CASE F&B

INCOME STATEMENT
20X1 20X2 DATA 20X1 20X2
Sales 2,750,000 3,025,000 Sales 2,750,000 10%
Cost of Goods Sold 2,502,500 2,752,750 Gross Margin 9% 9%
Gross Margin 247,500 272,250 11000 CAPEX 14,000 16,000
Other expenses 228,145 250,745 11,000 Depreciation 7.5% 7.5%
Depreciation 8,355 9,405 EBIT 0.4% 0.4%
EBIT 11,000 12,100 Interest expenses 1.5% 1.5%
Interest expenses 2,160 3131.355 22,500 Go to account receivable first Mortgage loan repayment 1,500 1,500
EBT 8,840 8,969 Tax rate 40% 40%
Income taxes 3,536 3,587 40% given in the case Purchases over CoGS 102% 102%
Net Income 5,304 5,381 Collection period 20 20
2015.52 2015.52 Payment period 30 30
ACCOUNTS RECEIVABLE Dividends over net income 38% 38%
Sales 2,750,000 3,025,000
Average collection period 20 20 days 20 days EBIT 11,000 12,100
Outstanding balance 150,685 165,753 Dont forget to divide it by number of days in a year less Income taxes 4,400 3,587
= EBIAT (NOPAT) 6,600 8,513
plus Depreciation expense 8,355 9,405
ACCOUNTS PAYABLE = Gross Cash Flow 14,955 17,918
Purchases 2,552,550 2,807,805 less CAPEX -14,000 16,000
Average payment period 30 30 days 30 days +/- A/R -63,485 15,068
Outstanding balance 209,799 230,778 Same logic applies like above in A/R. +/- Inventory -50,050 70,123
+/- A/P 58,899 20,980
+/- Taxes payable -7,764 51
ENDING INVENTORY = Free Cash Flow 61,445
Beginning inventory 221,900 271,950 Dont forget to use entry from the previous year in here. less Loan repayments 1,500 1,500
Purchases 2,552,550 2,807,805 less Interests (net of taxes)
- Cost of Goods Sold 2,502,500 2,752,750 = Cash Flow
Ending inventory 271,950 327,005 less Dividends 2,016 2,016
= Final Cash Flow
BALANCE SHEET AS DECEMBER 31st
Free cash flow statement
ASSETS 20X0 20X1 20X2
Cash & banks 54,600 54,600 54,600 minimum balance - -
Accounts Receivable 87,200 150,685 165,753 63,485 15,068
Inventory 221,900 271,950 327,005 50,050 55,055
CURRENT ASSETS 363,700 477,235 547,358 50,050 70,123
- -
Property, plant & equipment 111,400 125,400 141,400 14,000 16,000 CAPEX
Minus Accumulated depreciation - 73,700 82,055 91,460 - 8,355 9,405 Be careful with the sign, when calculating make sure you use correctly in formula.
NON CURRENT ASSETS 37,700 43,345 49,940 5,645 6,595
Other assets 5,100 5,100 5,100 - - It says its not going to change in the case.
- -
TOTAL ASSETS 406,500 525,680 602,398 119,180 76,718
- -
- -
EQUITY & LIABILITIES - -
Accounts payable 150,900 209,799 230,778 58,899 20,980
Bank line of credit 120,000 186,257 240,078 PLUG ACCOUNT 66,257 53,821 Instead of using the cash, we have the minimum balance, how much we have to use credit line to balance the balance (Plug Account)
Taxes payable 11,300 3,536 3,587 We pay the taxes of the prev- 7,764 51 We pay taxes of previous year
TOTAL CURRENT LIABILITIES 282,200 399,592 474,444 117,392 74,852
- -
Mortgage loan 24,000 22,500 21,000 - 1,500 - 1,500
- -
Common stock 75,000 75,000 75,000 - - If nothing is mentioned in the case, we use the same amount.
Retained earnings 25,300 28,588 31,954 RE = REi + Net Income - Div 3,288 3,366 Calculate divident before we finalize this calculation seperately.
- -
TOTAL EQUITY & LIABILITIES 406,500 525,680 602,398 119,180 76,718
 Net weighted cost of capital structure

Year 0 1 2 3 4 5
FVF1 FVF2 FVF3 FVF4 FVF5
We calculate Present value of every single one
Fcf / (1+ WOC)^year

Then we have sum of PV (FCF)

DCF : This is the most commonly used one.

Because 1 euro in year 1 wont have same value in year 3.

So we need to do such calculations.