4 -3.1 -3.12 -3.17 -3.26 -3.44
End Equity book value 43.96 56.26 56.76 57.66 59.51 63.01
Calculations for 2011:
Net Profit 8.1 mn
Dividend 3.2 mn
Using Constant growth DCF Formula
PV at horizon in 2010 $115.90 mn
PV at 2003 $67.48 mn
Share price expected $232.70
Assuming no growth post 2010:
PV at horizon in 2010 $32.45 mn
PV at 2003 $24.66 mn
figures in mn
Molly Sports Ratios George Sports (in mn except share price)
So share price should range from $235 to $319 as per DCF valuation
So share price should range from $274 to $299 as per comparable analysis
Share price expected $85.03
Question
Given the range of
valuations done in Ques
3 above and assuming
that Reeby sports needs
to go for an IPO of 4.3
mn at the end of 2005,
How many shares
should be issued and at
what price considering
all the techniques of
valuations?
The 283.79
include the
expansion plan
so it does not
matter where
the Financing
comes from, So
conceptually
there will be no
change in value
of Share price.
Mathematically
we have to
prove $ 322.25
at 2005 shud be
equal to $283.79
2003 2004 2005
$283.68 10 332.25
2003 2004 2005
$283.64 0 343.2
With Dividend
Without Dividend
So share price should range from $73 to $264 as per DCF valuation. So dilution is seen.
2010 2010
11.69
(4.09)
3.68
(6.28)
(2.00)
3.00 3.22
3.00
0.39
114.9
2010
58.71
8.28
(3.68)
63.31
$0.06
4.0266
If company do not Declare Dividend
($55.69) $55.69
$4.43 $85.23
96.644 51.7439
483.22 258.7195
figures in mn
Free cash flow calcultion (figures in $ millions)
FCFF=FCFE since there is zero debt
Since dividend is $3.04 mn and min FCFE is equal to max amount of dividend that
can be paid
SO FCFE= $3.04 mn
Conservative
2010
63.01
8.28
-3.68
67.61
figures in mn
dividend is $3.04 mn and min FCFE is equal to max amount of dividend that
203.55
Cake $28.50 $28.05
Cedar $21.20 $22.00
Cid $39.00 $38.50
Coat $34.20 $34.50
Cure $33.50 $34.00
Cape $39.00
Fast ($0.45) Daze $28.00 $0.05
Feat $0.80 Dell $20.50 $1.50
Fist ($0.50) Dixie $39.50 ($1.00)
Foam $0.30 Dot $34.50 $0.00
Fume $0.50 Dune $34.00 $0.00
F1 ($39.00)
$ 283.71 is the Valuation at 31st Dec 2003, we Need to find for 31st Dec for 2005 and FInd IPO Price.

If the company decide not to pay any dividends to the existing share holder at the end of 2004 and 2005 . WIll it affect over
company valuation at the end of 2005 and per share valuation for the existing shareholders at the end of 2005.

OR Company declare dividend or not does its valuation changes or not???
283.71 is the Valuation at 31st Dec 2003, we Need to find for 31st Dec for 2005 and FInd IPO Price.
If the company decide not to pay any dividends to the existing share holder at the end of 2004 and 2005 . WIll it affect overall
company valuation at the end of 2005 and per share valuation for the existing shareholders at the end of 2005.
OR Company declare dividend or not does its valuation changes or not???

38 3.94 2010 6.00 8.50 3.23 3.09 7.50 2010 15.57 6.28 .00 2.60 18.69 4.GIVEN DATA 2009 12.00 4.68 11.67 3.37 1.44 9.28 2.30 2009 5.60 3.23 6.

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->