Professional Documents
Culture Documents
Assumptions
Income Statement
Revenue Growth (% Change)
Gross Margin
Operating Expense (% of Revenue)
Operating Margin (% of Revenue) 1%
Common Shares 3.50
Dividend 0.84
Depreciation 1.80
Balance Sheet
Accounts recievable of Sales (% of Revenue) 9.51%
Investments and other assets increase 26.05%
Other current assets 2.03%
Accounts payable of Sales (% of Revenue) 6.75%
Accrued expenses and deferred taxes 8.42%
Other non-current liabilites 7.98%
Bank borrowing 0.40
Long Term Debt 5.95%
Corporate tax rate 35%
CAPEX (% of Revenue)
Interest Expense (% of Long Term Debt)
Income statement
Net sales 137.80
COGS 126.10
Gross profit 11.70
Operating expenses 2.90
Depreciation and amortization 1.80
Operating profit 7.00
Interest expense 0.39
Income taxes 2.31
Net income 4.30
EPS 1.23
Dividend per share 0.24
Shares outstanding 3.50
Total dividend payout 0.84
Balance sheet
Cash 1.80
Accounts receivable 13.10
Other current assets 2.80
Current assets 17.70
Net PP&E 16.00
Investments and other assets 35.90
Total assets 69.60
Check 0.00
Cash flow
Cash Flow from Operations
Net Income 4.30
Add: Depreciation 1.80
Less: Increase/(decrease) in accounts receivable
Less: Increase/(decrease) in Other current assets
Add: Increase/(decrease) in accounts payable
Add: Increase/(decrease) in other accrued expenses
Add: Increase/(decrease) in other non-current liabilites
Total Cash Flow from Operations
Supporting Schedules
PPE
PPE opening
Add: Increase/(Decrease) CapEx
Less: Depreciation 1.80
PPE closing 16.00
0.40 0.40
7.90 7.50
8.30 7.90
0.40 0.40
0.36 0.34
0.76 0.74
0.40 0.40
7.50 7.10
7.90 7.50
Forecasted Results
2017 2018 2019 2020 2021 2022
4.3 4.4
4.5% 4.5% Broadway's revenue to decline at 10% per year from 2015 to 2016, then grow
9.5% 9.5% Broadway's gross margin to grow at 8.5% per year from 2015 to 2016, then 9%
2% 2% Operating expense is expected to remain constant at 2% of annual sale
3% 3%
3.50 3.50
0.84 0.84
4.70 4.90 Depreciation would increase by $200,000 per year in the foreseeable future
9.69% 9.69% Assume constant AVG value from Exhibit 2 2014 financial statement so have t
27.12% 27.12% Assume constant AVG value from Exhibit 2 2014 financial statement so have t
2.64% 2.64%
6.96% 6.96% Assume constant AVG value from Exhibit 2 2014 financial statement so have t
8.54% 8.54% Assume constant AVG value from Exhibit 2 2014 financial statement so have t
7.43% 7.44% Assume constant value from Exhibit 2 2014 financial statement so have take t
0.40 0.40 Amount given in Exhibit 2 2014 Financial Statement
5.47% 5.47% Assume constant AVG value from Exhibit 2 2014 financial statement so have t
35% 35% The standard industry tax rate value given
2.10% 2.10% Capital Expenditure is expected to remain constant at 2.10% of annual sales
4.50% 4.50% Rate given in Exhibit 2 2014 Financial Statement
202.52 211.64
183.28 191.53
19.24 20.11
4.05 4.23
4.70 4.90
10.49 10.97
0.21 0.19
3.60 3.77
6.68 7.01
1.91 2.00
0.24 0.24
3.50 3.50
0.84 0.84
35.78 41.75
19.63 20.52
4.13 4.13
59.54 66.39
24.50 24.04
40.60 40.60
124.64 131.04
14.09 14.73
0.40 0.40
14.49 15.13
4.30 3.90
12.76 12.76
11.40 11.40
42.95 43.19
81.68 87.85
124.64 131.04
0.00 0.00
6.68 7.01
4.70 4.90
0.85 0.88
- -
0.61 0.63
- -
- -
11.14 11.66
4.25 4.44
- -
(4.25) (4.44)
(0.40) (0.40)
- -
0.84 0.84
(1.24) (1.24)
5.65 5.97
30.13 35.78
35.78 41.75
- -
24.95 24.50
4.25 4.44
4.70 4.90
24.50 24.04
19.63 20.52
4.13 4.13
23.76 24.64
14.09 14.73
0.40 0.40
9.27 9.52
0.24 0.25
0.40 0.40
4.70 4.30
5.10 4.70
0.40 0.40
0.21 0.19
0.61 0.59
0.40 0.40
4.30 3.90
4.70 4.30
Explanation
ear from 2015 to 2016, then grow at 9% per year from 2017 to 2019 and 4.5% per year thereafter
er year from 2015 to 2016, then 9% per year from 2017 to 2018 and 9.5% per year thereafter
onstant at 2% of annual sale
2014 financial statement so have take the average of 2010-2014, since no new information given for 2014 onwards
2014 financial statement so have take the average of 2010-2014, since no new information given for 2014 onwards
2014 financial statement so have take the average of 2010-2014, since no new information given for 2014 onwards
2014 financial statement so have take the average of 2010-2014, since no new information given for 2014 onwards
financial statement so have take the average of 2010-2014, since no new information given for 2014 onwards
2014 financial statement so have take the average of 2010-2014, since no new information given for 2014 onwards
Exhibit 3a Five-year Forecast of Broadway's Income and Cash Flow, 2015-2019 (U.S. $
Net sales
Operating profit percentage
Interest Expense
Net income
Depreciation and amortization
Change in net working capital
Capital expenditure
Total FCF
Assumptions
Income Statement
Revenue Growth (% Change)
Gross Margin
Operating Expense (% of Revenue)
Operating Margin (% of Revenue) 1%
Common Shares 3.50
Dividend 0.84
Depreciation 1.80
Balance Sheet
Accounts recievable of Sales (% of Revenue) 9.51%
Investments and other assets increase 26.05%
Other current assets 2.03%
Accounts payable of Sales (% of Revenue) 6.75%
Accrued expenses and deferred taxes 8.42%
Other non-current liabilites 7.98%
Bank borrowing 0.40
Long Term Debt 5.95%
Corporate tax rate 35%
CAPEX (% of Revenue)
Interest Expense (% of Long Term Debt)
Income statement
Net sales 137.80
COGS 126.10
Gross profit 11.70
Operating expenses 2.90
Depreciation and amortization 1.80
Operating profit 7.00
Interest expense 0.39
Income taxes 2.31
Net income 4.30
EPS 1.23
Dividend per share 0.24
Shares outstanding 3.50
Total dividend payout 0.84
Balance sheet
Cash 1.80
Accounts receivable 13.10
Other current assets 2.80
Current assets 17.70
Net PP&E 16.00
Investments and other assets 35.90
Total assets 69.60
Check 0.00
Cash flow
Cash Flow from Operations
Net Income 4.30
Add: Depreciation 1.80
Less: Increase/(decrease) in accounts receivable
Less: Increase/(decrease) in Other current assets
Add: Increase/(decrease) in accounts payable
Add: Increase/(decrease) in other accrued expenses
Add: Increase/(decrease) in other non-current liabilites
Total Cash Flow from Operations
Supporting Schedules
PPE
PPE opening
Add: Increase/(Decrease) CapEx
Less: Depreciation 1.80
PPE closing 16.00
0.40 0.40
7.90 7.50
8.30 7.90
0.40 0.40
0.36 0.34
0.76 0.74
0.40 0.40
7.50 7.10
7.90 7.50
Forecasted Results
2017 2018 2019 2020 2021 2022
3.6 3.7
3.5% 3.5%
9.0% 9.0%
2.4% 2.4%
3% 3%
3.50 3.50
0.84 0.84
4.70 4.90
9.69% 9.69%
27.12% 27.12%
2.64% 2.64%
6.96% 6.96%
8.54% 8.54%
7.43% 7.44%
0.40 0.40
5.47% 5.47%
35% 35%
2.10% 2.10%
4.50% 4.50%
169.09 175.01
153.87 159.26
15.22 15.75
4.06 4.20
4.70 4.90
6.46 6.65
0.21 0.19
2.19 2.26
4.06 4.20
1.16 1.20
0.24 0.24
3.50 3.50
0.84 0.84
23.68 27.69
16.39 16.97
3.86 3.86
43.93 48.52
22.05 20.83
40.60 40.60
106.58 109.95
11.77 12.18
0.40 0.40
12.17 12.58
4.30 3.90
12.76 12.76
11.40 11.40
40.63 40.64
65.96 69.31
106.58 109.95
0.00 0.00
4.06 4.20
4.70 4.90
0.55 0.57
- -
0.40 0.41
- -
- -
8.60 8.94
3.55 3.68
- -
(3.55) (3.68)
(0.40) (0.40)
- -
0.84 0.84
(1.24) (1.24)
3.81 4.02
19.86 23.68
23.68 27.69
- -
23.20 22.05
3.55 3.68
4.70 4.90
22.05 20.83
16.39 16.97
3.86 3.86
20.25 20.83
11.77 12.18
0.40 0.40
8.09 8.25
0.16 0.16
0.40 0.40
4.70 4.30
5.10 4.70
0.40 0.40
0.21 0.19
0.61 0.59
0.40 0.40
4.30 3.90
4.70 4.30