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A

C
E
F

Du Pont Analysis
NPM
TAT
Equity Multiplier
Du Pont ROE
AFN2013 from Equation
Self-Supporting Growth Rate
AFN2013 from Actual Forecast
FCF2013

HMS
Industry
1.20%
2.74%
1.67
2.00
2.40
2.13
4.80% 11.67%
147.75
1.38%
142.35
(96.00)

ROIC2013

5.45%

ROE2013

6.31%

Assumptions:
Sales Growth Rate
Projected Sales
Interest Rate

15%
2,300.00
10%

Showing the Normal Scenario

Hatfield Medical Supplies


2012 Income Statement

Choose a Scenario
2,000.00
1,900.00
100.00
60.00
40.00
16.00
24.00

2013
2,300.00
2,185.00
115.00
60.00
55.00
22.00
33.00

Regular Dividends
Addition To Retained Earnings
Shares Outstanding
Earnings per Share
Dividends per Share

9.00
15.00
10.00
2.40
0.90

10.35
22.65
10.00
3.30
1.04

Notes:
Tax Rate
Dividend Payout Ratio
Year-End Stock Price

40%
37.5%
24.00

Sales
Total Operating Costs
Earnings Before Interest And Taxes
Interest
Earnings Before Taxes
Taxes (40%)
Net Income

Assumptions:
DSO
Inventory Turnover

40%
40%

52.93
5.13

Showing the Normal Scenario

Assets
Cash & Securities
Accounts Receivable
Inventory
Total Current Assets
Net Fixed Assets
Total Assets

Hatfield Medical Supplies


2013 Pro Forma Balance Sheet
Liabilities and Equity
$
23.00
Accounts Payable and Accruals
$ 333.50
Notes Payable
$ 448.50
Total Current Liabilities
805.00
Long-Term Debt
$ 575.00
Common Stock
1,380.00
Retained Earnings
Total Liabilities And Equity
AFN

New Financing:
Notes Payable
Long-term Debt

50.00%
50.00%

Showing the Normal Scenario

$ 115.00
80.00
195.00
520.00
300.00
222.65

Add

Final Value
$
115.00
71.18
151.18
$
266.18
71.18
591.18
300.00
0
222.65

1,237.65

1,380.00

142.35

Note: The "Final Value" column is only


the first step. It ignores the feedback
effects on/from the income statement

Remember that the additional debt


would increase interest expense, whic
then reduces retained earnings. This w
cause the balance sheet to not balanc
and we would go through a few more
rounds of calculating AFN, adding mo
debt, and so on.

Hatfield Medical Supplies


2012 Income Statement
Sales
Cost Of Goods Sold (COGS)
Earnings Before Interest And Taxes
Interest
Earnings Before Taxes
Taxes (40%)
Net Income

2,000.00
1,900.00
100.00
60.00
40.00
16.00
24.00

Dividends (40%)
Addition To Retained Earnings
Shares Outstanding
Earnings per Share
Dividends per Share

9.00
15.00
10.00
2.40
0.90

Notes:
Tax Rate
Dividend Payout Ratio

40%
37.5%

Assets
Cash & Securities
Accounts Receivable
Inventory
Total Current Assets
Net Fixed Assets
Total Assets

Hatfield Medical Supplies


2012 Balance Sheet
Liabilities and Equity
$
20.00
Accounts Payable and Accruals
290.00
Notes Payable
390.00
Total Current Liabilities
700.00
Long-Term Debt
500.00
Total Liabilities
1,200.00
Common Stock
Retained Earnings
Total Common Equity
Total Liabilities And Equity

$ 100.00
80.00
180.00
520.00
700.00
300.00
200.00
500.00
1,200.00

Ratios
Sales, 2012
Sales Growth Rate
Profit Margin
Assets/Sales
Payout Ratio
Equity Multiplier
Total Liab/Total Assets
Times Interest Earned
Increase in Sales
(Payables + Accruals)/Sales
Operating Costs/Sales
Cash/Sales
Receivables/Sales
Inventories/Sales
Fixed Assets/Sales
Tax Rate
Interest Rate on All Debt
P/E Ratio
Return On Equity

HMS
Industry
2,000.00
###
15.00%
15.00%
1.20%
2.74%
60.00%
50.00%
37.50%
35.00%
2.40
2.13
58.33%
53.00%
1.67
5.20
300.00
###
5.00%
4.00%
95.00%
93.00%
1.00%
1.00%
14.50%
11.00%
19.50%
15.00%
25.00%
23.00%
40.00%
40.00%
10.00%
9.50%
10.00
12.00
4.80%
11.64%

Days Sales Outstanding (365 Days)


Inventory Turnover
Fixed Assets Turnover
Debt/Assets
Current Ratio
Return On Invested Capital
(NOPAT/Operating Capital)

52.93 days 32.00 days


5.13
11.00
4.00
5.00
58.33%
36.00%
3.89
3.00

Free Cash Flow (2013 only)

5.36%

14.00%

HMS 2013
2,300.00
1.43%
60.00%
31.36%
2.64
62.13%
1.92

40.00%

6.31%

71.18 days
5.13
4.00
62.13%
3.02
5.45%
(96.00)

Showing the Normal Scenario